Feed-in-tariffs to rise as Vietnam desires sustainability

On the sidelines of a Ministry of Industry and Trade (MoIT) meeting last week regarding changing the wind and solar power development policy, an official told VIR that the new price for wind power could be raised to 9 cents per kilowatt-hour from the current 7.8 cent/kWh.

“With this new price, wind power is going to be more feasible to many investors,” the official said, declining to be named.

The current feed-in-tariff (FiT) for wind power released in 2011 does not meet the expectations of wind power investors. They complain that this FiT is too low to provide any profits, and is too little to guarantee banks loans, ultimately resulting in the delay of several wind power projects.

To encourage investment in renewable energy projects, MoIT has also submitted the first draft on incentives for solar power projects to the prime minister.

Under the draft, the ministry proposed a set FiT of 11.2 cents/kWh for solar power. This level is higher than the current tariff set for wind power plants (7.8 cents/kWh), biogas plants (7.28), and waste-to-power plants (10.05).

Debates over FiTs for wind and solar power plants are intensifying, as MoIT is in the process of revising the support mechanisms granted to wind and solar power projects.

According to MoIT sources, the time to apply the new price of wind and solar power may be late 2016, which would ease concerns of Thien Tan Group as this private firm’s 19.2 megawatt solar power plant in central Quang Ngai province is expected to connect to the grid in late 2016.

Huynh Van Lap, chairman of Thien Tan Group, told VIR in a previous interview that the project’s connection date depends on the government-set FiTs. “How do we sell a product if there is no price?” he said.

Thien Tan Group stated that a compromise could still make undertaking solar projects a worthwhile endeavour.

Nguyen Duc Cuong, head of MoIT’s Institute of Energy, said currently, there is no detailed regulatory framework for solar power generation projects in Vietnam, and the upcoming decision may be considered an incredibly important step for solar power development in the country. “A greater understanding of the involved regulations would help to attract more investors to this type of renewable energy.”