Solar power in Duc Hoa District in Long An Province.
In the South, many solar power projects have been continuously started and completed quickly and put into operation. The investment is so hot that many projects are completed but cannot go online due to a shortage of power grids, especially in Ninh Thuan and Binh Thuan provinces. To deal with this situation, Vietnam Electricity (EVN) has speedily invested and put in use 21 power grid projects from 110kV to 500kV, with a total length of more than 750 kilometers of lines, and transformer substations, with a capacity of 5,025 mega-volt amperes (MVAs), to release the power capacity for 113 solar and wind power projects whose total capacity is over 5,700 megawatts (MWs).
So far, the country has put into operation 102 more solar power projects, with a total capacity of 6,314 megawatt-peak (MWp). According to Mr. Nguyen Van Ly, Deputy General Director of the Southern Power Corporation (EVNSPC), the southern provinces from Ninh Thuan onwards have the highest amount of solar radiation in the country with over 90 percent of sunny days in a year. Therefore, this area has favorable conditions for the strong development of solar power.
Meanwhile, in the Mekong Delta, many provinces are joining hands with each other with the determination to become the national energy center. They all choose to develop wind, solar, and gas power as a breakthrough for sustainable development. For instance, in Bac Lieu Province, 12 wind power projects, and the LNG power projects with an investment of US$4 billion have been started. Besides, several solar power projects are racing against time to finish before January 2021.
Soc Trang Province has started many wind power projects in Vinh Chau Town in Tran De District. Or in Ca Mau Province, with three sides bordering the sea, it is the province with the largest aquaculture area in the country with over 280,000 hectares. However, it still prioritizes the development of clean energy to make a breakthrough in economic development. Up to now, more than 30 investors have officially approached, studied, and proposed to carry out projects with a total capacity of about 12,000MWs. Of which, wind power projects have a total capacity of 6,050MWs, solar power with 1,450MWp, and LNG power project with 4,500MWs.
In Hue City, there is also an upcoming LNG power plant with a total design capacity of 4,000MWs, worth $6 billion, which is expected to locate in Chan May - Lang Co Economic Zone. This power plant is invested and developed by Chan May LNG Joint Stock Company. This is an independent power project (IPP), meaning that it does not use state budget capital to invest, generate, and sell electricity following the regulations on electricity. The project is 60 percent owned by US investors and 40 percent by Vietnamese ones. When coming into operation, the plant is expected to provide an average electricity output of 24-25 billion kWh annually.
Last October, Vietnam and the US signed many memorandums of understanding on energy investment for up to tens of billions of US dollars. For instance, the Bac Lieu LNG power project has a capacity of 3,200MWs, with a total investment of up to $50 billion within 25 years. It is expected that it will import up to 3 million tons of LNG per year. The Long An LNG power project with a capacity of 3,000MWs has strategic importance as it will meet about 8 percent of the country's energy demand when it is put into operation.
Along with heavy investments in the above types of energy projects, investors have recently also proposed the Ministry of Industry and Trade to request EVN to sign power purchase agreements (PPA) at maximum for a fixed price to avoid risks, at the same time, help investors to raise capital when the government's loan guarantees are no longer available.
If policies on PPA model contract were not released early, or at the least, the policy stance of the IPP contracts was not clarified, it would inevitably affect the progress of projects in the coming time, said Mr. Dang Huy Dong, former Deputy Minister of Planning and Investment, a consultant for the Bac Lieu LNG thermal power project.
According to Mr. Nguyen Anh Tuan, Director of the Electricity Regulatory Authority of Vietnam under the Ministry of Industry and Trade, in the past, regulations often based on the balance of power supply and demand to require EVN to pledge to buy 80-85 percent of power output every year and depending on for each type of power plants, such as 80 percent for hydroelectricity and 85 percent for thermal power. However, the electricity market has now turned to the wholesale level. Therefore, there will be new mechanisms and policies suitable for the electricity market with many sellers and buyers instead of just EVN and power corporations as currently.
The commit-to-buy power output will be negotiated by the seller and the buyer. However, the State management agency still sets a limit of not less than 60 percent, and the highest level is 100 percent of the output that power plants can generate. This is also a condition for IPP investors to get acquainted with the absence of government guarantees, fortify their position to participate in the development and completion of the competitive retail electricity market in which power plants directly sell electricity to people in 2023.