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MINISTRY OF INDUSTRY AND TRADE OF VIETNAM
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No. 15/2022/TT-BCT
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Hanoi, October 03, 2022
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CIRCULAR
METHODS
FOR DETERMINING ELECTRICITY GENERATION PRICE RANGE OF SOLAR POWER PLANTS AND
WIND POWER PLANTS
Pursuant to the Law
on Electricity dated December 3, 2004;
Pursuant to Law on
amendments to Law on Electricity dated November 20, 2012;
Pursuant to the Law
on amendments to the Law on Public Investment, the Law on Public-Private
Partnerships Investment, the Law on Investment, the Law on Houses, the Law on
Bidding, the Law on Enterprises, the Law on Excise Tax, and the Law on Civil
Judgment Enforcement dated January 11, 2022;
Pursuant to Decree
No. 98/2017/ND-CP dated August 18, 2017 of the Government on functions, tasks,
powers, and organizational structure of the Ministry of Industry and Trade;
Pursuant to Decree
No. 137/2013/ND-CP dated October 21, 2013 of the Government on elaborating to
Law on Electricity and Law of amendments to Law on Electricity;
Pursuant to
Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister on
regulations incentivizing development of solar power in Vietnam;
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Pursuant to
Decision No. 39/2018/QD-TTg dated September 10, 2018 of the Prime Minister on
amendment to Decision No. 37/2011/QD-TTg;
At request of
Director of Electricity Regulatory Authority of Vietnam;
The Minister of
Industry and Trade promulgates the Circular on methods for determining
electricity generation price range of solar power plants and wind power plants.
Chapter I
GENERAL
PROVISIONS
Article 1. Scope
and regulated entities
1. This Circular
prescribes the methods and procedures for developing, promulgating electricity
generation price range for ground-mounted solar power plants, floating solar
power plants, onshore wind power plants, and offshore wind power plants.
2. This Circular
applies to:
a) Vietnam
Electricity (hereinafter referred to as “EVN”);
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These power plants
or these parts of power plants must adequately comply with regulations and law
on investment, construction, adhere to absorption capacity of the national
electrical grid and the ability to release capacity of electrical grids;
strictly comply with electricity price structures at the time of operation, and
assume responsibilities for project effectiveness according to approved
regulations. Violations found via inspection or investigation shall be met with
strict punitive actions as per the law. Serious violations can be met with
revocation of investment registration certificate and/or suspension of the
project in accordance with regulations and law on construction investment.
Article 2.
Definition
In this Circular,
terms below are construed as follows:
1. “a standard solar
power plant” means a power plant selected for the purposes of calculating
electricity generation price range of all ground-mounted solar power plants and
floating solar power plants with installed capacity of 50 MWp.
2. “a floating solar
power plant” means a grid-connected solar power plant where solar panels
are installed on a floating structure.
3. “a ground-mounted
solar power plant” means a grid-connected solar power plant other those
described under Clause 2 of this Article.
4. “a standard wind
power plant” means a wind power plant selected for the purpose of
calculating electricity generation price range of onshore wind power plants and
offshore wind power plants with installed capacity of 50 MW.
5. “an onshore wind
power plant” means a grid-connected wind power plant equipped with wind turbines,
built, and operating on land and/or coastal areas whose outer border is the
lowest average sea level of multiple years (18,6 years).
6. “an offshore wind
power plant” means a grid-connected wind power plant equipped with wind
turbines, built and operated seaward beyond the lowest average sea level of multiple
years (18,6 years).
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Chapter II
METHOD
FOR DEVELOPING ELECTRICITY GENERATION PRICE RANGE
Article 3. Rules
for developing electricity generation price range
1. Electricity
generation price range of ground-mounted solar power plants, floating solar
power plants, onshore wind power plants, and offshore wind power plants refers
to prices from the minimum value (0 VND/kWh) to the maximum value.
2. The maximum value
applicable to solar power plants shall be electricity generation price of the
standard solar power plant determined using methods under Article 4, Article 5,
and Article 6 hereof.
