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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.
07/2024/TT-BCT
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Hanoi, April 12,
2024
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CIRCULAR
METHODS FOR
DETERMINING PRICES FOR ELECTRICITY GENERATION AND POWER PURCHASE AGREEMENT
Pursuant to the Law on Electricity dated
December 3, 2004 and the Law on amendment to the Law on Electricity dated
November 20, 2012;
Pursuant to Decree 96/2022/ND-CP dated
November 29, 2022 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 elaborating the Law on Electricity and the
Law on amendments to the Law on Electricity;
At request of the Director of Electricity
Regulatory Authority of Vietnam;
The Minister of Industry and Trade
promulgates Circular on methods for determining prices for electricity
generation and power purchase agreement.
Chapter I
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Article 1. Scope and regulated entities
1. This Circular prescribes methods for
determining prices of electricity generation and power purchase agreement for
various power plant models.
2. This Circular applies to:
a) Power plants operating in territory of
the Socialist Republic of Vietnam and connected to national electricity system;
d) Other relevant organizations and
individuals.
3. Provisions pertaining to methods for
determining electricity generation prices under this Circular do not apply to:
strategic multi-purpose hydroelectricity plants, small-scale hydroelectricity
plants applying avoidable cost tariff, independent power plants invested in
built - operate - transfer (BOT) model, power plants and generator groups
providing auxiliary services; power plants applying electricity pricing
regulations under documents issued by competent authority.
4. Provisions pertaining to sample power
purchase agreement specified under Appendix 3 hereof do not apply to: strategic
multi-purpose hydroelectricity plants, small-scale hydroelectricity plants
applying avoidable cost tariff, independent power plants invested in built -
operate - transfer (BOT) model, power plants and generator groups providing
auxiliary services; power plants applying electricity pricing regulations under
documents issued by competent authority.
Provisions pertaining to sample power
purchase agreement under Appendix 3 hereof do not apply to solar power plants
and wind power plants unless said power plants participate in competitive
electricity market.
5. Power plants that lack electricity
pricing regulations stipulated by the Government, Prime Minister, or Ministry
of Industry and Trade shall conform to Article 9 hereof.
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In this Circular, the terms below are
construed as follows:
1. The Seller means an Electric
utility possessing a Power plant.
2. The Buyer means Vietnam
Electricity (or authorized representatives thereof), Northern Power
Corporation, Central Power Corporation, Southern Power Corporation, Hanoi City
Power Corporation, Ho Chi Minh City Power Corporation, major electricity users,
other electricity buyers according to regulations of electricity market.
3. Developer means organization and
individuals managing, using capital to invest in power plants, power lines and
electrical substations to serve power plants.
4. Connection costs means investment
and construction costs for power lines and electrical substations from
distribution yards of power plants to Connection point and distributed costs
relating to common power lines (if any).
5. Specific connection costs means
costs (or allocated costs) implemented by the Developer to build power lines
and electrical substations from distribution yards of a power plant or power
plants to distribute load towards connection points under assignment of
competent authority.
6. Connection point means a point
agreed upon under connection agreement between the Developer and grid manager
as per the law.
7. Delivered electricity means
electricity delivered from the Seller to the Buyer under electricity sale and
purchase between the Seller and the Buyer.
8. Electric utility means an
organization or individual that, pursuant to Vietnam’s domestic laws, possesses
power plant or power plants.
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10. Liquefied natural gas (LNG) storage,
regasification, and distribution agreement means an agreement between
Electric utility or fuel trading entity and LNG storage investment, management
entity for the purpose of storing, regasifying, distributing, and supplying gas
for power plants and is signed in a manner compliant with applicable laws with
competitive and transparent prices.
11. Power purchase agreement (PPA) means
an agreement that accommodates electricity sale and purchase of each power
plant.
12. Gas sale and purchase agreement
(GSPA) means an agreement between gas seller and mine owner for the
purchase and delivery of domestically produced natural gas to gas buyer which
is the power plant using the gas for electricity generation.
13. Fuel purchase agreement means an
agreement between the Electric utility and fuel trading entity for the supply
of fuel for power plants, is signed in accordance with applicable laws,
guarantees legitimate fuel sources and competitive, transparent prices.
14. Fuel transport agreement means
an agreement between Electric utility or fuel trading entity for the
transportation of fuel to power plants, is signed in accordance with applicable
laws, and guarantees competitive, transparent prices.
15. Base year means the year used in
total investment or total revised investment for the purpose of calculating
approved electricity generation prices.
16. New power plant means a power
plant that has not entered into initial PPA.
17. Net heat rate means amount of
thermal energy consumed to produced one kWh of electrical energy at delivery
point (BTU/kWh or kJ/kWh or kCal/kWh).
18. Total investment means total
investment of the project determined in accordance with applicable regulations
and law, fundamental design, and other contents of feasibility study of
construction project.
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20. Settled investment means all
legitimate costs incurred in investment process to bring projects into
operation. Legitimate costs mean costs within approved projects, design,
estimates; construction contracts signed in accordance with the laws; including
revision thereof approved in a manner compliant with the laws and by appropriate
eligibility; settled investment must be contained in total approved investment
(or revised) as per the law.
Chapter II
METHODS FOR DETERMINING ELECTRICITY
GENERATION PRICES
Section 1. METHODS FOR DETERMINING
ELECTRICITY GENERATION PRICES FOR NEW POWER PLANTS
Article 3. Rules for determining
electricity generation prices
1. Electricity generation prices of power
plants are developed on the basis of:
a) Legitimate, reasonable costs incurred by
Developed throughout economic life of the project;
b) Internal rate of return does not exceed
12%.
2. Electricity generation prices of power
plants consist of:
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b) Specific connection prices (if any): are
negotiated between the Seller and the Buyer and are determined in accordance
with Article 8 hereof.
3. Electricity generation prices do not
include VAT, water resource tax, licensing fees for water resource extraction,
forest environment service fees, environment protection fees in respect of
solid waste and industrial wastewater (in case of thermal power plants), other
taxes, fees, and monetary collectibles according to regulations of competent
authority (other than taxes, fees included in electricity generation
solutions).
4. Power purchase agreement price for
comparing with electricity generation price range in the base year:
a) PPA price must be within price range for
electricity generation in the base year of power plants issued by Minister of
Industry and Trade, in which, PPA price of power plants for comparing with
price range for electricity generation in the base year shall be calculated on
the basis of cost components corresponding to cost components serving
calculation of price range for electricity generation;
b) In case electricity generation price
range is not available in the base year of a power plant, PPA price of the
power plant shall be calculated on the basis of corresponding cost components
in order to compare with electricity generation price range of the latest year
applied to the power plant.
Article 4. Methods for determining PPA
prices in Base year of power plants
PPA prices of Base year PC
(VND/kWh) are determined using formula below:
PC = PCD
+ PBD
1. PCD (VND/kWh) means fixed
prices of the Base year and is determined using formula below:
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Where:
FC: Average fixed costs determined in
accordance with Article 5 hereof (VND/kWh);
FOMCb: Means fixed operating and
maintenance costs of Base year and is determined in accordance with Article 6
hereof (VND/kWh).
2. PBD (VND/kWh) means variable
costs of the Base year.
a) PBD of thermal power plants
is determined using formula below:
Where:
: Means variable cost components depending on
primary fuel costs of power plants in Base year and is determined in accordance
with Clause 1 Article 7 hereof (VND/kWh);
: Means variable cost components depending on
secondary fuel costs of power plants in Base year and is determined in
accordance with Clause 2 Article 7 hereof (VND/kWh);
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: Means transportation costs for primary fuel
for electricity generation in the Base year and is determined in accordance
with Clause 4 Article 7 hereof (VND/kWh).
b) In respect of hydroelectricity plants,
solar power plants, wind power plants: PBD equals 0.
3. Experimentation, test, commissioning
costs of power plants: Payment of experimentation, test, commissioning costs
prior to commercial operation date agreed upon by the Seller and the Buyer must
not be repeated in total approved investment of the projects.
Article 5. Methods for determining average
fixed costs of power plants
1. Average fixed costs of power plants (FC)
are determined on the basis of financial analysis of projects according to
Schedule 1 and Schedule 2 under Appendix II attached hereto. Input data serving
determination of average fixed costs (FC) of power plants are determined in
accordance with Clause 2 of this Article.
2. Primary input data used in determination
of average fixed costs (FC) of power plants:
a) Investment: Investment determined on the
basis of total investment (or total revised investment, settled investment)
effective as of the date on which electricity generation price negotiation is
conducted is used in calculation of electricity generation prices and includes
all costs incurred by the Seller up until connection points of power plants
which include: power plants; power plant infrastructures, wharfs; LNG import
ports and storage (where LNG is used by power plants), other relevant costs,
and costs allocated to the projects (if any);
Specific connection costs for calculation
of specific prices shall conform to Article 8 hereof.
b) Economic life: Conforms to Appendix I
attached hereto, unless competent authority issue documents approving economic
life of projects that is different from the economic life stipulated under this
Circular at which point said documents prevail (in years).
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AGN is calculated as follows:
Where:
ANM: Electrical production at
the outlet of power plants according to fundamental design effective as of the
date on which negotiation is conducted (kWh).
