Circular 19/2023/TT-BCT electricity generation price bracket applicable to solar power plants, wind power plants

CIRCULAR

On providing method to build electricity generation price brackets applicable to solar power plants and wind power plants

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Pursuant to the Government’s Decree No. 96/2022/ND-CP dated November 29, 2022, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Government’s Decree No. 137/2013/ND-CP dated October 21, 2013, on detailing a number of articles of the Electricity Law and the Law Amending and Supplementing a Number of Articles of the Electricity Law;

At the proposal of the Director of the Electricity Regulatory Authority of Vietnam;

The Minister of Industry and Trade promulgates the Circular providing methods to build electricity generation price brackets applicable to solar power plants and wind power plants.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Circular provides regulations on:

a) Method to build annual electricity generation price brackets for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, nearshore wind power plants, offshore wind power plants;

b) Procedure for building and promulgating the annual electricity generation price brackets.

2. This Circular does not apply to solar power plants, wind power plants specified at Point b Clause 2 Article 1 of the Minister of Industry and Trade’s Circular No. 15/2022/TT-BCT dated October 3, 2022, promulgating the method of building the electricity generation price bracket applicable to transitional solar power plants, wind power plants, and solar power plants, wind power plants that have power purchase agreements signed with Vietnam Electricity with valid electricity prices.

3. This Circular applies to the following subjects:

a) Vietnam Electricity (EVN);

b) Organizations and individuals participating in investing in solar power plants, wind power plants;

c) Other related organizations and individuals.

Article 2. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. A standard solar power plant means a solar power plant of which the investor is selected on the basis of implementing the National Power Development Plan, with a popular capacity scale, and an unsigned power purchase contract. Such power plant represents the type of ground-mounted solar power plant and floating solar power plant and is used to calculate the electricity generation price bracket for that type of power plant.

2. A floating solar power plant means a grid-connected solar power plant with photovoltaic panels mounted on a floating structure.

3. A ground-mounted solar power plant means a grid-connected solar power plant other than those specified in Clause 2 of this Article.

4. A standard wind power plant means a wind power plant of which the investor is selected on the basis of implementing the National Electricity Development Plan, with a popular capacity scale, and an unsigned power purchase contract. Such power plant represents the type of onshore wind power plant, nearshore wind power plant, offshore wind power plant and is used to calculate the electricity generation price bracket for that type of power plant.

5. An onshore wind power plant means a grid-connected wind power plant with the center of the wind turbine foundation built and operating within the shoreline of the lowest average sea level in many years on the mainland under current regulations.

6. A nearshore wind power plant means a grid-connected wind power plant with the center of the wind turbine foundation built and operating within the boundary between the shoreline of the lowest average sea level in many years on the mainland under current regulations, and the line 06 nautical miles away from the shoreline of the lowest average sea level in many years on the mainland.

7.  An offshore wind power plant means a grid-connected wind power plant with the wind turbines built outside the 6-nautical mile sea region of the mainland.

8. Total investment means the entire construction investment cost of a project that is determined according to current legal regulations and suitable with the basic design and other contents of the construction investment feasibility study report.

Chapter II

METHOD TO DETERMINE THE ELECTRICITY GENERATION PRICE BRACKET

Article 3. Principles for building the electricity generation price bracket

1. Electricity generation price bracket of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, nearshore wind power plants, offshore wind power plants is a value range from the minimum value (0 VND/kWh) to the maximum value, established and issued annually.

2. The maximum value applicable to solar power plants is the electricity generation price of a standard solar power plant that is determined according to the method specified in Articles 4, 5 and 6 of this Circular.

3. The maximum value applicable to wind power plants is the electricity generation price of a standard wind power plant that is determined according to the method specified in Articles 7, 8 and 9 of this Circular.

4. The electricity generation price bracket for ground-mounted solar power plants and floating solar power plants should be based on the average annual radiation intensity of the three regions: North, Central and South.

5. A standard solar power plant is selected to build an electricity generation price bracket according to the regions specified in Clause 4 of this Article.