3. The maximum value
applicable to wind power plants shall be electricity generation price of the
standard wind power plant determined using methods under Article 7, Article 8,
and Article 9 hereof.
Article 4. Method
for determining electricity generation price of the standard solar power plant
Electricity
generation price PMT (VND/kWh) of the standard solar power plant
shall be determined using the following formula:
PMT = FCMT + FOMCMT
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FCMT:
Average fixed costs of the standard solar power plant determined in accordance
with Article 5 hereof (VND/kWh);
FOMCMT:
Fixed operation and maintenance costs of the standard solar power plant
determined in accordance with Article 6 hereof (VND/kWh).
Article 5. Method
for determining average fixed costs of the standard solar power plant
1. The average fixed
costs FCMT (VND/kWh) of the standard solar power plant serves as a
component for the purpose of investment recovery and is determined using the formula
below:
In which:
TCMT: Annual
converted investment capital for construction of the standard solar power plant
(excluding VAT) is determined in accordance with Clause 2 of this Article
(VND);
: Average electricity yield of the
standard solar power plant over multiple years: determined in accordance with
Clause 5 of this Article (kWh).
2. Annual converted investment
capital of standard solar power plant TCMT (VND) is determined using
the following formula:
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In which:
SDTMT:
Investment unit cost of the standard solar power plant determined in accordance
with Clause 3 of this Article (VND/kWp). kWp measures peak capacity of a solar
panel in standard condition and is published by manufacturers;
PMT:
Installed capacity of the standard solar power plant (kWp) and is determined to
be 50.000 kWp;
nMT:
Economic life of the standard solar power plant is specified under Appendix
attached hereto (year);
i: Discount rate of
the standard solar power plant is determined in accordance with Clause 4 of
this Article (%).
3. Investment unit
cost refers to investment required for 1 kWp of installed capacity of the
standard solar power plant and is determined based on:
a) total investment
of solar power plants that have entered into power purchase agreement with the
EVN or solar power plants where the EVN act as project developers before
January 1, 2021;
b) Data of
counseling organizations.
4. Discount rate i (%)
applying pre-tax weighted average cost of capital of the standard solar power
plant is determined using the formula below:
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In which:
D: Percentage of borrowed
capital in total investment is prescribed under Appendix attached hereto (%);
E: Percentage of
owner’s equity in total investment prescribed under Appendix attached hereto
(%);
nMT: Economic
life of the standard solar power plant is specified under Appendix attached
hereto (year);
nD:
Average debt repayment period is prescribed under Appendix attached hereto
(year);
rd:
Borrowed capital interest rate is determined in accordance with Point a of this
Clause (%);
re:
Pre-tax interest rate of owner’s equity is determined in accordance with Point
b of this Clause (%).
a) Interest of cost
of capital rd (%) is calculated using weighted average interest of capital
borrowed in VND currency and capital borrowed in foreign currency using the
formula below:
rd = DF x rd,F + DD
x rd,D
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DF:
Percentage of capital borrowed in foreign currency over total borrowed capital
is determined on the basis of composition of borrowed capital of solar power
plants according to Point b Clause 2 Article 1 hereof (%);
DD:
Percentage of capital borrowed in VND over total borrowed capital is determined
on the basis of composition of borrowed capital of solar power plants according
to Point b Clause 2 Article 1 hereof (%);
rd,F:
Interest rate of capital borrowed in foreign currency is determined on the
basis of: interest rate of capital borrowed in foreign currency of power plants
entering into power purchase agreements during the period of 2017 - 2021 (%/year)
or interest rate of capital borrowed in foreign currency of solar power plants
in accordance with Point b Clause 2 Article 1 hereof;
rd,D:
Interest rate of capital borrowed in VND is determined on the basis of:
interest rate of capital borrowed in VND of power plants entering into power
purchase agreements during the period of 2017 - 2021 (%/year) or interest rate
of capital borrowed in VND of solar power plants in accordance with Point b
Clause 2 Article 1 hereof.
b) Pre-tax interest
rate of owner’s equity re,pt (%) is determined using the formula
below:
In which:
re,pt:
Post-tax interest rate of owner’s equity (%) is determined to be 12%;
t: Average rate of
corporate income tax during economic life of solar power plants is determined
in accordance with applicable laws of the State (%).