In case of thermal power plants, formula
below shall apply:
ANM = Pt
x Tmax
Pt: Means terminal capacity of generators
under approved design (kW);
Tmax: Means number of hours
operating at maximum capacity in multiple years of power plants.
ttd: Means percentage of
self-sufficient electricity and electricity loss from step-up transformers of
power plants and transmission lines to delivery points with national electrical
system (if any) agreed upon by the Seller and the Buyer, is determined in
accordance with approved fundamental design or technical dossiers of equipment
manufacturers (if any at the time of negotiation), and does not exceed value
defined under approved fundamental design (%) or conforms to documents of
competent authority (if any);
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In respect of power plants that lack Tmax
and/or Kcs under Appendix I attached hereto, these parameters shall
be agreed upon by the Seller and the Buyer;
Where AGN cannot be identified using
the aforementioned formula, the Seller and the Buyer shall determine in
accordance with fundamental design and technical design regarding delivery
points effective as of the date on which negotiation is conducted. Where AGN
cannot be determined even via approved technical design or fundamental design,
AGN shall then be determined by documents of competent authority. Where
AGN cannot be determined even via documents of competent authority,
AGN shall then be agreed upon by the Seller and the Buyer.
d) Duration of depreciation provision of
each group of primary fixed assets (year): Is determined by duration of
depreciation provision of each group of primary fixed assets under regulations
of the Ministry of Finance from time to time or documents of competent
authority allowing depreciation provision different from regulations of the
Ministry of Finance (if any).
dd) Percentage of equity, loan capital, and
investment phasing in total investment: Is determined depending on decisions
approving investment projects and actual capital mobilized for the projects at
the time of negotiation, compliant with regulations promulgated by competent
authority. Equity accounts for at least 15% of total investment.
e) Loan interest and loan repayment period
during operating period: Depending on loan agreements, documents, texts between
Developer and credit institutions, creditors.
Where total loan capital under all loan
agreements or other legitimate documents between Developer and credit
institutions is lower than total loan capital used in electricity price
calculation, the missing portion of loan capital during operating period shall
be negotiated by the Seller and the Buyer on the principles that minimum
repayment period is 10 years and in a manner compliant with regulations on loan
interests below:
- Interest of loans in foreign currency is
determined by secured overnight financing rate (SOFR) over a term of 180 days -
average of 36 consecutive months from the latest March, June, September, or
December of the negotiation year published by the FED (website:
www.newyorkfed.org) plus 3%/year;
- Interest of loans in VND is determined by
the average maturity interest of 12-month deposits made in VND for individual
customers of the first day of 60 months prior to the latest March, June,
September, or December of the negotiation year published by 4 commercial banks
(Vietcombank, VietinBank, BIDV, Agribank or lawful inheriting units thereof)
plus 3%/year.
g) Corporate income tax rates, other tax
and fees: Are determined in accordance with relevant laws.
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FOMCb (VND/kWh) is determined
using the formula below:
Where:
: Means operating and maintenance costs
depending on major repair costs and other costs in Base year and is determined
in accordance with Clause 1 of this Article (VND/kWh);
: Means operating and maintenance costs depending
on personnel costs in Base year and is determined in accordance with Clause 2
of this Article (VND/kWh).
1. Operating and maintenance costs
depending on major repair costs and other costs in Base year (VND/kWh) are determined using the
formula below:
Where:
TCscl: Is total major repair
costs and other costs in Base year and determined using formula below:
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Where:
VDTXD+TB: Means total
construction costs and equipment costs determined on the basis of total
investment under Point a Clause 2 Article 5 hereof (VND);
kscl: Means percentage of major
repair costs and other costs (%) of power plants agreed upon by the Seller and
the Buyer and does not exceed values defined under Appendix I attached hereto. Where
kscl under Appendix I attached hereto is not defined for power plants, kscl
shall be agreed upon by the Seller and the Buyer;
Ccdk: Means other costs relating
to dredging of navigable channel and infrastructure costs agreed upon by the
Seller and the Buyer (if any) (VND). Where data serving calculation of costs
for dredging navigable channels and infrastructure costs in Base year are not
available, the Seller and the Buyer shall negotiate and calculate the sum of
these costs at the time of negotiation including inflation towards the Base
year at a rate of 2,5%/year (VND);
AGN: Average electricity
generated over multiple years at delivery points between the Buyer and the
Seller and calculated according to Clause 2 Article 5 hereof (kWh).
2. Operating and maintenance costs
depending on personnel costs in Base year 
(VND/kWh) are determined using formula
below:
Where:
TCnc: Means total personnel
costs in Base year including costs for salaries, social insurance, health
insurance, unemployment insurance, union fees, and associated allowances (VND);
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- Where salaries serving calculation of
personnel costs of power plants equal regional minimum wages of the year in
which electricity prices are calculated: The rate of conversion to Base year is
determined by regional minimum wage;
- Where total personnel costs cannot be
identified via methods mentioned above, total personnel costs in Base year are
determined using formula below:
TCnc =VDTXD+TB
x knc
Where:
VDTXD+TB: Means total construction
costs and equipment costs determined on the basis of total investment under
Point a Clause 2 Article 5 hereof (VND);
knc: Means percentage of
personnel costs (%) of power plants agreed upon by the Seller and the Buyer and
does not exceed values under Appendix I attached hereto. Where knc
under Appendix I attached hereto is not defined for power plants, knc
shall be agreed upon by the Seller and the Buyer;
AGN: Average electricity
generated over multiple years at delivery points between the Buyer and the
Seller and calculated according to Clause 2 Article 5 hereof (kWh).
Article 7. Methods for determining variable
costs of thermal power plants
Variable costs of thermal power plants in
Base year PBD (VND/kWh) are determined using formula below:
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Where:
: Means variable cost components depending on
primary fuel costs of power plants in Base year and is determined in accordance
with Clause 1 of this Article (VND/kWh);
: Means variable cost components depending on
secondary fuel costs of power plants in Base year and is determined in
accordance with Clause 2 of this Article (VND/kWh);
: Means variable cost components depending on
other factors of power plants in Base year and is determined in accordance with
Clause 3 of this Article (VND/kWh);
: Means transportation costs for primary fuel
for electricity generation in the Base year and is determined in accordance
with Clause 4 of this Article (VND/kWh).
1. Variable cost components depending on
changes to primary fuel costs of power plants in Base year , are determined using formula
below:
Where:
: Means average net heat rate of power plants
using primary fuel agreed upon by the Seller and the Buyer, does not exceed
values defined under fundamental design/technical design corresponding to total
investment serving the calculation of electricity prices or specifications of
equipment manufacturers, and is calculated in a manner corresponding to load
under Appendix I attached hereto;
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2. Variable cost components depending on
changes to secondary fuel costs of power plants in Base year , are determined using formula
below:
Where:
: Means net heat rate of power plants using
secondary fuel agreed upon by the Seller and the Buyer (kg/kWh or kcal/kWh or
kJ/kWh or BTU/kWh);
: Means secondary fuel prices in Base year,
including costs for transportation to power plants and other costs as per the
law (excluding VAT) (VND/kg or VND/kcal or VND/kJ or VND/BTU).
3. Variable costs adjusted by other factors
of power plants in Base year 
are determined using the following formula:
Where:
Cvlp: Means total annual
auxiliary material cost of power plants determined based on quantity and unit
price of auxiliary materials used for electricity generation in the base year
(VND). If data required for the calculation of total annual auxiliary material
costs in the base year is insufficient, the costs components can be calculated
using data from a year with sufficient data and converted to the base year at a
rate of 2,5%/year;
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Ck: Means annual repair and
maintenance costs, including regular repair and maintenance costs based on
total investment and equipment costs of power plants. Percentage of regular
repair and maintenance costs are determined by the parties and do not exceed
values defined under Appendix I attached hereto. Where power plants are not
mentioned under Appendix I attached hereto, percentage of regular repair and
maintenance costs shall be agreed upon by the parties;
AGN: Average electricity
generated over multiple years at delivery points between the Buyer and the
Seller and calculated according to Point c Clause 2 Article 5 hereof (kWh).
4. Transportation costs for primary fuel of
power plants in Base year 
are determined using formula below:
Where:
: Means net heat rate of power plants defined
under Clause 1 of this Article;
: Means transportation costs for primary fuel
for electricity generation in Base year (excluding VAT), in VND/kcal or VND/kJ or
VND/BTU and are determined as follows:
- For coal-fired thermal power plants:
weighted mean of coal transport agreement or other written agreements;
- For thermal power plants using natural
gas: weighted mean of gas collection, transportation, distribution fees
approved by competent authority or set forth under transport agreements/written
agreements;
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- For waste-to-power and biomass power
plants: transportation costs for primary fuel for electricity generation agreed
upon by the parties depending on power plant conditions.
Where primary fuel costs 
already include transportation
costs for primary fuel, collection, transportation, distribution, storage,
regasification fees in fuel purchase agreements, transportation costs for
primary fuel 
shall equal
0.
Article 8. Methods for determining specific
connection prices
1. Specific connection prices (PDT)
shall serve to facilitate recovery of specific connection costs incurred by the
Developer or distributed and shall be negotiated with the Buyer on the basis of
investment, loan interests during operating period according to loan
agreements, administrative costs, operation costs, maintenance costs, and other
factors depending on agreement between the parties in order to allow Developer
of power plants to recover construction, management, operation, maintenance
costs as per the law. Unit of specific connection prices is VND/kWh or VND/kW
or VND/month.
2. Once specific connection costs are
settled, the parties shall re-evaluate specific connection prices in accordance
with Clause 1 of this Article.
3. Specific connection costs are considered
reasonable, legitimate costs and included in electricity purchase price in
calculation of average electricity retail pricing of EVN.
Article 9. Methods for determining
electricity generation and PPA prices of power plants that lack electricity
purchase pricing stipulated by the Government, Prime Minister, or Ministry of
Industry and Trade
Based on principles of determining
electricity generation prices under this Circular, the Buyer and the Seller shall
develop pricing plan for electricity generation and PPA in a manner appropriate
to situations of each power plant and request the Ministry of Industry and
Trade to approve.