Article 4. Method to determine electricity generation prices of standard solar power plants

Electricity generation prices  (VND/kWh) of standard solar power plants shall be determined according to the following formula:

= FC^MT + FOMC^MT

In which:

Article 5. Method to determine the average fixed prices of standard solar power plants

1. Average fixed prices FC^MT (VND/kWh) of standard solar power plants are the components to recover investment costs, determined according to the following formula:

In which:

2. Cost of capital investment of the standard solar power plant is converted annually TC^MT (VND) according to the following formula:

In which:

3. Construction unit cost is the investment cost for 01 kWp of installed capacity of the standard solar power plant (excluding investment costs for lines and transformer stations to the connection point, energy storage system), determined on the basis of total effective investment, updated foreign exchange rates at the time of calculating the electricity generation price brackets, referred to data from consulting organizations (if necessary).

4. The financial discount rate i (%) applying the nominal pre-tax weighted average cost of capital of the standard solar power plant shall be determined according to the following formula:

In which:

a) Loan interest rate r_d (%) is calculated by the weighted average interest rate of domestic and foreign currency loans according to the following formula:

r_d = D_F x r_d,F + D_D x r_d,D

In which:

b) Pre-tax profit margin on owner's capital contribution r_e (%) is determined according to the following formula:

In which:

5. The average annual delivered electric power  (kWh) of standard solar power plants is determined according to the following formula:

= A x r x H x PR

In which:

6. The parameters A, r, H, PR specified in Clause 5 of this Article are determined on one of the following bases:

a) Feasibility study report or approved technical design of standard solar power plants;

b) Data of consulting organizations.

Article 6.  Method to determine the fixed operation and maintenance prices of standard solar power plants

1. Fixed operation and maintenance prices FOMC^MT (VND/kWh) of standard solar power plants are the components to recover major repair costs, labor and other annual costs, determined according to the following formula:

In which:

2. The total fixed operation and maintenance cost (VND) of the standard solar power plant is determined according to the following formula:

= SĐT^MT x P^MT x k_MT

In which:

Article 7. Method to determine electricity generation prices of standard wind power plants

Electricity generation prices  (VND/kWh) of standard wind power plants shall be determined according to the following formula:

= FC^G + FOMC^G

In which:

Article 8. Method to determine the average fixed prices of standard wind power plants

1. Average fixed prices FC^G (VND/kWh) of standard solar power plants are the components to recover investment costs, determined according to the following formula:

In which:

2. Cost of capital investments of standard wind power plants is converted annually TC^G (VND) according to the following formula:

In which:

3. Construction unit cost is the investment cost for 01 kWp of installed capacity of the standard wind power plant (excluding investment costs for lines and transformer stations to the connection point, energy storage system), determined on the basis of total effective investment, updated foreign exchange rates at the time of calculating the electricity generation price bracket, referred to data from consulting organizations (if necessary).

4. The financial discount rate i (%) applying the nominal pre-tax weighted average cost of capital for the standard wind power plant shall be determined by the following formula:

In which:

a) Loan interest rate r_d (%) is calculated by the weighted average interest rate of domestic and foreign currency loans according to the following formula:

r_d = D_F x r_d,F + D_D x r_d,D

In which:

b) Pre-tax profit margin on owner's capital contribution r_e (%) shall be determined according to the following formula:

In which:

5. The average annual delivered electric power ( kWh) of the standard wind power plant shall be determined according to the following formula:

= E^G,P50 - E^G,P50 x k_bd x k_pb,P75

In which:

6. The delivered average electric power over many years of the standard wind power plant is 50%, determined as follows (kWh):

E^G,P50 = 8760 x P^G x k_CF

In which:

7. The parameters k_CF and k_bd specified in Clause 5 and Clause 6 of this Article are determined on one of the following bases:

a) Feasibility study report or approved technical design of standard solar power plants;

b) Data of consulting organizations.

Article 9. Method to determine the fixed operating and maintenance prices of standard wind power plants

1. Fixed operation and maintenance prices FOMC^G (VND/kWh) of standard wind power plants are the components to recover major repair costs, labor and other annual costs, determined according to the following formula:

In which:

2. Total fixed operation and maintenance costs (VND) of standard wind power plants shall be determined according to the following formula:

= SĐT^G x P^G x k_G

In which:

Chapter III

PROCEDURES FOR BUILDING AND PROMULGATING ELECTRICITY GENERATION PRICE BRACKET

Article 10. Procedures for building and promulgating electricity generation price bracket

1. Before November 1 of each year, EVN shall:

a) Propose the selection of standard solar power plants and standard wind power plants to calculate the electricity generation price bracket.

b) Calculate or hire consultants to select sets of parameters and calculate electricity generation prices of standard solar power plants and standard wind power plants according to Chapter II of this Circular.

c) Prepare a dossier for calculating the electricity generation price bracket of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, nearshore wind power plants and offshore wind power plants for the next year as prescribed in Article 11 of this Circular, and submit it to the Electricity Regulation Authority of Vietnam for appraisal.

