Dec 18, 2012

Vietnam - New regulation set to unbutton wind energy

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Renewable energy developers will be offered a clearer and specific  mechanism for setting up electricity purchasing prices of their projects in Vietnam.

According to the Article 16 of the Circular 32/2012/TT-BCT issued by the Ministry of Industry and Trade (MoIT) about wind energy development, which will come into force on December 27, the MoIT’s General Directorate of Energy will propose changes of electricity purchasing prices for wind farm projects and prioritised support fees for electricity produced by wind farms before October 30 every year. The proposals will be submitted for prime ministerial approval.

According to the circular, the sole electricity buyer of wind farms in Vietnam is still the state-run Electricity of Vietnam (EVN).

“This is a big and positive move for wind energy developers in Vietnam. I’m really happy with this step of the Vietnamese government,” said Le Khac Thi, chairman and president of Asia Renewable Energy Corporation, the developer of Thuan Nhien Phong wind farm with the capacity of 32 megawatts in the first phase and with the total capacity of 60MW in the future.

“This is the positive legal foundation for any increase of purchasing prices for electricity produced by wind farms in Vietnam. I believe the purchasing prices will increase to a suitable level in the future,” said Thi, adding that the Vietnamese government had increased the purchasing prices for four times since 2007.

“Vietnam should immediately approve the buying and selling (Feed-in-Tariff) mechanism from renewable energy sources, in particular wind power, improving up 12.00 centUS per kwh,” suggested Gueünter Reithmacher, chief representative of German International Cooperation Organization (GIZ) in Vietnam.

“Now comparing the buying and selling prices of renewable energy in some countries in the region, Vietnam’s existing level is very low,” said Tran Van Binh, a renewable energy consultant.

Currently, the purchasing price of electricity produced by wind farms in Vietnam is set at 6.8 UScents. In addition, wind energy developers can enjoy another 1 UScent subsidy from the state budget for a period of 20 years.

Other incentives are import tax exemption on machinery and equipment imported for the wind energy projects, preferential corporate income tax rate of 10 per cent for the whole life of the projects, exemptions from land use, land rentals and environmental protection fees for the entire project.

Rong Bien |

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