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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.19/2023/TT-BCT
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Hanoi, November 01,
2023
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CIRCULAR
METHODS
FOR DETERMINATION OF SOLAR POWER AND WIND POWER GENERATION PRICING FRAMEWORK
Pursuant to the Government’s Decree No. the
Government's Decree No. 96/2022/NĐ-CP dated August 29th 2022 on
functions, tasks, entitlements and organizational structure of the Ministry of
Industry and Trade;
Pursuant to the Government’s Decree No.
137/2013/NĐ-CP dated October 21st 2013 elaborating some Articles of
Law on Electricity;
At request of the Director of Electricity
Regulatory Authority of Vietnam;
The Minister of Industry and Trade
promulgates a Circular on methods for determination of solar power and wind
power generation pricing framework
Chapter I
GENERAL
PROVISIONS
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1. This Circular provides for:
a) Methods for developing the annual
electricity generation pricing framework for ground-mounted solar power plants,
floating solar power plants, onshore, inshore and offshore wind power plants;
b) Procedures for developing and promulgating
annual electricity generation pricing framework.
2. This Circular does not apply to solar
power plants and wind power plants prescribed in Point b Clause 2 Article 1 of
Circular No. 15/2022/TT-BCT dated cot 3rd 2022 of the Minister of
Industry and Trade on methods for determination of transitional solar power and
wind power generation pricing framework, solar power plants and wind power
plants having power purchase agreements (PPAs) with Vietnam Electricity (EVN)
with effective electricity prices.
3. This Circular applies to:
a) Vietnam Electricity (EVN);
b) Organizations and individuals investing in
solar power plants and wind power plants;
c) Other relevant organizations and
individuals.
Article 2.
Definitions
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1. " standard solar power plant” means a
power plant in which investors are selected on the basis of implementation of
the National Electricity Development Planning, with a popular installed
capacity, has not entered into any PPA, is representative of ground-mounted and
floating solar power plants, and is used for calculation of electricity
generation pricing framework for such type of power plant.
2. “floating solar power plant” means a
grid-connected solar power plant where solar panels are installed on a floating
structure.
3. “ground-mounted solar power plant” means a
grid-connected solar power plant other those described under Clause 2 of this
Article.
4. "standard wind power plant” means a
power plant in which investors are selected on the basis of implementation of
the National Electricity Development Planning, with a popular installed
capacity, has not entered into any PPA, is representative of onshore, inshore
and offshore wind power plants, and is used for calculation of electricity
generation pricing framework for such type of power plant.
5. “onshore wind power plant” means a
grid-connected wind power plant where the center of the foundation of the wind turbines
are built and operated inside the area whose outer limit is the lowest average
sea level of multiple years according to applicable regulations.
6. “inshore wind power plant” means a
grid-connected wind power plant where the center of the foundation of the wind turbines
are built and operated inside the area from the lowest average sea level of
multiple years according to applicable regulations extended 06 nautical miles
seaward.
7. “offshore wind power plant” means a
grid-connected wind power plant with wind turbines built beyond the
6-nautical-mile waters from the land.
8. “total investment” means the total
construction investment of a project determined according to applicable laws
and appropriate for the fundamental design and other details under construction
investment feasibility reports.
Chapter II
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Article 3. Rules for
developing electricity generation pricing framework
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.
4. The electricity generation pricing framework
of ground-mounted and floating solar power plants shall be developed on the
basis of the average radiant intensity of the Northern, Central and Southern
regions.
5. The standard solar power plant shall be
selected for development of electricity generation pricing framework in the
regions mentioned in Clause 4 of this Article.
Article 4. Method for
determining electricity generation price of the standard solar power plant
Electricity generation price 
(VND/kWh) of the standard solar
power plant shall be determined using the following formula:
= FCMT + FOMCMT
Where:
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Average fixed cost of the standard solar
power plant determined in accordance with Article 5 hereof (VND/kWh);
FOMCMT:
Fixed operation and maintenance cost 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 cost 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:
Where:
TCMT :
Annual converted investment capital for
construction of the standard solar power plant (excluding VAT) determined in
accordance with Clause 2 of this Article (VND);
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Average electrical energy delivered by 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:
Where:
SĐTMT:
Investment rate 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;
PMT:
nMT:
Economic life of the standard wind power
plant specified under Appendix attached hereto (year);
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i: Discount rate of the standard solar
power plant determined in accordance with Clause 4 of this Article (%).