Article 10. Temporary pricing
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Article 11. Methods for determining
electricity generation prices for solar power plants, wind power plants that
have entered into PPA with EVN and have not decided on an official electricity
generation prices
Solar power plants and wind power plants
that have entered into PPA with EVN before January 1 of 2021 and before
November 1 of 2021 respectively but have not met eligibility to adopt
electricity purchase prices under Clause 1 and Clause 3 Article 5 of Decision
No. 13/2020/QD-TTg dated April 6 of 2020 of the Prime Minister and Clause 7
Article 1 of Decision No. 39/2018/QD-TTg dated September 10 of 2018 of the Prime
Minister:
1. The parties shall rely on principles for
determining electricity generation prices under this Circular and develop
electricity generation pricing for power plants:
a) Base year of power plants undergoing
electricity generation price negotiation means the year of commercial operation
of power plants;
b) Where parts of power plants lack
electricity generation prices, said electricity generation prices shall be
determined by input data of the entire power plants.
2. Average annual delivered electricity is
determined as follows:
a) On the basis of fundamental design (or
technical design where fundamental design is not viable) appraised by competent
authority;
b) Where method detailed under Point a of
this Clause is not viable, both parties shall negotiate based on technical
specifications in fundamental design or technical design dossiers used in
notice on appraisal results of competent authority. Where annual delivered
electricity is determined by fundamental design, total investment based on
fundamental design shall be used; where annual delivered electricity is
determined by technical design, total investment based on corresponding
technical design shall be used.
3. Operating and maintenance costs of Base
year of power plants FOMCb are determined using formula below:
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Where:
TC: Means total operating and maintenance
costs of power plants and is determined by: TC = VDT x k
Where:
VDT: Means power plant investment (VND);
k: Means percentage of operating and maintenance
costs (%) of power plants agreed upon by the parties and not exceeding values
defined under Appendix attached to Circular No. 15/2022/TT-BCT dated October 3
of 2022 of Minister of Industry and Trade.
4. Other parameters serving calculation of
electricity generation prices shall be negotiated by the parties. Documents
serving PPA negotiation shall conform to Clause 1 Article 19 hereof.
Section. METHODS FOR DETERMINING
ELECTRICITY GENERATION PRICES OF POWER PLANTS IN COMMERCIAL OPERATION
Article 12. Methods for determining
electricity generation prices for power plants with expired PPA and unexpired
economic life
Where PPA of power plants (not applying
avoidable costs) have expired while economic life of the power plants has not
expired, the parties shall negotiate on electricity generation prices for
subsequent years until economic life of the power plants expires in a manner
that the average fixed costs do not change relative to prices negotiated by the
parties.
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1. Fixed costs of power plants with expired
economic life shall be determined in a manner that allows power plants to recover
electricity production costs and shall be determined over a period compliant
with major repair cycle of primary equipment and reasonable profits. Where
documents of competent authority approving period of calculating fixed costs,
said documents shall prevail.
2. Variable costs of power plants with
expired economic life shall be determined in accordance with Article 7 hereof.
3. Where economic life of power plants has
expired and power plant upgrade is implemented, both parties shall negotiate on
prices of PPA of power plants in accordance with Article 4, Article 5, Article
6, and Article 7 hereof and depreciation period of primary equipment subject to
the upgrade.
4. Term of contracts of power plants with
expired economic life shall be negotiated by the parties based on major repair
cycle of primary equipment.
Article 14. Methods for determining
electricity generation prices of hydroelectricity plants with effective PPA and
expired electricity generation prices or hydroelectricity plants applying avoidable
cost tariff with expired PPA
1. Electricity generation prices are
determined in a manner that allows power plants to recover investment (if any),
electricity production costs, and ensures reasonable profits.
2. Electricity generation prices are determined
for the remainder of economic life of the power plants.
3. Average electrical production is
determined on the basis of statistics collected from operating years prior to
the date on which electricity generation prices expire.
4. Operating and maintenance costs are
negotiated between the parties.
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Article 15. Methods for determining
electricity generation prices renegotiated based on settled investment
In respect of power plants undergoing
renegotiation of electricity generation prices based on settled investment
under Clause 2 Article 28 hereof:
1. Where settled investment is defined, the
Seller must send documents relevant to settled investment to the Buyer.
2. The parties shall re-negotiate
electricity prices as follows:
a) Methods for determining PPA prices
conform to Article 4 hereof;
b) Parameters serving calculation of PPA
prices conform to Article 4 hereof; input data are updated at the same time as
settled investment is determined;
c) PPA prices for comparison with
electricity generation price bracket do not exceed electricity generation price
bracket of the year in which settled investment is approved;
d) Electricity generation prices apply from
commercial operation date of power plants; annual fixed costs conform to
Article 16 hereof; annual fixed costs of years preceding the date on which the
parties enter into contracts on amendment to PPA depending on electricity
prices determined on the basis of settled investment;
dd) Base year of power plants negotiating
electricity price under settled investment is the year in which the settled
investment is approved.
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Article 16. Principles in determining
annual fixed costs of PPA
1. The parties have the right to apply
negotiated average fixed costs throughout contract years. Where the parties agree
to convert the negotiated average fixed costs to annual fixed costs, the
determination of these fixed costs must adhere to principles under Clause 2 of
this Article.
2. On the basis of practical loan capacity
and financial capacity of projects, both parties shall negotiate about average
fixed costs of power plants and convert to annual fixed costs (FCj:
fixed cost of year j) as long as average fixed cost does not change compared to
mutually agreed value and following principles are complied:
a) Financial discount rate when calculating
annual fixed costs agreed by both parties shall equal the IRR of power plants;
b) Projects developers shall return loans
for investment and construction of power plants according to deadline for
repaying loan capital
Article 17. Principles of adjusting annual
electricity generation prices in PPA
1. Components of operating and maintenance
costs of power plants shall be adjusted on the principles below:
a) Components of operating and maintenance
costs depending on major repair costs and other costs shall be adjusted by
average inflation rate under Appendix I attached hereto. Both parties shall
study and propose regulations on adjusting components of operating and
maintenance costs depending on major repair costs and other costs in regard to
items of a foreign currency origin;
b) Components of operating and maintenance
costs depending on personnel costs shall be adjusted by changes to regional
minimum wages at the time of payment or CPI published by General Statistics
Office of Vietnam up to 2,5%/year.
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Where:
m: Means number of foreign currency types
in electricity generation pricing agreed upon by the parties (type);
n: Means number of principal installments
of foreign currency i (installment);
Di,j: Means number of principal
loan in foreign currency i paid in installment j in year of calculation;
λi,j: Means conversion
rate in installment j of foreign currency i in the year (.../VND);
λi,b: Means conversion
rate of foreign currency i agreed upon by the parties in electricity generation
pricing (.../VND).
Article 18. Methods for determining PPA
prices of power plants at the time of payment
PPA prices of power plants at the time of
payment for electricity bill of month t, year j are PC,j t (VND/kWh)
and are determined using formula below:
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Where:
FCj: Means fixed costs of the year j
determined in accordance with Article 16 hereof (VND/kWh);
FOMCj,t: Means operating and
maintenance costs of month t, year j determined under Clause 1 of this Article
(VND/kWh);
: Means variable costs of month t and year j
determined in accordance with Clause 2 of this Article (VND/kWh).
1. Operating and maintenance costs of month
t and year j are determined using formula below:
Where:
: Means components of operating and
maintenance costs depending on major repair costs and other costs in year j
(VND/kWh);
: Means components of operating and
maintenance costs depending on personnel costs in month t and year j (VND/kWH).
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Where:
: Means operating and maintenance costs
depending on major repair costs and other costs in Base year determined in
accordance with Clause 1 Article 6 hereof;
i: Means inflation rate of components of
operating and maintenance costs depending on major repair costs and other costs
according to Appendix I attached hereto;
: Number of year of payment from Base year
(with Base year l =1).
b) Components of operating and maintenance
costs depending on personnel costs of month t and year j 
are determined as follows:
- Where salaries included in electricity
pricing equal regional minimum wages, components of operating and maintenance
costs depending on personnel costs are determined using formula below:
Where:
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Lmin,j,t: Means regional minimum
wages at the time of payment of month t and year j (VND/month);
Lmin,b: Means regional minimum
wage of Base year (VND/month).
- Where total personnel costs TCnc are
calculated based on percentage of investment in construction and equipment,
components of operating and maintenance costs depending on personnel costs are
determined using formula below (VND/kWh):
Where:
: Means operating and maintenance costs
depending on personnel costs of Base year determined in accordance with Clause
2 Article 6 hereof;
: Means inflation rate of components of
operating and maintenance costs depending on personnel costs determined by
ratio of CPI of the year (j-1) to that of the year (j-2) published by the General
Statistics Office of Vietnam in December of the year (j-1) and up to 2,5%/year;
: Means number of payment year from the Base
year (where Base year l = 1, i1 = 0).