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In which:
A: Total solar
panel installation area (m2) is determined in accordance with Clause
6 of this Article;
H: Average annual
radiant intensity of the standard solar power plant (kWh/m2/year);
r: Solar panel
efficiency (%);
PR: Standard solar
power plant efficiency (%).
6. Total installation
area of solar panels (m2) is determined as follows:
In which:
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PTP:
Nominal capacity of solar panel (Wp);
STP:
Surface area of solar panel (m2).
7. PTP, STP, r, H, PR
parameters under Clause 5 and Clause 6 of this Article are determined on the
basis of:
a) Appraised
feasibility study, technical design of solar power plants which have entered
into power purchase agreements before January 1, 2021;
b) Data of
counseling organizations.
Article 6. Method
for determining fixed operation and maintenance costs of the standard solar
power plants
Fixed operation and
maintenance costs FOMCMT (VND/kWh) of the standard power plant
serves as a component to recover major repair costs, personnel costs, and other
costs annually and is determined using the formula below:
In which:
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: Average electricity yield of the
standard solar power plant over multiple years is determined in accordance with
Clause 5 Article 5 hereof (kWh).
2. Total fixed
operation and maintenance costs 
(VND) of the standard solar power plant are
determined using the formula below:
In which:
SDTMT:
Investment unit cost of the standard solar power plant is determined in
accordance with Clause 3 Article 5 hereof (VND/kWp);
PMT:
Installed capacity of the standard solar power plant (kWp) and is determined to
be 50.000 kWp;
kMT:
Percentage of fixed operation and maintenance costs included in investment unit
cost of the standard solar power plant is specified under Appendix attached
hereto (%).
Article 7. Method
for determining electricity generation price of the standard wind power plant
Electricity
generation price PG (VND/kWh) of the standard wind power plant is
determined using the formula below:
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In which:
FCG:
Average fixed costs of the standard wind power plant determined in accordance
with Article 8 hereof (VND/kWh);
FOMCG:
Fixed operation and maintenance costs of the standard wind power plant are determined
in accordance with Article 9 hereof (VND/kWh).
Article 8. Method
for determining average fixed costs of the standard wind power plant
1. The average fixed
costs FCG (VND/kWh) of the standard wind power plant serves as a
component for the purpose of investment recovery and is determined using the formula
below:
In which:
TCG: Annual
converted investment capital for construction of the standard wind power plant
(excluding VAT) is determined in accordance with Clause 2 of this Article
(VND);
: Average electricity yield of the
standard wind power plant over multiple years is determined in accordance with
Clause 5 of this Article (kWh).
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In which:
SDTG:
Investment unit price of the standard wind power plant is determined in
accordance with Clause 3 of this Article (VND/kW);
PG: Installed capacity
of the standard wind power plant (kW) is determined to be 50.000 kW;
nG:
Economic life of the standard wind power plant is specified under Appendix
attached hereto (year);
i: Discount rate of
the standard wind power plant is determined in accordance with Clause 4 of this
Article (%).
3. Investment unit
price is the cost invested in 1 kW of installed capacity of the standard wind
power plant and is determined on the basis of:
a) Total investment
approved of wind power plants that have entered into power purchase agreements
with the EVN before November 1, 2021;
b) Data of
counseling organizations.