3. Investment rate means investment required
for 01 kWp of installed capacity of the standard solar power plant (excluding
investment in transmission lines and substations to the point of connection,
energy storage system) and is determined on the basis of the total investment
and exchange rate at the time of calculation of electricity generation prices,
with reference to data provided by counseling organizations (if necessary)
4. The discount rate i (%) applying the
nominal pre-tax weighted mean cost of capital of the standard solar power plant
is determined using the formula below:
Where:
D:
Ratio of borrowed capital (loan) to total
investment prescribed in the Appendix hereof (%);
E:
Ratio of equity to total investment
prescribed in the Appendix hereof (%);
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Economic life of the standard wind power
plant specified in the Appendix hereof (year);
nD:
Average debt repayment period prescribed in
the Appendix hereof (year);
rd:
Loan interest rate determined in accordance
with Point a of this Clause (%);
re:
Ratio of pre-tax profit to equity is
determined in accordance with Point b of this Clause (%).
a) Loan interest rate rd (%) is
calculated using weighted mean interest rate of loans in VND and foreign
currencies using the formula below:
rd = DF
x rd,F + DD x rd,D
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DF:
Ratio of loans in foreign currencies to
total loans prescribed in the Appendix hereof (%);
DD:
rd,F:
Foreign currency loan interest shall be
equal to the Secured Overnight Financing Rate (SOFR) with an average term of 180
days over 36 months preceding the calculation date announced by FED
(www.newyorkfed.org) plus (+) annual average arrangement fee charged by the
bank at 3% per year;
rd,D:
VND loan interest shall be equal to the
average VND deposit interest rate with a term of 12 months for individual
customers of 05 years preceding the year of calculation, determined on
September 30th every year by Vietcombank, VietinBank, BIDV and
Agribank or their lawful inheritors, plus (+) the annual average arrangement
fee charged by the banks at 3,5% per year.
b) Ratio of pre-tax profit to equity re
(%) is determined using the formula below:
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re,pt:
Ratio of post-tax profit to equity, which
is 12%;
t:
Average rate of corporate income tax during
economic life of the solar power plant, which is determined in accordance
with applicable laws of the State (%).
5. Average annual electrical energy delivered
(kWh) by the
standard solar power plant is determined using the formula below:
= A x r x H x PR
Where:
A:
A: Total solar panel installation area (m2)
commensurate with the installed capacity of the standard solar power plant,
which determined in accordance with Clause 6 of this Article;
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Average annual radiant intensity in three
regions (Northern, Central and Southern regions) of the standard solar power
plant (kWh/m2/year);
r:
Solar panel efficiency (%);
PR:
Standard solar power plant efficiency (%).
6. A, r, H, PR parameters under Clause 5 of
this Article shall be determined on the basis of:
a) The feasibility study report or approved
engineering design of the standard solar power plant; or
Article 6. Method for
determining fixed operation and maintenance costs of the standard solar power
plants
1. Fixed operation and maintenance cost FOMCMT
(VND/kWh) of the standard solar power plant serves as a component to recover
major repair costs, personnel costs, and other costs annually and is determined
using the formula below:
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Where:
:
Total fixed operation and maintenance cost
of the standard solar power plant determined in accordance with Clause 2 of
this Article (VND);
:
Average electrical energy delivered by the
standard solar power plant over multiple years determined in accordance with
Clause 5 Article 5 hereof (kWh).
2. Total fixed operation and maintenance
cost 
(VND) of the
standard solar power plant are determined using the formula below:
= SĐTMT x PMT
x kMT
Where:
SĐTMT:
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PMT:
Installed capacity of the standard solar
power plant determined in accordance with Clause 1 Article 2 hereof (kWp);
kMT:
Ratio of fixed operation and maintenance
cost to investment rate of the standard solar power plant determined
according to data provided by counseling organizations.