2. Variable costs of thermal power plants
in month t and year j 
(VND/kWh)
are determined using formula below:
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Where:
: Means components of variable costs
depending on changes to primary fuel costs of power plants in month t and year
j determined in accordance with Point a of this Clause (VND/kWh);
: Means components of variable costs
depending on changes to secondary fuel costs of power plants in month t and
year j determined in accordance with Point b of this Clause (VND/kWh);
: Means components of variable costs
depending on other changes of power plants of year j determined in accordance
with Point c of this Clause (VND/kWh);
: Means transportation costs for primary fuel
of power plants in month t and year j determined in accordance with Point d of
this Clause (VND/kWh).
a) Components of variable costs depending
on changes to primary fuel costs of power plants in month t and year j 
determined using formula
below:
Where:
: Means average net heat rate determined in
accordance with Clause 1 Article 7 hereof;
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kHS: Means percentage of
capacity reduction in year j (%);
: Means number of year of commercial
operation of power plants;
: Means primary fuel costs for electricity
generation at the time of payment of month t and year j determined by weighted
mean of quantity of invoices under fuel purchase agreements in a period of time
negotiated by the parties.
b) Components of variable costs depending
on changes to secondary fuel costs of power plants in month t and year j 
determined using formula
below:
Where:
: Means components of variable costs
depending on changes to secondary fuel costs of power plants in Base year
determined under Clause 2 Article 7 hereof;
kHS: Means percentage of
capacity reduction in year j (%);
: Means number of year of commercial
operation of power plants;
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: Means secondary fuel costs for electricity
generation in Base year in Clause 2 Article 7 hereof.
c) Components of variable costs adjusted
according to other variations of power plants in the year j 
are determined using the following
formula:
Where:
: Means components of variable costs adjusted
by other variations of power plants in Base year determined under Clause 3
Article 7 hereof;
i: Means inflation rates of components of variable
costs depending other variations based on rates under Appendix I hereof;
kHS: Means percentage of
capacity reduction in year j (%);
: Means number of year of commercial
operation (from commercial operation date of power plants, the first commercial
operation year of power plants starts from the commercial operation date of the
first generator group, l = 1);
m: Means number of payment year starting
from Base year (in case of the base year, m = 1).
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Where:
: Means average net heat rate determined in
accordance with Clause 1 Article 7 hereof;
kHR: Means adjustable factor for
average net heat rate regarding actual operating conditions such as coolant
temperature, ambient temperature, humidity, load negotiated by the parties or
in actual operation from operation cycle to operation cycle (if any);
kHS: Means percentage of
capacity reduction in year j (%);
: Means number of year of commercial
operation of power plants;
: Means transportation costs for primary fuel
at the time of payment of month t and year j, determined by weighted mean of
quantity of invoices under fuel transport agreements and LNG storage
agreements, gas regasification and distribution contracts (if any) (VAT not
included), to be specific:
- For coal-fired thermal power plants:
weighted mean according to coal transport agreements;
- For thermal power plants using natural
gas: weighted mean of gas collection, transportation, and distribution fees
approved by competent authority;
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- For waste-to-power and biomass power
plants: transportation costs for primary fuel for electricity generation agreed
upon by the parties depending on power plant conditions.
Where fuel purchase agreements already
include transportation costs for primary fuel, components of respective
transportation costs for primary fuel 
equal 0.
3. Total activation costs in the month t of
power plants 
(VND),
are determined using formula below:
Where:
u: Means order of generator group of power
plants;
U: Means number of generator groups of
power plants;
f: Means type of fuel (where primary fuel
f= 1; secondary fuel f = 2);
s: Means activation status of generator
group;
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Pu,f,s: Means number of activation
of generator group u, using fuel f, at a state s in the month;
Mu,f,s: Means amount of coal
consumed (kg) for coal-fired thermal power or heat consumed (BTU) for gas
turbine per activation of generator group u, using fuel f, at a state s;
Du,f,s: Means unit price of fuel
required per activation of generator group u, using fuel f, at a state s, in
VND/kg for coal and VND/BTU for gas fuel;
: Means total other costs required per
activation, in VND.
Payment of activation costs of thermal
power plants shall conform to regulations of electricity market stipulated by
the Ministry of Industry and Trade.
For waste-to-energy and biomass power
plants, payment of activation costs shall be negotiated by the parties.
Section 4. DOCUMENTS SERVING NEGOTIATION OF
PPA
Article 19. Documents serving negotiation
of PPA between the parties
1. Documents proposing negotiation on PPA
for new power plants include but are not limited to:
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b) Written approval for investment
guidelines of Decision on investment guidelines or Certificate of investment
registration of projects;
c) Decision on construction investment and
presentation, appraisal reports for power plant investment projects produced by
independent advisors, and attachments.
d) Decision approving initial total
investment or revised total investment effective as of the date on which negotiation
on electricity generation prices and main contents of fundamental design of
investment projects relevant to PPA negotiation is conducted, appraisal reports
for fundamental design and written notice on appraisal results of fundamental
design, total investment issued by construction authorities as per the law (if
any);
dd) Negotiation on connection of power
plants to national electricity system and connection solution;
e) Loan agreements or documents, texts
between Developer and creditors, disbursement plan or recordings for all loan
capital;
g) Fuel supply contracts for power plants
indicating fuel price for electricity generation, fuel transportation costs,
LNG storage costs, gas regasification and distribution costs, and other fees,
fuel delivery points and fuel supply time limit;
h) Documents calculating loss of capacity
and electricity in transformers, power lines from step-up transfers to points
connected to national electrical system and documents calculating
self-sufficient electricity in power plants;
i) Documents calculating net heat rate in
case of thermal power plants;
k) Electricity pricing defined in
accordance with Section 1 and Section 3 of Chapter II hereof;
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2. Documents serving negotiation on PPA of
active power plants include but are not limited to:
a) Draft PPA using form under this
Circular;
b) Existing PPA;
c Technical dossiers of power plants,
technical specifications of SCADA/EMS, protective and automated relay system,
P-Q operational characteristics of generator groups thus far;
d) Fuel supply agreements;
dd) Electricity pricing of power plants
defined in accordance with Section 1, Section 2, and Section 3 Chapter II
hereof;
e) Financial statement of power plants of
recent years until the date on which negotiation on PPA is conducted.
Chapter III
EXAMINATION OF PPA
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1. Sample PPA under Appendix III attached
hereto serve as the basis for the parties to negotiate. Both parties have the right
to discuss and amend terms and clauses under PPA in a manner compliant with
Vietnam’s laws.
2. Language in use in the PPA shall be
Vietnamese. The parties may negotiate for addition of PPA in the English
language.
Article 21. Examination of PPA
Both parties shall negotiate and request
the Electricity Regulatory Authority of Vietnam to examine PPA following the
negotiation and appending confirmatory signature on PPA.
Chapter IV
IMPLEMENTATION
Article 22. Responsibilities of Electricity
Regulatory Authority of Vietnam
1. Examine and provide feedback regarding
PPA and amendments thereto.
2. Provide guidelines and resolve issues
that arise during PPA negotiation between the parties.
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Article 23. Responsibilities of EVN
Take charge and cooperate with the Buyer,
the Seller in calculating, unifying solutions for paying rate differences in
implementation of PPA in accordance with this Circular.
Article 24. Responsibilities of the Buyer
1. Negotiate and discuss with the Seller
regarding reallocation of Specific connection costs with Developer in respect
of power plants connected to power lines and electrical substations and revise
specific connection prices (if any) to allow the Seller to recover
construction, administrative, operation, and maintenance costs for power lines
and electrical substations as per the law.
2. Negotiate PPA with the Seller in
accordance with this Circular; ensure accountability, accuracy, legitimacy, and
adequacy of provided data and documents. Cooperate with the Seller in
requesting the Electricity Regulatory Authority of Vietnam to examine PPA as
per the law.
3. Cooperate with the Seller in
calculating, unifying rate differences in implementation of PPA in accordance
with this Circular and providing to EVN for consideration of payment solutions.
Article 25. Responsibilities of the Seller
1. Cooperate with the Seller in requesting
the Electricity Regulatory Authority of Vietnam to examine PPA as per the law;
ensure accountability, accuracy, legitimacy, and adequacy of provided data and
documents.
2. Produce investment projects for
construction of power lines and electrical substations to load production of
several power plants upon being assigned with construction investment by
competent authority in accordance with national electricity development
planning and provincial planning (if any). Power lines and electrical
substation must be able to operate, load electrical production of power plants
in the area in accordance with approved planning.
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4. Negotiate with Developers of power
plants regarding allocation of Specific connection costs and adjust specific
connection prices (if any) to allow Developers to recover construction,
administrative, operational, and maintenance costs of power lines and
electrical substations as per the law.
5. Manage, operate, and maintain power
lines, electrical substations to which they are assigned for investment and
construction as per the law.
6. Provide adequate information, ensure
accuracy, legitimacy, adequacy of data, documents provided to relevant entities
and authorities during negotiation and examination of PPA.
7. Select fuel providers, fuel transport
service providers and enter into fuel supply and transport agreements in a
manner compliant with Vietnam’s laws and ensuring equality, competitiveness,
and transparency.
8. Be held accountable to all input data
serving calculation of PPA prices and control fuel supply and transport
agreements in a manner that ensure fuel origin is legitimate, of competitive
prices, and transparent as per the law.
9. Cooperate with the Buyer in calculating
annual rate differences in implementation of PPA in accordance with this
Circular and requesting EVN to consider payment solutions.
Article 26. Responsibilities of fuel
providers and fuel service providers
1. For gas fuel
a) Domestic gas fuel providers and service
providers shall enter into GSPA, fuel supply agreements, gas transport
agreements (GTA) in accordance with relevant laws.
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- Where delivery occurs at ports of export:
Import price shall be gas prices applicable at delivery points at ports of
export;
- Where delivery occurs at Vietnamese gas
distribution stations or LNG ports, gas prices shall include purchase prices of
gases, import LNG and reasonable, legitimate costs relating to the import (if
any) such as import duties, financial expenses, insurance, profits, and other
costs pertaining to import activities of fuel providers.
2. For coal fuel
Select coal transport service providers and
enter into coal transport agreements in accordance with Vietnam's laws in a
manner that ensures equality, competitiveness, and transparency.
