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Pivotal power negotiations
Potential renewable energy investors are keenly looking on at pricing negotiations of Vietnam’s first wind power farm.
The outcome of selling power price negotiations between Vietnam Renewable Energy Joint Stock Company (REVN), the investor of Vietnam’s first operating wind power farm and the Electricity of Vietnam (EVN), the country’s sole power distributor, could then determine whether other investors back renewable energy projects in the country.
REVN revealed that it had yet to finish negotiations with the EVN despite its $76.6 million wind power farm connected to the national power grids six months ago.
“We and the EVN had many meetings, but we have not found a common price. The price the EVN offered is too low,” said Nguyen Tien Long, REVN’s Vice General Director. “We are now still selling electricity to the EVN without knowing how much it will pay us,” he added.
The price asked by REVN is 13 cents, in which the EVN will pay 9 cents and the government subsidises the remaining 4 cents, however, the EVN said it could buy at 5-7 cents.
Vietnam’s first wind power farm is located in the southern Binh Thuan province, which can produce 120 megawatts. Late last year, REVN installed five wind turbines and connected them with the national transmission line, with other 15 turbines to be installed and connected by the year’s end.
The divergence in price between REVN and the EVN came amid the Vietnamese government encouraging private investors to invest in renewable energy projects in the country to meet the rising power demand.
Three years ago, the Vietnamese government issued Decision 130/2007/QD-TTg on investment and financial policies for clean development mechanism (CDM) including renewable energy projects.
However, investors have claimed the government should further specify financial support, especially electricity selling prices, to renewable energy projects.
Aerogie.Plus Company’s Vietnam representative Bui Van Son said that REVN and EVN’s power price negotiations would influence the investment trend of other renewable energy investors in Vietnam. The Swiss firm is preparing for a large-scale wind power farm project in the central Ninh Thuan Province.
“Our company and other investors, I believe, will not be enthusiastic to develop new renewable energy projects in Vietnam if our selling price negotiations fail,” Son said.
Nguyen Duc Cuong, Centre for Renewable Energy&CDM director, warned many investors could withdraw from their renewable energy projects if the EVN insisted on such prices similar to hydroelectricity and thermoelectricity.
The Ministry of Industry and Trade asked the Vietnam Energy Association and Vietnam Institute of Energy to independently appraise and calculate selling price offered by REVN as well as which price could be affordable to the EVN. If Vietnam Energy Association and Vietnam Institute of Energy prove the EVN could not afford the offered price, REVN must find other support to stay with its project.
“The appraising processes will finish at the end of this month,” said a Vietnam Institute of Energy source. REVN is not the only investor with an investment certificate for renewable energy projects in Vietnam. According to the Binh Thuan Provincial Department of Planning and Investment, about 12 private investors gained investment certificates to build wind power farms in the province.
“Other investors have gained licences but they are still waiting for specific subsidies from the Vietnamese government. We are the pioneer because we believe the government will subsidise us once the project is operational,” said Long.
vietnamnet, VIR
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