Article 7. Method for
determining electricity generation price of the standard wind power plant
Electricity generation price 
(VND/kWh) of the standard wind
power plant is determined using the formula below:
= FCG + FOMCG
Where:
FCG:
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FOMCG:
Fixed operation and maintenance cost 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:
Where:
TCG:
Annual converted investment in
construction of the standard wind power plant (excluding VAT) determined in
accordance with Clause 2 of this Article (VND);
:
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Where:
SĐTG:
Investment rate of the standard wind power
plant determined in accordance with Clause 3 of this Article (VND/kW);
PG:
Installed capacity of the standard wind
power plant determined in accordance with Clause 4 Article 2 hereof (kW);
nG:
Economic life of the standard wind power
plant specified in the Appendix hereof (year);
i:
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3. Investment rate means investment required
for 01 kW of installed capacity of the standard wind power plant (excluding
investment in transmission lines and substations to the point of connection,
energy storage system) and is determined on the basis of the total investment
and exchange rate at the time of calculation of electricity generation prices,
with reference to data provided by counseling organization (if necessary)
4. Discount rate i (%) applying the nominal
pre-tax weighted mean cost of capital of the standard wind power plant is
determined using the formula below:
Where:
D:
Ratio of borrowed capital to total
investment prescribed in the Appendix hereof (%);
E:
Ratio of equity to total investment
prescribed in the Appendix hereof (%);
nG:
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nD:
Average debt repayment period prescribed in
the Appendix hereof (year);
rd:
Loan interest rate determined in accordance
with Point a of this Clause (%);
re:
Ratio of pre-tax profit to equity is
determined in accordance with Point b of this Clause (%).
a) Loan interest rate rd (%) is
calculated using weighted mean interest rate of loans in VND and foreign
currencies using the formula below:
rd = DF
x rd,F + DD x rd,D
Where:
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DD:
Ratio of loans in VND to total loans
prescribed in the Appendix hereof (%);
rd,F:
Foreign currency loan interest shall be
equal to the Secured Overnight Financing Rate (SOFR) with an average term of
180 days over 36 months preceding the calculation year announced by FED
(www.newyorkfed.org) plus (+) annual average arrangement fee charged by the
bank at 3% per year;
rd,D:
VND loan interest shall be equal to the
average VND deposit interest rate with a term of 12 months for individual
customers of 5 years preceding the year of calculation, determined on
September 30th every year by Vietcombank, VietinBank, BIDV and
Agribank or their lawful inheritors, plus (+) the annual average arrangement
fee charged by the banks at 3,5% per year.
b) Ratio of pre-tax profit to equity re (%)
is determined using the formula below:
Where:
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Ratio of post-tax profit to equity, which
is 12%;
t:
Average rate of corporate income tax during
economic life of wind power plants is determined in accordance with
applicable laws of the State (%).
5. Average annual electrical energy delivered
(kWh) by the
standard wind power plant is determined using the formula below:
= EG,P50 - EG,P50
x kbd x kpb,P75
Where:
EG,P50:
Forecasted average annual electrical energy
of 50% delivered by the standard wind power plant determined in accordance
with Clause 6 of this Article (kWh);
kbd:
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kpb,P75:
Standard distribution factor corresponding
to average forecasted electrical energy delivered of 75% by the standard wind
power plant specified in the Appendix hereof.
6. The average forecasted electrical energy delivered
of 50% by the standard wind power plant (kWh) is determined as follows:
EG,P50
= 8760 x PG x kCF
PG:
Installed capacity of the standard wind
power plant determined in accordance with Clause 4 Article 2 hereof (kW);
kCF:
Capacity factor of the standard wind power
plant (%);
7. kCF, kbd under
Clause 5 and Clause 6 of this Article are determined on the basis of:
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b) Data provided by counseling organizations.
Article 9. Method for
determining fixed operation and maintenance costs of standard wind power plants
1. Fixed operation and maintenance costs FOMCG
(VND/kWh) of the standard wind power plant serves as a component to recover
major repair costs, personnel costs, and other costs annually and is determined
using the formula below:
Where:
:
Total fixed operation and maintenance cost
of the standard wind power plant determined in accordance with Clause 2 of
this Article (VND);
:
Average annual electrical energy delivered
by the standard wind power plant determined in accordance with Clause 5
Article 8 hereof (kWh).
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= SĐTG x PG
x kG
Where:
SĐTG:
Investment rate of the standard wind power
plant determined in accordance with Clause 3 Article 8 hereof (VND/kW);
PG:
Installed capacity of the standard wind
power plant (kW) prescribed in Clause 4 Article 2 hereof (kW);
kG:
Ratio of fixed operation and maintenance
cost to investment rate of the standard wind power plant determined according
to data provided by counseling organizations (%).
Chapter III
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Article 10.
Procedures for developing and promulgating electricity pricing frameworks
1. Before November 1st every year,
EVN shall:
a) Propose selection of a standard solar
power plant and standard wind power plant for development of the electricity
pricing framework.
c) Prepare documentation for calculation of
the next year's electricity generation pricing frameworks of ground-mounted
solar power plants, floating solar power plants, onshore, inshore and offshore
wind power plants in accordance with Article 11 hereof, and submit them to the
Electricity Regulatory Authority of Vietnam for appraisal.
