Decision No. 08/2020/QD-TTg amending Decision No. 24/2014/QD-TTg

DECISION

Amending and supplementing a number of articles of the Prime Minister’s Decision No. 24/2014/QD-TTg of March 24, 2014, on support mechanisms for development of biomass power projects in Vietnam^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the December 3, 2004 Electricity Law,; and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Electricity Law;

Pursuant to the November 26, 2014 Investment Law; and the November 22, 2016 Law Amending and Supplementing a Number of Articles of the Investment Law;

Pursuant to the June 18, 2014 Construction Law;

Pursuant to the November 24, 2017 Planning Law;

At the proposal of the Minister of Industry and Trade;

The Prime Minister promulgates the Decision amending and supplementing a number of articles of the Prime Minister’s Decision No. 24/2014/QD-TTg of March 24, 2014, on support mechanisms for development of biomass power projects in Vietnam.

Article 1.To amend and supplement a number of articles of the Prime Minister’s Decision No. 24/2014/QD-TTg of March 24, 2014, on support mechanisms for development of biomass power projects in Vietnam

1. To amend Clauses 1 and 2, Article 1 as follows:

“1. This Decision provides the mechanisms to promote the development of on-grid power generation projects using biomass energy in Vietnam, below referred to as biomass power projects.

2. This Decision applies to organizations and individuals engaged in electricity activities related to the development of biomass power projects.”

2. To amend Clauses 1 and 2, Article 2 as follows:

“1. Electricity buyer means the Vietnam Electricity Group or one of its authorized member units or an organization that takes over the former’s rights and obligations in accordance with law.

2. Electricity seller means an organization or individual engaged in power generation activities from biomass power projects or an organization or individual that takes over the former’s rights and obligations in accordance with law.”

3.To annul Clauses 8, 10, and 11, Article 2; and Articles 3, 4 and 5.

4. To amend Article 6 as follows:

“Article 6. Investment in construction of biomass power projects

1. The development of biomass power projects must comply with relevant master plans. The appraisal and approval for additional incorporation of biomass power projects in relevant master plans must comply with the current planning law. Biomass power projects incorporated in approved electricity development master plans at all levels must comply with transitional provisions in Article 59 of the 2017 Planning Law and the National Assembly Standing Committee’s Resolution No. 751/2019/UBTVQH14 of August 16, 2019, explaining a number of articles of the 2017 Planning Law.

2. Main equipment of biomass power projects must satisfy technical regulations under current law. Electricity quality of biomass power projects must meet technical requirements on voltage and frequency, and requirements on operation of the national power system under current regulations.

3. Investment in construction of biomass power projects must comply with the laws on investment, construction, electrical safety, land, fire prevention and fighting, and environmental protection, and other relevant laws.”

5. To amend Article 7 as follows:

Article 7. Connection of biomass power projects to the power system

1. An electricity seller shall invest in, install, operate and maintain electricity metering devices, transmission lines and booster transformer stations (if any) from its power plant to the points of connection with the power grid of the electricity buyer; and organize inspection, calibration and testing of electricity metering devices in accordance with the law on measurement.

2. The electricity seller and electricity buyer shall reach agreement on points of connection, ensuring the output transmission of the power plant of the electricity seller and conformity with the approved master plan. In case the connection point is different from the point of installation of electricity metering devices, the electricity seller shall bear electricity loss on connection lines and booster transformers of the plant.”

6.To annul Articles 8, 9 and 10.

7. To amend Article 11 as follows:

“Article 11. Responsibility to purchase electricity from power projects

1. The electricity buyer shall buy the whole electricity output generated from biomass power plants in accordance with the regulations on operation of the national electric system and standards and technical regulations of the electricity sector; and prioritize exploiting the designed capacity and generated electricity output of biomass electricity projects.

2. The model electricity purchase and sale contract is compulsorily applicable to biomass power projects in electricity purchase and sale between the electricity seller and electricity buyer.

3. The term of an electricity purchase and sale contract applicable to a biomass power project is 20 years from the date of commercial operation of the project. Upon the expiration of this duration, the two parties may extend the contract or sign a new one in accordance with current regulations.”

8.To annul Articles 12 and 13.

9. To amend Article 14 as follows:

“Article 14. Electricity prices applicable to biomass power projects

1. For combined heat-power projects: The electricity purchase price bracket at an electricity delivery and receipt point is VND 1,634/kWh, roughly 7.03 US cents/1 kWh, according to the exchange rate between Vietnam dong and US dollar announced by the State Bank of Vietnam on February 21, 2020.

2. For projects other than combined heat-power projects: The electricity purchase price bracket at an electricity delivery and receipt point is VND 1,968/kWh, roughly 8.47 US cents/1 kWh, according to the exchange rate between Vietnam dong and US dollar announced by the State Bank of Vietnam on February 21, 2020.

3. Electricity purchase prices specified in Clauses 1 and 2 of this Article are exclusive of value-added tax and may be adjusted depending on fluctuations of US dollar (US cents/kWh), and applicable exchange rate is the exchange rate between Vietnam dong and US dollar announced by the State Bank of Vietnam on the date the electricity seller issues the payment invoice.

4. Biomass power projects that operate to generate electricity before the promulgation of this Decision may apply electricity purchase prices specified in Clauses 1 and 2 of this Article from the effective date of this Decision for the remaining term of signed electricity purchase and sale contracts.

5. Expenses for purchasing electricity from biomass power projects mentioned in Clauses 1 and 2 of this Article shall be calculated and fully included in input parameters in approved annual electricity selling price plans of the Vietnam Electricity Group.

6. Biomass power projects that apply electricity purchase prices specified in Clauses 1 and 2 of this Article may not apply the pricing mechanism for their electricity outputs under other current regulations.”

10.To annul Article 15.

11. To amend Article 16 as follows:

“Article 16. Responsibilities of related organizations and individuals

1. The Ministry of Industry and Trade shall:

a/ Organize and guide, and coordinate with provincial-level People’s Committees in examining and urging, the implementation of this Decision.

b/ Promulgate a model electricity purchase and sale contract applicable to biomass electricity projects under this Decision.

c/ Issue regulations and technical regulations on equipment, pre-acceptance test and trial operation of biomass power plants.

d/ Monitor, and propose adjustments to, electricity purchase prices for biomass power projects before reporting them to the Prime Minister for consideration and decision.

2. Provincial-level People’s Committees shall:

a/ Coordinate with and assist investors in payment of compensations, ground clearance, building of infrastructure and training of human resources for investment in, and implementation and development of, biomass power projects in their localities.

b/ Monitor, supervise and inspect the implementation of biomass power projects in their localities according to their competence.

c/ Perform the state management of biomass power-related activities in their localities in accordance with current regulations.

3. The Vietnam Electricity Group shall fully calculate expenses for purchase of electricity from biomass power projects and include them in input parameters in its annual electricity selling price plans before submitting them to the competent authority for approval.

4. Electricity sellers shall abide by regulations on electric system operation, electricity transmission systems, electricity distribution systems and electricity output metering systems, and other relevant regulations.”

Article 2.Effect

1. This Decision takes effect on April 25, 2020.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and heads of agencies, units and organizations involved in development activities of biomass power projects in Vietnam shall implement this Decision.-

Prime Minister
NGUYEN XUAN PHUC