2. Within 05 working days from the date of receipt of the dossier for calculating the electricity generation price bracket mentioned in Article 11 of this Circular, the Electricity Regulatory Authority of Vietnam shall inspect in detail the content of the dossier, the completeness and validity of the dossier submitted for approval. If necessary, the Electricity Regulatory Authority of Vietnam shall issue a written request to EVN to amend, supplement or clarify the contents of the dossier. No later than 15 working days from the date of receipt of the request for amendment, supplementation or clarification of the contents in the dossier of the Electricity Regulatory Authority of Vietnam, EVN shall send a written explanation report on the contents of the dossier as required.

3. In case of receipt of a valid dossier and a clarification report on the contents of the dossier of EVN, within 20 working days from the date of receipt of the dossier, the Electricity Regulatory Authority of Vietnam shall organize the appraisal of the electricity generation price bracket submitted by EVN.

If necessary, the Electricity Regulatory Authority of Vietnam shall collect opinions on the electricity generation price bracket through the Advisory Council established by the Ministry of Industry and Trade or the affected subjects. The Advisory Council consists of a maximum of 9 members, including 01 chairperson, 01 vice chairperson, 01 secretary, and representatives of relevant units of the Ministry of Industry and Trade with appropriate qualifications and comprehensive knowledge in the field of electricity generation.

4. No later than 15 working days from the date of appraisal of the electricity generation price bracket, the Electricity Regulatory Authority of Vietnam shall submit to the Minister of Industry and Trade for approval the electricity generation price bracket for the type of ground-mounted solar power plants, floating solar power plants, onshore wind power plants, nearshore wind power plants and offshore wind power plants for the next year and publish it on the website of the Electricity Regulatory Authority of Vietnam. In case the electricity generation price bracket of the next year has not yet been announced, the latest effective electricity generation price bracket shall be temporarily applied.

Article 11. Dossier of request for approval of electricity generation price bracket

A dossier of request for approval of the electricity generation price bracket of a ground-mounted solar power plant, floating solar power plant, onshore wind power plant, nearshore wind power plant or offshore wind power plant comprises:

1. Proposal of EVN on the selection of parameters and calculation of electricity generation price bracket.

2. The parameter table and documents for calculating electricity generation prices for standard solar power plants and standard wind power plants in accordance with Chapter II and the Appendix issued together with this Circular.

3. Documents related to the parameters for calculating electricity generation prices.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 12. Organization of implementation

1. The Electricity Regulatory Authority of Vietnam shall appraise the annual electricity generation price bracket and submit it to the Minister of Industry and Trade for approval.

2. If necessary, the Electricity Regulatory Authority of Vietnam shall rebuild the table of parameters used to calculate electricity generation prices for standard solar power plants and standard wind power plants specified in the Appendix to this Circular and report to the Ministry of Industry and Trade for consideration and decision.

3. EVN shall:

a) Select or hire consultants to select standard solar power plants, standard wind power plants.

b) Calculate or hire consultants to calculate the electricity generation price bracket for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, nearshore wind power plants and offshore wind power plants.

c) Submit to the Electricity Regulatory Authority of Vietnam the dossier for calculating the electricity generation price bracket for ground-mounted solar power plants, floating solar power plants, onshore wind power plants, nearshore wind power plants and offshore wind power plants in accordance with Article 10 and Article 11 of this Circular.

Article 13. Effect

1. This Circular takes effect from December 19, 2023.

2. In case the documents referred to in this Circular are amended, supplemented or replaced, the amending, supplementing or replacing ones shall prevail.

3. Any problems arising in the course of implementation of this Circular should be reported to the Ministry of Industry and Trade for appropriate amendment and supplementation./.