2. Within 5 working days from the date of
receipt of the application for approval of electricity generation pricing
framework mentioned in Article 11 of this Circular, Electricity Regulatory
Authority shall examine its adequacy and validity. If necessary, Electricity
Regulatory Authority will send a document requesting EVN to revise, supplement
or explain the contents of the application. Within 15 working days from the
date of receipt of the request from Electricity Regulatory Authority, EVN shall
send an explanatory report as requested.
3. If EVN's application is valid and the
explanatory report is satisfactory, within 20 working days from the date of
receipt of the application, Electricity Regulatory Authority shall organize
appraisal of the electricity generation pricing frameworks proposed by EVN.
If necessary, Electricity Regulatory
Authority of Vietnam may consult the Advisory Board established by the Ministry
of Industry and Trade or the affected entities. The Advisory Board 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
appropriate qualifications and comprehensive understanding in electricity
generation.
Article 11.
Application for approval of electricity generation pricing frameworks
An application for approval of electricity
generation pricing frameworks of ground-mounted solar power plants, floating solar
power plants, onshore, inshore and offshore wind power plants consists of:
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2. The datasheet and documents on calculating
electricity generation prices of the standard solar power plant and standard
wind power plant in accordance with Chapter II and the Appendix hereof.
3. Documents pertaining to the parameters for
calculation of electricity generation prices.
Chapter IV
IMPLEMENTATION
CLAUSES
Article 12.
Implementation organization
1. Electricity Regulatory Authority shall
appraise annual electricity generation pricing frameworks and submit them to
the Minister of Industry and Trade for approval.
2. If necessary, Electricity Regulatory
Authority shall re-develop the datasheets used for calculation of electricity
generation prices of the standard solar power plant and standard wind power
plant according to the Appendix hereof, and submit a report to the Ministry of
Industry and Trade for consideration and decision.
3. EVN shall:
a) Select or hire a counseling organization
to select a standard solar power plant and standard wind power plant.
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c) Submit to Electricity Regulatory Authority
the documentation for calculation of the next year's electricity generation
pricing frameworks of ground-mounted solar power plants, floating solar power
plants, onshore, inshore and offshore wind power plants in accordance with
Article 10 and Article 11 of this Circular.
Article 13. Entry
into force
1. This Circular comes into force from
December 19th 2023.
2. In case If the legislative documents
referred to in this Circular are amended or replaced by other legislative
documents, the new documents shall prevail.
PP MINISTER
DEPUTY MINISTER
Nguyen Sinh Nhat Tan
APPENDIX
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I. PARAMETERS FOR CALCULATION OF ELECTRICITY
GENERATION PRICES OF STANDARD SOLAR POWER PLANTS AND STANDARD WIND POWER PLANTS
No.
Item
Symbol
Parameter
I
Economic life
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Standard solar power plant
nMT
20 years
2
Standard wind power plant
nG
20 years
II
Operational parameters
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1
Standard distribution factor according to
the forecasted average electrical energy delivered by the standard wind power
plant of 75%
kpb,P75
0,674
III
Ratio of capital sources in the total
capital of a standard solar power plant or wind power plant (%)
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Ratio of loans
D
70%
2
Ratio of equity
E
30%
3
Ratio of loans in foreign currency
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80%
4
Ratio of loans in VND
DD
20%
IV
Average debt repayment period (year)
nD
10 years
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No.
Content
Symbol
Unit
I
Annually converted investment capital
VND
1
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SĐTMT,G
VND/kWp or VND/kW
2
Installed capacity
PMT, PG
kWp, kW
II
Economic life
nMT, nG
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III
Average electrical energy at delivery
point
Ebq
kWh
1
Operational parameters (for calculation of
average annual electrical energy delivered)
IV
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i
%
1
Ratio of loans in foreign currency
DF
%
2
Ratio of loans in VND
DD
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3
Interest rate of loans in foreign
currencies
rd,F
%
4
Interest rate of loans in VND
rd,D
%
3
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re
%
3.1
Ratio of post-tax profit to equity
re,pt
%
3.2
Average rate of corporate income tax during
economic life
t
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A
Average fixed price
FC
VND/kWh
Total fixed operation and maintenance cost
TCFOMC
VND
B
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FOMC
VND/kWh
C
Electricity generation price (A+B)
VND/kWh