THE MINISTRY OF
INDUSTRY AND TRADE
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SOCIALIST REPUBLIC
OF VIET NAM
Independence - Freedom – Happiness
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No. 06/2016/TT-BCT
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Hanoi, June 14,
2016
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CIRCULAR
ON AMENDMENTS TO CIRCULAR
NO. 32/2014/TT-BCT DATED OCTOBER 9, 2014 OF THE MINISTER OF INDUSTRY AND TRADE
ON PROCEDURES FOR ESTABLISHMENT AND APPLICATION OF AVOIDABLE COST SCHEDULE AND
PROMULGATION OF MODEL POWER PURCHASE AGREEMENT (PPA) TO SMALL HYDROPOWER PLANTS
Pursuant to the Government's Decree No.
95/2012/ND-CP dated November 12, 2012, defining the functions, tasks, powers
and organizational structure of the Ministry of Industry and Trade;
Pursuant to the Law on Electricity dated
December 3, 2004; Law on amendments to the Law on Electricity dated November
20, 2012;
At the request of General Director of
Electricity Regulatory Authority,
The Ministry of Industry and Trade promulgates a
Circular on amendments to Circular No. 32/2014/TT-BCT dated October 9, 2014 of
the Minister of Industry and Trade on procedures for establishment and
application of avoidable cost schedule and promulgation of model Power Purchase
Agreement (PPA) to small hydropower plants as follows:
Article 1. Article 7 shall be amended as
follows:
“Article 7. Conditions for application of
avoidable cost schedule satisfied by the Seller
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1. Installed capacity of plants is no more than 30
MW and total electrical power is produced from renewable energy.
2. If the Seller has multiple cascade hydropower
plants on the same river and total installed capacity of those plants is no
more than 60 MW, the procedures below shall be followed:
a) In case where a group of cascade hydropower
plants consists of multiple hydropower plants with capacity of no more than 30
MW which are put into operation for the first time, all hydropower plants in
such group will apply the avoidable cost schedule as prescribed in this
Circular;
b) In case where a group of cascade hydropower
plants consists of multiple hydropower plants with capacity of more than 30 MW
which are put into operation for the first time, the investor shall:
- Determine and negotiate electricity costs, and
conclude PPA as prescribed in Circular No. 56/2014/TT-BCT dated December 19,
2014 of the Ministry of Industry and Trade on method of determination of
electricity generation costs, procedures for inspection of PPA (hereinafter
referred to as Circular No. 56/2014/TT-BCT); and participate in electricity
market in accordance with regulations on electricity market promulgated by the
Ministry of Industry and Trade;
- When the following hydropower plant is put into
commercial operation, the investor may decide to apply one of the following
regulations:
+ Keep determining and negotiating electricity
costs and conclude PPA as prescribed in Circular No. 56/2014/TT-BCT; and
participate in electricity market in accordance with regulations on electricity
market promulgated by the Ministry of Industry and Trade;
+ Applying avoidable cost schedule for all
hydropower plants in the group of cascade hydropower plant from the date on
which the following hydropower plant is put into commercial operation as
prescribed in this Circular.”
Article 2. Clause 2 Article 3 Appendix IV –
Model Power purchase agreement (PPA) applying avoidable cost schedule shall be
amended as follows:
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a) For power plants with capacity of at least 10 MW
The Seller shall invest and provide SCADA system,
system of data measurement and transmission in terms of electricity system
dispatching;
b) For power plants with capacity of from 3 MW to
less than 10MW
The Seller shall invest and provide system of data
measurement and transmission to transmit operating data to the regional
electricity system dispatching center,
c) The Seller shall invest, construct, operate and
maintain the connection facilities to connect the power plant to distribution
electrical grid and SCADA system in accordance with regulations on distribution
grids and other relevant provisions. The Seller shall incur expenses for
upgrading measurement system at electrical substation to measure effective and
reactive power in two directions on distribution lines connected to power
plants as prescribed in Annex C under this Contract;
d) The Buyer is entitled to consider design and
examine the sufficiency of protective equipment. The Buyer shall notify the
Seller of assessment results in writing within 30 days from the day on which all
technical documentation relating to design is received. The Buyer shall notify
the Seller of all detected design errors in writing. The Seller shall implement
amendments proposed by the Buyer in accordance with regulations on distribution
grids, transmission grids according to voltage class connected to the plant;
e) The Buyer shall allow the Seller’s power plant
to be connected to the Buyer’s grids after the Seller has completed all
requirements for amendments proposed by the Buyer and cooperate with the Seller
in completing trial operation and commissioning of the power plant.”
Article 3. Effect
1. This Circular takes effect from July 29, 2016.
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a) With regard to the groups of cascade hydropower
plants having PPA concluded according to the avoidable cost schedule
promulgated before the effective date of this Circular, such avoidable cost
schedule shall be kept applying as prescribed in Circular No. 32/2014/TT-BCT
until December 31, 2016;
b) Until December 31, 2016, if the investors of
power plant fails to put the following hydropower plant of under 30 MW in the groups
of cascade hydropower plants into commercial operation, the procedures below
shall be followed:
- For hydropower plants in the group of cascade
hydropower plants of no more than 30 MW: Apply avoidable cost schedule
prescribed in Circular No. 32/2014/TT-BCT;
- For hydropower plants in the group of cascade
hydropower plants of more than 30 MW: + Keep determining and negotiating
electricity costs and concluding PPA as prescribed in Circular No.
56/2014/TT-BCT; and participating in electricity market in accordance with
regulations on electricity market promulgated by the Ministry of Industry and
Trade. Until December 31, 2016, any investor failing to negotiate the
electricity costs and PPA as prescribed in Circular No. 56/2014/TT-BCT, such
power plant may not generate electricity on the grid and receive payment of
electricity costs;
c) After the following hydropower plant in a group
of cascade hydropower plants is put into commercial operation, the investor may
decide to apply Article 1 of this Circular.
3. Difficulties that arise during the
implementation of this Circular should be reported to Electricity Regulatory
Authority for consideration and Electricity Regulatory Authority shall request
The Ministry of Industry and Trade for appropriate amendments./.
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