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In which:
D: Percentage of
borrowed capital in total investment is prescribed under Appendix attached
hereto (%);
E: Percentage of
owner’s equity in total investment prescribed under Appendix attached hereto
(%);
nG:
Economic life of the standard wind power plant is specified under Appendix
attached hereto (year);
nD:
Average debt repayment period is prescribed under Appendix attached hereto
(year);
rd:
Borrowed capital interest is determined in accordance with Point a of this
Clause (%);
re:
Pre-tax interest rate of owner’s equity is determined in accordance with Point
b of this Clause (%).
a) Interest of cost
of capital rd (%) is calculated using weighted average interest of
capital borrowed in VND currency and capital borrowed in foreign currency using
the formula below:
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In which:
DF:
Percentage of capital borrowed in foreign currency over total borrowed capital
is determined on the basis of composition of borrowed capital of wind power
plants according to Point b Clause 2 Article 1 hereof (%);
DD:
Percentage of capital borrowed in VND over total borrowed capital is determined
on the basis of composition of borrowed capital of wind power plants according
to Point b Clause 2 Article 1 hereof (%);
rd,F:
Interest rate of capital borrowed in foreign currency is determined on the
basis of: interest rate of capital borrowed in foreign currency of power plants
entering into power purchase agreements during the period of 2017 - 2021
(%/year) or interest rate of capital borrowed in foreign currency of wind power
plants in accordance with Point b Clause 2 Article 1 hereof;
rd,D:
Interest rate of capital borrowed in VND is determined on the basis of:
interest rate of capital borrowed in VND of power plants entering into power
purchase agreements during the period of 2017 - 2021 (%/year) or interest rate
of capital borrowed in VND of wind power plants in accordance with Point b
Clause 2 Article 1 hereof.
b) Pre-tax interest
rate of owner’s equity re,pt (%) is determined using the formula
below:
In which:
re,pt:
Post-tax interest rate of owner’s equity (%) is determined to be 12%;
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5. Average annual electricity
yield 
(kWh) of the
standard wind power plant is determined using the formula below:
In which:
EG,P50:
Average forecasted energy yield of 50% of the standard wind power plant is
determined in accordance with Clause 6 of this Article (kWh);
kbd: Total variability
of the standard wind power plant (%);
kpb,P75: Normal
distribution factor corresponding to average forecasted energy yield of 75% of
the standard wind power plant is specified under Appendix attached hereto.
6. The average
forecasted energy yield of 50% of the standard wind power plant (kWh) is
determined as follows:
EG,P50 = 8760 x PG
x kCF
In which:
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kCF: Capacity factor
of the standard wind power plant (%);
7. kCF and
kbd under Clause 5 and Clause 6 of this Article are determined on
the basis of:
a) Appraised
feasibility study, technical design of wind power plants which have entered
into power purchase agreements before November 1, 2021;
b) Data of
counseling organizations.
Article 9. Method
for determining fixed operation and maintenance costs of the standard wind
power plants
Fixed operation and
maintenance costs FOMCG (VND/kWh) of the standard power plant serves
as a component to recover major repair costs, personnel costs, and other costs
annually and is determined using the formula below:
In which:
: Total fixed operation and
maintenance costs of the standard wind power plant are determined in accordance
with Clause 2 of this Article (VND);
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2. Total fixed
operation and maintenance costs 
(VND) of the standard wind power plant are
determined using the formula below:
In which:
SDTG:
Investment unit price of the standard wind power plant is determined in
accordance with Clause 3 Article 5 hereof (VND/kW);
PG:
Installed capacity of the standard wind power plant (kW) is determined to be
50.000 kW;
kG:
Percentage of fixed operation and maintenance costs included in investment unit
cost of the standard wind power plant is specified under Appendix attached
hereto (%).
Chapter III
PROCEDURES
FOR DEVELOPING, APPRAISING, AND PROMULGATING ELECTRICITY PRICE RANGE
Article 10.
Procedures for developing, appraising, and promulgating electricity price range
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2. On the basis of
documents under Clause 1 of this Article, the EVN has the right to hire
consultant to select specifications, calculate, and determine electricity
generation price range of the standard solar power plants in accordance with
Article 4, Article 5, and Article 6 hereof and standard wind power plants in
accordance with Article 7, Article 8, and Article 9 hereof.
3. Within 45 days from
the effective date hereof, the EVN is responsible for developing electricity
generation price range of ground-mounted solar power plants, floating solar
power plants, onshore wind power plants, and offshore wind power plants in
accordance with Article 11 hereof and send to Electricity Regulatory Authority
of Vietnam.
