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Vietnam investors raise concerns over pricing

Tan KW
Publish date: Thu, 23 Mar 2023, 08:18 AM
Tan KW
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HANOI: Investors in numerous renewable energy projects are demanding solutions to resolve pricing issues with Vietnam Electricity (EVN).

Tran Dinh Nhan, EVN’s director-general, said the utility welcomes input and feedback from investors and its partners and that the company has been working around the clock to resolve issues raised, following a guideline set by the Industry and Trade Ministry (MoIT).

Nguyen Thi Thanh Binh, deputy director-general of T&T Group, said investors and businesses are especially concerned about a MoIT decision to bring down prices to 1,185 to 1,508 Vietnamese dong (22.5 to 28.6 sen)/kWh for solar and 1,587 to 1,816 Vietnamese dong (30 to 34.4 sen)/kWh for wind, a 20% to 30% reduction in comparison to the previous feed-in tariff, which was set 20 years ago.

She also raised several issues with the current legal framework and said investors and businesses have not been consulted about how price calculations are being done.

“Investors ask MoIT to review the process and introduce a new price calculation mechanism, which should be in accordance with regulations.

“We strongly believe an independent consulting agency should be brought in to ensure transparency and fairness during the process,” she said.

Do Van Binh, director-general of Dai Duong Renewable Energy, said the ministry has been slow to roll out a guideline for the calculations.

Investors have also asked the ministry to quickly connect already-finished renewable projects to the national grid and keep a record of their input, for which prices can be determined at a later date.

In addition, investors said they are concerned over the removal of several incentive schemes by the ministry, namely a 20-year fixed price, maintaining conversion rates to the US dollar, and guaranteeing the purchase of the entire output.

Binh said the incentives were set up to encourage investment in renewable and cleaner energy in line with the government’s direction to break away from traditional energy sources.

“We hope for a stable environment and a system in which the prices reflect the amount of investment we have put in,” she said.

Pham Nguyen Hung, deputy director of MoIT’s Department of Electricity and Renewable Energy, said the incentives, while in fact designed to encourage investment, cannot stay in place indefinitely and are subject to change within the market.

 - ANN

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