Article 27. Amendment to PPA in case of
amendment to policies, regulations promulgated by competent authority
1. Where policies and/or regulations
promulgated by competent authority are amended in a way that negatively affect
legitimate benefits of either party, the parties have the right to discuss and
re-negotiate electricity generation prices.
2. Where competent authority (inspection,
audit authority) conclude details pertaining to electricity generation prices
and/or PPA, the parties shall discuss and re-negotiate electricity generation
and PPA prices.
3. Where the Seller is assigned with
investment in upgrade and renovation of work items on power lines and
electrical substations according to planning, both parties have the right to
additionally discuss and negotiate for specific connection prices to allow Developers
of power plants to recover construction, administrative, operational, and
maintenance costs as per the law.
4. Where active power plants require
investment, renovation, and upgrade to meet national technical regulations on
environment, the parties shall negotiate in order to include these costs in
electricity generation prices of power plants. Calculation of electricity
generation prices shall conform to methods agreed upon by the parties under
signed PPA and be reported to Ministry of Industry and Trade.
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a) Scope of investment and operational
procedures of ash, slag handling structures are approved by competent
authority;
b) Entities for handling of ashes and slags
of power plants must be selected in a manner that adheres to regulations and
ensures competitiveness and transparency;
c) The parties shall settle ash and slag
handling costs in accordance with practical situations of the previous year. Revenues
generated by the sale of ashes and slags shall cover ash, slag handling costs
and reduce electricity generation prices of power plants.
Article 28. Transition clause
1. Where PPAs have been signed before the
effective date hereof, the parties shall continue to implement said PPAs until
termination thereof.
2. Where electricity projects have entered
into PPA in accordance with Circular No. 56/2014/TT-BCT, Circular No.
51/2015/TT-BCT and new electricity projects initiated before September 19 of
2017, the parties shall, when settled investment is available, request
re-calculation of electricity generation prices depending on approved settled
investment under Article 15 hereof.
3. Where power plants have entered into
PPAs, the parties have the right to negotiate and discuss amendment to PPAs in
accordance with this Circular.
4. For every phase of the electricity
market, the parties are responsible for revising and amending clauses under
PPAs accordingly.
Article 29. Entry into force
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2. Annul Article 2 of Circular No.
31/2022/TT-BCT dated November 8 of 2022 of the Minister of Industry and Trade
on amendment to Circular No. 57/2014/TT-BCT dated December 19 of 2014 of the
Minister of Industry and Trade on methods and procedures for developing,
promulgating electricity generation price range and Circular No. 57/2020/TT-BCT
dated December 31 of 2020 of the Minister of Industry and Trade on methods for
determining electricity generation price and power purchase agreement price.
3. Annul Circular No. 02/2023/TT-BCT dated
January 19 of 2023 of the Minister of Industry and Trade on annulment to
Circular No. 57/2020/TT-BCT dated December 31 of 2020 of the Minister of
Industry and Trade methods for determining electricity generation price and
power purchase agreement price.
4. Difficulties that arise during
implementation must be reported to Ministry of Industry and Trade./.
PP. MINISTER
DEPUTY MINISTER
Nguyen Sinh Nhat Tan
APPENDIX I
PARAMETERS USED IN
CALCULATION OF PPA PRICES
(Attached to Circular No. 07/2024/TT-BCT dated April 12 of 2024 of the
Minister of Industry and Trade)
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Entry
Parameters
I
Economic life
1
Coal-fired thermal power plant
30 years
2
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25 years
3
Hydroelectricity plant
3.1
Greater than 20 MW
40 years
3.2
From 3 MW to 20 MW
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3.3
Less than 3 MW
25 years
4
Solar power plant
20 years
5
Wind power plant
20 years
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Waste-to-energy plant
20 years
7
Biomass power plant
20 years
II
Percentage of operating and maintenance
costs of thermal power plant (%)
1
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1.1
Coal-fired thermal power plant
2,5%
1.2
Gas turbine combined cycle power plant
4,37%
1.3
Waste-to-energy plant
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2
Percentage of personnel costs (knc)
2.1
Coal-fired thermal power plant
1,5%
2.2
Gas turbine combined cycle power plant
1,9%
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Waste-to-energy plant
0,7%
III
Percentage of operating and maintenance
costs of hydroelectricity plant (%)
1
Percentage of major repair costs and
other costs (kscl)
1.1
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1,2%
1.2
Of a capacity scale from 151 MW to 300 MW
0,9%
1.3
Of a capacity scale of 301 MW or higher
0,6%
2
Percentage of personnel costs (knc)
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2.1
Of a capacity scale of 150 MW or lower
0,8%
2.2
Of a capacity scale from 151 MW to 300 MW
0,5%
3.3
Of a capacity scale of 301 MW or higher
0,3%
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Average number of hours operating at
maximum capacity in multiple years - Tmax (hours)
1
Coal-fired thermal power plant
6.500
2
Gas turbine combined cycle power plant
6.000
V
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1
Coal-fired thermal power plant
1,3%
2
Gas turbine combined cycle power plant
3%
VI
Percentage of annual repair and
maintenance costs (%)
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1
Coal-fired thermal power plant
0,8%
2
Gas turbine combined cycle power plant
0,8%
VII
Average inflation rate (%/year)
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Inflation rate of components of operating
and maintenance costs depending on major repair costs
2,5%/year
2
Inflation rate of price components
depending on other changes
2,5%/year
VIII
Average load of thermal power plant
85%
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PROJECT FINANCIAL
ANALYSIS FORMS
(Attached to Circular No. 07/2024/TT-BCT dated April 12 of 2024 of Minister
of Industry and Trade)
Schedule 1 - Business result estimates
Unit: ………………
No.
Entry
Year N
Year N+1
Year N+2
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I
Total income
1
Revenues generated by electricity sale
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2
Other benefits provided by the project
(if any)
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3
Subsidization (if any)
II
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1
Depreciation of fixed assets
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2
Operating and maintenance costs
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Other costs (if any)
4
Loan interests
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III
Pre-tax profits (I) - (II)
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IV
Corporate income tax
V
Post-tax profits (III) - (IV)
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Note: Revenues generated from electricity
sale do not include VAT, water resource tax, licensing fees for extraction of
water resources, forest environment fees, environmental protection fees in
regard to solid wastes/industrial wastewater (applicable to thermal power plants)
and other taxes (if any). Schedule 1 is produced from the year in which income
is generated.
Schedule 2 - Capital accumulation and
financial indicators
Unit: ………………
No.
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Year N-1
Year N
Year N+1
...
Total
I
Sources
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1
Revenues generated by electricity sale
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2
Other benefits provided by the project
(if any)
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3
Subsidization (if any)
4
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5
Recovered value of working capital
(calculated in the last year of the project)
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II
Usage
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1
Equity, loan capital (distributed by
project schedule)
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2
Other costs (if any)
3
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4
Loan interests
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5
Corporate income tax
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III
Capital accumulation (I) - (II)
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IV
Discount capital accumulation
V
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Note: Revenues generated from electricity
sale do not include VAT, water resource tax, licensing fees for extraction of
water resources, forest environment fees, environmental protection fees in
regard to solid wastes/industrial wastewater (applicable to thermal power
plants) and other taxes (if any). Schedule 2 is produced from the year in which
construction starts.
APPENDIX III
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SOCIALIST REPUBLIC
OF VIETNAM
Independence - Freedom - Happiness
----------------
POWER PURCHASE
AGREEMENT
...................................POWER
PLANT
Between
…………………… COMPANY
(THE SELLER)
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……………………… COMPANY
(THE BUYER)
AGREEMENT NO.
………./20.../HD-NMD-[name of Power plant]
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SOCIALIST REPUBLIC
OF VIETNAM
Independence - Freedom - Happiness
----------------
POWER PURCHASE
AGREEMENT
Pursuant to the Law on Electricity dated
December 3, 2004 and the Law on amendment to the Law on Electricity dated
November 20, 2012;
Pursuant to the Law on Commerce dated June
14 of 2005;
Pursuant to the Civil Code dated November
24 of 2015;
Pursuant to Decree No. 137/2013/ND-CP dated
October 21, 2013 of the Government elaborating the Law on Electricity and the
Law on amendments to the Law on Electricity;
Pursuant to Circular No. ………… of Minister
of Industry and Trade on operation of competitive electricity market; 1
Pursuant to Circular No. ………… of Minister
of Industry and Trade on methods for determining electricity generation and PPA
prices; 2
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As of ………………… (date) at ………………(location) .
The parties include:
The Seller:
_____________________________________________________
Address:
______________________________________________________
Phone:______________________________
Fax:___________________
Tax Identification
Number:________________________________________
Account:____________________________Bank________________
______________________________________________________________
Represented by:
______________________________________________
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The Buyer: (name of company)
Address: ______________________________________________________
Phone:______________________________
Fax:___________________
Tax Identification
Number:________________________________________
Account:____________________________Bank________________
______________________________________________________________
Represented by:
______________________________________________
Position:_________________________
authorized by ____________ under document No. _______________________ , issued
on__________________
Have reached an agreement regarding Power
purchase agreement for …………… Power Plant (name of power plant) as follows:
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For the purposes of this Agreement, the
following terms shall have the meanings hereby assigned to them:
1. The Seller means the
……………Company owning the Power plant.
2. The Buyer means ………………
3. Connection point means …………
4. System and market
operator means
………………………
5. National electrical
system means
………………
6. Primary metering
system means
………………..
7. Backup metering
system means
……………
8. Agreement means this Power
purchase agreement, including Appendices and amendments thereof.