4. Procedures for
appraising electricity generation price range:
a) Within 5 working
days from the date on which documents on calculating electricity generation
price range under Article 11 hereof are received, the Electricity Regulatory
Authority of Vietnam are responsible for inspecting the documents for their
contents, adequacy, and legitimacy.
b) In case the
documents are inadequate or illegitimate, the Electricity Regulatory Authority
of Vietnam is responsible for requesting the EVN in writing to revise or clarify
contents of the documents.
c) Within 45 days
from the date on which adequate documents on calculating electricity generation
price range are received, Electricity Regulatory Authority of Vietnam is
responsible for appraising the electricity price range using methods prescribed
in this Circular.
d) If necessary,
the Electricity Regulatory Authority of Vietnam shall consult independent
experts gather feedback pertaining to the price range via a Board of counsel
established by the Ministry of Industry and Trade.
The Board of
counsel has up to 9 members, including a Chairperson, a Vice Chairperson, a
Secretary, and representatives of relevant entities of Ministry of Industry and
Trade with sufficient specialty and comprehensive understanding in electricity
generation.
5. Within 10 working
days from the date on which appraisal results of electricity generation price
range under Clause 4 of this Article are produced, the Electricity Regulatory
Authority of Vietnam are responsible for finalizing documents and requesting
the Minister of Industry and Trade to approve electricity generation price
range applied to the aforementioned power plants and publicize on website of
the Ministry of Industry and Trade and Electricity Regulatory Authority of
Vietnam.
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The written request
for approval of electricity generation price range for ground-mounted solar
power plants, floating solar power plants, onshore wind power plants, and
offshore wind power plants under Clause 2 Article 1 hereof consists of:
1. Presentation and
calculation of the EVN pertaining to electricity generation price of standard
solar power plant and standard wind power plant.
2. Specifications and
documents on calculating electricity generation price for standard solar power
plant and standard wind power plant in accordance with Article 4, Article 7,
and the Appendix attached hereto.
3. Documents
pertaining to specifications used in calculating electricity generation price
of ground-mounted solar power plants, floating solar power plants, onshore wind
power plants, and offshore wind power plants.
Chapter IV
IMPLEMENTATION
Article 12.
Responsibilities of Ministry of Industry and Trade
1. Assign independent
experts or establish a Board of counsel to appraise the electricity generation
price range in accordance with Point d Clause 4 Article 10 hereof. If
necessary, the Ministry of Industry and Trade shall gather feedback of
ministries and relevant authorities pertaining to electricity generation price
range.
2. Promulgate
electricity generation price range of ground-mounted solar power plants,
floating solar power plants, onshore wind power plants, and offshore wind power
plants after appraising.
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1. Take charge and
cooperate with designated independent experts or the Board of counsel in
accordance with Point d Clause 4 Article 10 hereto in appraising calculation results
of electricity generation price range.
2. Request the
Minister of Industry and Trade to sign and promulgate electricity generation
price range in accordance with this Circular.
Article 14.
Responsibilities of the EVN
1. Promulgate
documents and send to investors of ground-mounted solar power plants and
floating solar power plants that have entered into power purchase agreements
before January 1, 2021 and onshore wind power plants and offshore wind power
plants that have entered into power purchase agreements before November 1, 2021
regarding appraised provision of feasibility study and technical design.
2. Present the
documents on calculating electricity generation price range of ground-mounted
solar power plants, floating solar power plants, onshore wind power plants, and
offshore wind power plants to the Electricity Regulatory Authority of Vietnam
in accordance with Article 10 and Article 11 hereof.
Article 15. Entry
into force
1. This Circular comes
into force from November 25, 2022
2. If the legislative
documents extracted in this Circular are amended or superseded by other
legislative documents, the new documents shall prevail.
3. Difficulties that
arise during the implementation of this Circular should be reported to the
Ministry for consideration./.
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PP. MINISTER
DEPUTY MINISTER
Dang Hoang An