On May 12, Sao Mai Group Corporation (ASM) connected the 1.06-MW Sao Mai 1 solar power plant to the national grid.
|The newest solar powered addition to the grid is expected to usher in a new era of renewable energy in Vietnam
The plant, located at Vam Cong Industrial Cluster in Lap Vo district of the southern province of Dong Thap, is the biggest solar power plant in Vietnam at the moment.
Japanese company Koyo Corporation provided and installed all the equipment for the plant. The $2-million plant is going to help decrease the annual cost of electricity that IDI, a member of ASM Group, has to pay by at least 20 per cent.
This project is the first step in ASM’s plan to develop a series of solar power plants with the total designed capacity of 2.5 billion kWh a year within the next 10 years. This is equal to the current total annual demand in the province.
On May 13, another solar power project received approval in principle from the Thanh Hoa People’s Committee. The project would be carried out by a consortium of Song Lam Son La Energy JSC and Song Lam Investment and Construction Co., Ltd.
Located in Yen Thai commune, Yen Dinh district, the project has an area of 65 hectares and a capacity of 30MW, and carries an investment value of VND809 billion ($35.6 million). Construction is planned to start in the fourth quarter of 2017 and the project is going to be completed and start operation in the fourth quarter of 2019.
According to the adjusted Power Development Plan VII, Vietnam targets a solar power capacity of 850MW by 2020.
In April, Prime Minister Nguyen Xuan Phuc signed Decision No.11/2017/QD-TTg on mechanisms for encouraging solar power development in Vietnam. According to the decision, the price at which Electricity of Vietnam (EVN) is going to buy solar power is VND2,086 (9.3 US cents) per cent kWh.
The decision stipulates some incentives (primarily in tax and land rental fees) for investment in solar power production. Specifically, materials, equipment and spare parts imported in order to create the fixed assets for such a project are not subject to import tax if they are not produced domestically.
The investors of the projects enjoy preferential corporate income tax rate, similar to projects in fields prioritised for investment as per current tax regulations.
Additionally, solar power plant projects, as well as construction projects of wires and substations to connect plants to the grid, also enjoy preferential land use fees, land rental fees, and water surface rental fees just like prioritised projects.