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10. Fuel transport
agreement means an agreement between Electric utility or fuel trading
entity for the transportation of fuel to power plants, is signed in accordance
with applicable laws, and guarantees competitive, transparent prices.
11. Liquefied natural
gas (LNG) storage, regasification, and distribution agreement means an agreement
between Electric utility or fuel trading entity and LNG storage investment,
management entity for the purpose of storing, regasifying, distributing, and
supplying gas for power plants and is signed in a manner compliant with
applicable laws with competitive and transparent prices.
12. Dispatch order means order for
commanding, controlling mode of operation of electrical system in real time.
13. Day means a calendar
day.
14. Commercial
operation date of generator group is ……………
15. Commercial
operation date of Power plant is …………
(Where PPA is signed for power plant
groups, commercial operation date is decided for each power plant).
16. Power plant is …………
17. Technical
regulations and standards on electrical engineering mean …………
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19. Regulations on
competitive electricity market mean regulations on operation of
competitive electricity market by levels decided by competent authority.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 2. Agreement effectiveness and
effective period
1. Agreement effectiveness
The Agreement comes into force from the
date on which legitimate representatives of the parties official sign the
Agreement unless otherwise agreed.
2. Agreement effective period
Other than extension or termination of
Agreement term, effective period of the Agreement starts from the date on which
the Agreement enters into force until …… years inclusive after commercial
operation date of the Power plant.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 3. Electricity sale and purchase
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2. Agreement productivity: Conforms to
Appendix V of the Agreement.
3. Electricity payment: On a monthly
basis, the Buyer must pay the Seller in accordance with Appendix V hereof.
The parties shall negotiate and agree on
implementation of payments that arise as a result of dispute resolution in
accordance with Article 8 hereof.
(Where power plants cover fuel costs, the
parties have the right to negotiate and amend details accordingly).
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 4. Commitment
The parties hereby undertake:
1. Each party is legitimately established
to operate in accordance with Vietnamese laws, entitled to signing and
executing the Agreement, capable of conducting business activities, obtaining
assets and executing Agreement obligations.
2. The signing and execution of
Agreement of either party does not violate terms under regulation of the
respective party, regulations of the law, decisions and judgments of the courts
by which the party is regulated, and other contracts, agreements to which the
party is a signatory.
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4. The parties are not the defendants
in lawsuits filed in court or commercial arbitration or competent authority
where the result of said lawsuits may drastically affect financial capability
or the ability to fulfill the parties’ obligations under the Agreement or
affect value and effectiveness of the Agreement.
5. The parties undertake to fulfill
obligations and details under this Agreement.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 5. The Seller's obligations prior
to commercial operation date
1. Requirements pertaining to licenses
and written approval
a) The Seller must adhere to procedures in
order to obtain necessary licenses and written approval from competent
authority for the purpose of Power plant construction and operation; undertake
to comply with and maintain eligibility of those licenses as per the law within
effective period of the Agreement;
b) Within ……… days since the commercial
operation date of generator groups and of Power plant, the Seller must send
legitimate copies of documents mentioned under Section II of Appendix VII of
the Agreement to the Buyer.
2. Reports on project schedule
a) The Seller undertakes to meet project
schedule under Section I Appendix VII of the Agreement;
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3. Connection, test, and operation
….
4. Commercial operation date
….
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 6. Connection responsibility and
metering system
1. Connection responsibility
The Seller has the responsibility to: …
a) negotiate, invest, manage, operate
equipment for electricity connection, transmission, and delivery to the Buyer
through delivery points in accordance with regulations on electricity
transmission system promulgated by the Ministry of Industry and Trade, relevant
technical regulations and standards in electrical sector;
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2. Metering system
a) The Seller is responsible for investing,
installing, managing, operating, maintaining, and periodically inspecting
equipment of primary metering system and backup metering system in accordance
with Regulations on electricity metering of the Ministry of Industry and Trade.
Examination and inspection of metering equipment or verification of deviation of
metering equipment must be conducted by competent or authorized organizations. All
metering equipment must be sealed and lead-clamped following inspection;
b) Where necessary, a party has the right
to request additional inspection or irregular inspection of metering equipment
and system. The Seller is responsible for conducting examination, inspection at
request of the Buyer. Where deviation of metering equipment subject to
irregular examination and inspection exceeds the permissible limit, the Seller must
incur irregular examination and inspection costs. Where deviation of metering
equipment subject to irregular examination and inspection is within the
permissible limit, the requesting party must incur irregular examination and
inspection costs;
c) The Seller must send inspection or
examination record and deviation values of metering equipment to the Buyer. The
Seller must notify the Seller regarding the examination and inspection of
metering system in advance. The Buyer is responsible for assigning witness to
the examination, inspection, unsealing, sealing, and attachment of lead clamp
of electric meter;
d) Where deviation of metering equipment
exceeds the permissible limit set under Regulations on electricity metering of
the Ministry of Industry and Trade, the Seller is responsible for calibrating
or replacing the metering equipment. Where either party deems that metering
equipment is damaged and/or not functioning, the party must immediately notify
the other party and the Seller must examine and repair/replace said metering
equipment;
dd) Electrical production is determined in
accordance with Appendix II of the Agreement.
Where primary metering system is malfunctioning
or deviation of primary metering system is higher than the required accuracy
class, electrical production for sale and purchase between the parties during
the period in which primary metering system is malfunctioning or deviation of
primary metering system is higher than the required accuracy class shall be
calculated and adjusted on the basis of measurement results of backup metering
system of adequate accuracy class in order to determine electrical production
for payment purposes. In this case, deviation of backup metering devices is
converted to permissible deviation of primary metering equipment by deviation
conversion method or system deviation. Where backup metering system also
malfunctions or deviation of backup metering system also exceeds permissible
limit, electrical production for sale and purchase between the parties shall be
determined as follows:
(i) Where deviation of functioning primary
metering system exceeds the permissible limit, electrical production for sale
and purchase between the parties shall be determined by measurement reading of
primary metering system converted to electrical production equivalent to 0%
deviation on the basis that the highest deviation of metering equipment does
not qualify for accuracy class determined by testing entities and written
records or agreement between relevant parties;
(ii) Where primary metering system does not
function, both parties shall rely on the situation and actual deviation of
metering systems on the basis of records of inspecting entities and data
acknowledged by the parties to agree on methods for calculating and determining
electrical production that needs calibrating during period of inaccurate
metering. In case of failure to agree on methods for calculating and
determining electrical production that needs calibrating, the parties must
settle disputes in accordance with Article 13 hereof.
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d) Where metering equipment is burnt or
damaged, the Seller must replace or repair in the shortest amount of time
possible so that metering equipment functions and meets technical requirements.
Repaired or replacing equipment must be inspected as per the law before use.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 7. Dispatch and operation of Power
plant
1. The Seller is responsible for adhering
to regulations on dispatch and operation of Power plant in national electrical
system in accordance with Regulations on electricity transmission system,
Regulations on competitive electricity market, Procedures for national
electrical system dispatch of the Ministry of Industry and Trade, technical
regulations and standards on electrical sector, and other relevant documents. The
Seller must carry out maintenance and operate generator groups of Power plant
in accordance with technical characteristics under Appendix I and Appendix III
hereof.
2. The Seller must install, operate,
and carry out maintenance of equipment in order to synchronize Power plant with
national electrical system. The Seller must adhere to Regulations on
electricity transmission system of the Ministry of Industry and Trade,
technical regulations and standards on electrical sector, and other relevant
regulations when synchronizing Power plant with national electrical system.
3. Where operational method of national
electrical system poses risks to primary equipment of Power plant and/or causes
casualties to humans and equipment, the Seller has the right to isolate
generator groups from national electrical system.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 8. Billing and payment
1. Electricity billing and payment
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2. Disputes in payment
a) Where the Buyer disagrees with any or
all amounts payable in electricity bill, the Buyer must issue notice on amounts
specified in electricity bill and reasons for the disagreement before payment
deadline. The Buyer must settle amounts payable not subject to the dispute
before or at payment deadline;
b) Within …… days from the date on which
notice on the dispute amounts, the Seller must respond the Buyer in writing. Where
both parties disagree on the dispute amount, either party has the right to
settle the dispute in accordance with Article 13 of the Agreement. Where
disputes originate from information within payment listing of system and market
operator, the parties must settle disputes in accordance with regulations on
competitive electricity market of the Ministry of Industry and Trade.
c) Where a party does not file notice on
amounts payable subject to dispute within …… days from the date on which
invoice is issued, said party waives their right to file a complaint regarding
amounts payable in the issued invoice.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
3. Interest calculation
Interest is calculated for:
a) Monthly electricity payment arrears;
b) Amounts payable in accordance with
decision on dispute settlement under Article 13 of the Agreement;
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[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
4. Compensation
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 9. Events affecting Agreement
execution and actions
1. Events affecting the Buyer’s ability
to execute the Agreement
a) Events relating to dissolution,
bankruptcy of the Seller, including:
(i) The Seller is dissolved (unless the
Seller is consolidated or merged);
(ii) The Seller is incapable of settling
debts due;
(iv) The Seller is transferred to or
entirely merged with creditor’s company or merged for benefits of the creditor;
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b) The Seller violates obligations under
this Agreement and fails to rectify said violation within 90 days from the date
on which the Buyer issues a notice on said violation;
c) The Seller is suspended under decision
of competent authority.
2. Events affecting the Seller’s
ability to execute the Agreement
a) Events relating to dissolution,
bankruptcy of the Buyer, including:
(i) The Buyer is dissolved (unless the
Buyer is consolidated or merged);
(ii) The Buyer is incapable of settling
debts due;
(iii) The Buyer is transferred to or
entirely merged with creditor’s company or merged for benefits of the creditor;
(iv) The court issues decision on
initiation of bankruptcy procedures for the Buyer.
b) The Buyer violates obligations under
this Agreement and fails to rectify said violation within 90 days from the date
on which the Seller issues a notice on said violation;
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3. Actions
a) Where events affecting a party’s ability
to execute the Agreement, the affected party has the right to take actions
defined under Article 10 hereof against the affecting party;
b) Actions defined under this Agreement do
not cancel each other out and do not affect implementation of other actions.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 10. Termination
1. Bilateral termination
The parties have the right to negotiate in
writing to reach an early termination of the Agreement. Where power plants
participate in competitive electricity market in accordance with design of
electricity market, the parties have the right to negotiate early termination
of the agreement in accordance with documents of competent authority in order
to sign PPA under new regulations.
2. Unilateral termination
a) Where an event affecting Agreement
execution according to Point a and Point c of Clause 1; Point a and Point c
Clause 2 Article 9 of this Agreement occurs and lasts to an extent that it
affects a party to the Agreement, the affected party has the right to
unilaterally terminate the Agreement after 90 days from the date on which they
send a notice to the other party;
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c) Where an event affecting a party’s
ability to execute the Agreement in accordance with Point b Clause 1 and Point
b Clause 2 Article 9 hereof occurs, the affected party has the right to
unilaterally terminate the Agreement after 30 days from the date on which they
send the notice.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 11. Compensation
1. The defaulting party must compensate
the non-defaulting party for losses, damage, and costs incurred by the
non-defaulting party in the performance of their rights and obligations under
the Agreement. Damage calculation shall conform to the Civil Code.
2. Where compensation request is filed,
the compensated party must immediately notify the compensating party in writing
to identify the nature of the subject of compensation. The compensated party's
failure to send the notice in a timely fashion does not affect the compensating
party’s obligation to pay compensation unless such failure cause the
compensating party to incur damage.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 12. Exemption from liability for
violations
1. The defaulting party is exempt from
liabilities where:
a) An event eligible for liability
exemption agreed upon by the parties occurs;
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c) Violation of a party is committed as a
result of compliance with decision of competent authority which is unbeknownst
to both parties at the time of signing the Agreement;
d) A force majeure occurs
Force majeure means an event or situation
that is inevitable, beyond the control of a party, causes obstruction or delay
to the partial or total performance of obligation of the party even when
legitimate measures have been taken and includes but is not limited to:
i) Decision of the court or competent
authority negatively affects a party’s ability to perform their obligation
under the Agreement;
ii) Natural phenomena such as fire,
explosion, drought, flood, volcanic eruption, earthquake, landslide, high tide,
storm, tornado, typhoon, or similar events occur;
iii) Riot, strike, unrest, protest, conflicts,
activities of declared or undeclared war, terrorism, destruction, embargo,
quarantine, or similar events occur;
iv) Power plants or assets of the Seller
are nationalized, removed of ownership, or confiscated under decision of
competent authority;
v) The Seller is rejected from issuance of
necessary licensing, approving documents by competent authority despite having
complied with legal obligations relevant to the issuance of said licensing,
approving documents.
2. Notification and verification of
exemption from liability
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b) Where exemption from liability ends, the
violating party must immediately notify the other party; failure to notify the
non-violating party in a timely manner shall result in the violating party be
required to pay damages;
c) The violating party must prove their
eligibility for exemption from liability to the non-violating party.
3. Exemption from liability as a result
of force majeure, refusal of Agreement execution in case of force majeure
a) The party that violates the Agreement as
a result of force majeure is responsible for regularly providing reports on
implementation of measures for rectifying the force majeure or other
information at legitimate request of the non-violating party to the
non-violating party to prove the process of force majeure; informing the other
party about the time of termination of force majeure within 48 hours from the
moment in which force majeure ceases unless communication is lost;
b) The party affected by the force majeure
is only eligible for exemption from liability relating to their failure to
fulfill Agreement obligations in a timely manner as a result of the force
majeure after notifying and attempting to rectify in accordance with Point a of
this Clause;
c) In the event of a force majeure, where a
party is obstructed from perform Agreement obligations for at least 180 days,
either party has the right to unilaterally terminate the Agreement in
accordance with Point b Clause 2 Article 10 hereof.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 13. Dispute settlement
1. In case of dispute between parties
to the Agreement, the disputing party must inform the other party about details
of the dispute in writing. The parties are responsible for settling disputes
via negotiation within 60 days from the date on which the disputing party sends
the notice. In respect of disputes concerning fee payment, the parties must
negotiate within 15 days. The parties have the right to discuss the extension
of negotiation duration in writing.
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[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 14. Electrical sector restructuring
and transfer of rights and obligations
1. Electrical sector restructuring and
transfer of rights and obligations at the Buyer
The parties shall negotiate the situations
in which the Buyer must be restructured, reorganized, dissolved, or having
electricity purchase capacity phased out for the purpose of implementing plans
for remodeling electricity sector in all levels of competitive electricity
market in accordance with roadmap approved by the Prime Minister or later
amendments. Where competent authority issues decisions on reorganizing,
restructuring, or dissolving, the Buyer has the right to partially or entirely
transfer their rights and obligations under the Agreement without approval of
the Seller to inheriting entity or entities decided by competent authority and
such entities are responsible for executing legitimate rights and obligations
of the Buyer as per the law.
The Seller must issue documents approving
all transfer or authorizing implementation of rights and obligations under this
Agreement of the Buyer.
2. Transfer of rights and obligations
of the Seller
The Seller has the right to transfer their
rights and obligations under the Agreement to inheriting entity or entities
only when the Seller and the Buyer have agreed upon such transfer in writing in
advance. Such written agreement must not deny the transfer or authorization of
the Seller without reasons, unless the Seller is allowed to authorize or
transfer any or all their rights and obligations under the Agreement pertaining
to funding or other financial arrangement to Power plant without discussing
with the Buyer. This Agreement remains effective to warrant benefits and the
performance of obligations of inheriting entities, authorized entities,
transferred entities of the Seller.
3. Transition phase of competitive
electricity market
If competitive electricity market is
replaced by a different market model according to decision of competent
authority during effective period of the Agreement, the parties must negotiate
to amend or replace this Agreement in order to adhere to the new market model
as long as electricity generation prices for the parties do not change.
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Article 15. Storing documents and providing
information
1. Storing documents
The parties have the obligation to store
documents, data, instruments, or necessary information to determine veracity of
invoices, prices, or calculations under the Agreement or to determine whether
the parties have adhered to the Agreement.
2. Providing information
Each party is responsible for providing
data, documents, and necessary instruments within a reasonable extent to the
other party in order to determine veracity of invoices, fees, or other
calculations under the Agreement or to determine whether the parties have
adhered to the Agreement.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 16. Other costs
Each party is responsible for incurring
taxes and fees or debts that arise in the performance of the Agreement. The
parties undertake that this Agreement does not include electricity transmission
costs, electricity distribution costs, or other similar costs and each party is
responsible for incurring these costs as per the law.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
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1. Authorized representative
Authorized representatives of the Seller
and the Buyer in the Agreement are:
The Seller:
____________________________
____________________________
The Buyer:
____________________________
____________________________
2. Information exchange
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The Seller:
____________________________
____________________________
The Buyer:
____________________________
____________________________
b) Notices, invoices, or information
exchange sent via methods detailed under Point a of this Clause are deemed to
be delivered and received:
(i) When the delivery is made in case of
direct delivery;
(ii) When registered mail is signed in case
of delivery via registered mail;
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(iv) When the authority issue documents
confirming the receipt in case of delivery via regular mail.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 18. Confidentiality
Each party has the obligation to secure
information and documents provided by the other party under the Agreement and refrain
from disclosing or using such documents, information for purposes other than
the performance of the party under the Agreement, except when:
1. The information and documents are
disclosed or used as per the law.
2. The information and documents are
provided to competent authority at their request.
3. The information and documents do not
originate from parties to the Agreement.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
Article 19. Law applied and language of PPA
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Language in use in the PPA shall be
Vietnamese. The parties may negotiate for addition of PPA in the English
language.
Article 20. Other agreements
1. Agreement amendment
All amendments to the Agreement must be
discussed and agreed by the parties in writing.
2. Final Agreement
This Agreement is the final agreement
between the parties and replaces all discussion, communication, and exchanges
that take place prior to the signing of this Agreement.
3. Third party
This Agreement only serves benefits of the
Seller and the Buyer and does not create benefits or obligations of a third
party.
4. Individual responsibility
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5. Waive rights
A party’s waiver of their rights according
to the Agreement must be recorded in writing which must be signed by authorized
representative of the party. A party’s failure to exercise their rights in a
timely manner must not be construed as waiver of such rights.
6. Remaining obligation
The cancellation, termination, or expiry of
the Agreement does not constitute termination of remaining obligations of the parties
under the Agreement.
7. Severability
Where a part of the Agreement does not
adhere to the Law or is voided according to decision of competent authority,
other parts of the Agreement remain effective so long as such parts are
complete without the voided part.
[The parties have the right to negotiate
amendment in accordance with Vietnamese laws]
This Agreement shall be executed in 9
counterparts of equal value, 4 of which shall be held by each party. The Buyer
must send 1 counterpart to Electricity Regulatory Authority of Vietnam./.
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SELLER’S
REPRESENTATIVE
(Title)
(Seal and signature)
(Full name)
Appendix I
PRIMARY PARAMETERS
OF POWER PLANTS
(Attached to the
Agreement No. ____ , dated ____)
Including
descriptions, illustrations, and technical characteristics of Power plant
(Primary parameters of Power plant will be
re-verified after signing contracts for procurement of primary equipment of
Power plant.)
Appendix II
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(Attached to the
Agreement No. ____ , dated ____)
I. INSTALLATION LOCATION AND FUNCTION OF
METERING SYSTEM
1. Installation location of metering
system
2. Functions of metering system must conform
to Circular on electricity metering of the Ministry of Industry and Trade.
II. TECHNICAL REQUIREMENTS OF METERING
SYSTEM
Technical requirements of metering
equipment, metering circuits, lead sealing measures, and meter data collection
and reading system must conform to regulations on electricity metering
published by the Ministry of Industry and Trade.
III. METERING LOCATION
The parties hereby agree to use the
following metering locations:
Primary metering location:
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Backup metering location 2:
Metering location serving electricity
market operation and data reconciliation:
IV. METHODS FOR DETERMINING DELIVERED
ELECTRICAL PRODUCTION
1. Delivered electrical production
a) Electrical production for which the
Seller is paid in the month is calculated using formula:
AG =
AG: Electrical production for which the
Buyer pays the Seller in the month, (kWh).
b) Electrical production which the Seller
receives from national electrical system in the month is calculated using
formula:
AN =
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AN: Electrical production received from
grid via metering points in the month (kWh).
2. During period of competitive
electricity market, monthly delivery of electricity must conform to regulations
on electricity metering in competitive electricity market promulgated by the
Ministry of Industry and Trade.
Appendix III
AGREEMENT ON
OPERATIONAL CHARACTERISTICS
(Attached to the
Agreement No. ____ , dated ____)
Appendix IV
AGREEMENT ON
SCADA/EMS, COMMUNICATION, PROTECTIVE RELAY AND AUTOMATED SYSTEMS
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Appendix V
ELECTRICITY SALE
AND PURCHASE PRICES, ELECTRICITY PAYMENT
(Attached to the
Agreement No. ____ , dated ____)
I. ELECTRICITY GENERATION PRICES
1. PPA prices
PPA prices of power plants at the time of
payment for electricity bill of month t, year j are PC,j t (VND/kWh)
and are determined using formula below:
Where:
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FOMCj,t: Means operating and
maintenance costs of month t, year j (VND/kWh);
: Means variable costs of month t, year j
(VND/kWh).
of hydroelectricity, wind power, solar power
plants equals 0.
1.1. Fixed costs:
Average fixed costs (not including VAT) are
…… (VND/kWh);
Annual fixed costs FCi (VND/kWh)
from commercial operation date until expiry of economic life of power plant
(not including VAT) conform to schedule below:
Year number
1
2
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Fixed costs (VND/kWh)
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1.2. Operating and maintenance costs:
Operating and maintenance costs of month t
and year j are determined using formula below:
Where:
: Means components of operating and
maintenance costs depending on major repair costs and other costs in year j
(VND/kWh);
: Means components of operating and
maintenance costs depending on personnel costs in month t and year j (VND/kWH).
a) Components of operating and maintenance
costs depending on major repair costs and other costs of year j (VND/kWh) are determined using
formula below:
Where:
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i: Means inflation rate of components of
operating and maintenance costs depending on major repair costs and other costs
according to this Circular;
: Means number of
year of payment from Base year (with Base year l =1).
b) Components of operating and maintenance
costs depending on personnel costs of month t and year j 
(VND/kWh) are determined using formula
below:
- Where salaries included in calculation
of electricity pricing equal regional minimum wages:
Where:
: Means components of operating and
maintenance costs depending on personnel costs of Base year of …… (VND/kWh);
Lmin,j,t: Means regional minimum
wages at the time of payment of month t and year j (VND/month);
Lmin,b: Means regional minimum
wage of Base year of …… (VND/month).
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Where:
: Means components of operating and
maintenance costs depending on personnel costs of Base year (VND/kWh);
: Means inflation rate of components of
operating and maintenance costs depending on personnel costs determined by
ratio of CPI of the year (j-1) to that of the year (j-2) published by the
General Statistics Office of Vietnam in December of the year (j-1) and up to
2,5%/year;
: Number of payment
year since the Base year (with Base year l =1, i1=0).
1.3. Variable costs:
Variable process of month t and year j (VND/kWh) are determined
using formula below:
Where:
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: Means components of variable costs
depending on changes to secondary fuel costs of power plant in month t, year j
(VND/kWh);
: Means components of variable costs
adjusted by other variations of power plants of year j (VND/kWh);
: Means transportation costs for primary
fuel of power plant in month t, year j (VND/kWh).
a) Components of variable costs depending
on changes of primary fuel costs:
Components of variable costs depending on
changes to primary fuel costs of power plant in month t year j 
(VND/kWh) are determined using
formula below:
Where:
: Means average heat rate (HHV) of …………
kcal/kWh or kJ/kWh or BTU/kWh;
: means primary fuel costs of payment
period calculated using weighted mean of quantity of invoices under PPA in the
last …… months (not including VAT);
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kHR: Means adjustable factor for
average net heat rate regarding actual operating conditions such as coolant
temperature, ambient temperature, humidity, load negotiated by the parties or
in actual operation from operation cycle to operation cycle;
kHS: Means percentage of
capacity reduction in year j (%);
: Means number of
commercial operation years which is rounded down from the commercial operation
date of power plant.
b) Components of variable costs depending
on changes to secondary fuel costs:
Components of variable costs depending on
changes to secondary fuel costs of power plant in month t year j (VND/kWh) are determined using
formula below:
Where:
: Means components of variable costs
depending on changes to secondary fuel costs of power plant in Base year of ……
(VND/kWh);
kHS: Means percentage of
capacity reduction in year j (%);
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: Means secondary fuel costs for
electricity generation including costs for transporting fuel to power plants at
the time of payment of month t and year j …… (VND/kg);
: Means secondary fuel costs for
electricity generation in Base year of …… (VND/kg).
c) Components of variable costs depending
on other variations:
Components of variable costs depending on
other changes of power plant in year j 
(VND/kWh) are determined using formula
below:
Where:
: Components of variable costs depending on
other changes of power plants in Base year of … (VND/kWh);
kHS: Means percentage of
capacity reduction in year j (%);
: Means number of
commercial operation years of power plant (from commercial operation date of
power plant where the first commercial operation year starting from the first
commercial operation date of the first generator group, l = 1);
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i: Inflation rates of components of
variable costs depending on other changes according to this Circular.
d) Transportation costs for primary fuel:
Transportation costs of primary fuel of
power plant in month t of year j 
(VND/kWh) are determined using formula
below:
Where:
: Means average heat rate (HHV) of …………
kcal/kWh or kJ/kWh or BTU/kWh.
kHR: Means adjustable factor for
average net heat rate regarding actual operating conditions such as coolant
temperature, ambient temperature, humidity, load negotiated by the parties or
in actual operation from operation cycle to operation cycle;
kHS: Means percentage of
capacity reduction in year j (%);
: Means number of
year of commercial operation of power plants;
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Where components of transport, LNG storage,
gas regasification and distribution costs cannot be separated in fuel sale and
purchase agreements, primary fuel costs shall include transportation costs for
primary fuel. In this case, transportation costs for primary fuel equals 0.
Where primary fuel is not delivered to
power plant in the payment month, transportation costs for primary fuel equal transportation
costs for primary fuel of the latest ……… month(s) where primary fuel delivery
is made;
Select fuel providers, fuel transport
service providers and enter into fuel supply and transport agreements in a
manner compliant with Vietnam’s laws and ensuring equality, competitiveness,
and transparency.
2. Specific prices:
Specific connection prices PDT
(not including VAT) are …… VND/kWh or VND/kW or VND/month.
Slag and ash treatment prices PTX
(not including VAT) are …… VND/kWh.
II. ELECTRICAL PRODUCTION UNDER AGREEMENT
1. Average electrical production in
multiple years [at delivery points of power plan] within the term of the Agreement
of the Power plant is … (million kWh).
2. Annual and monthly contractual
production shall be verified and signed by the parties in accordance with
regulation on competitive electricity market.
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III.1. Before commercial operation date
In case of test run and commissioning costs
before commercial operations: the parties shall negotiate in accordance with
Article 4 of this Circular.
IIII.2. After commercial operation date
1. Where power plant has not participated
in competitive electricity market or has indirectly participated in competitive
electricity market with periods of non-participation according to decision of
competent authority or market intervention:
Electricity payment (Rtt) of
power plant is calculated as follows:
Rtt = Rt
x (1 + VAT)
Where:
Rt: Means electricity payment of
month t and year j and does not include VAT (VND);
Rt
= (PC,j,t x Qm,j,t
+ Rk + Rđt + RTh)
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Qm,j,t : Means electrical
production at delivery points of power plant (kWh);
Rk: Other costs (VND),
including:
Costs paid for generator groups serving
test depending on test schedule approved by System and market operators,
determined by: (i) Electrical production measured from test generator group
throughout duration of the test and (ii) Variable costs defined under Section I
of this Appendix;
Adjustable payments (if any) (VND);
Other costs negotiated by the parties.
Rdt: Means total specific costs
payable according the Agreement determined by specific connection prices (PDT)
and slag and ash treatment costs (PTX) according to Section I of
this Appendix (VND).
RTh: Means total taxes, fees,
amounts payable in the month in accordance with relevant law provisions agreed
between the parties (and legitimate instruments) (VND);
VAT: Means value-added tax according to
regulations of the Government (%).
Where the Power plant is subject to
multiple Agreements between the Seller and the Buyers, amounts payable Rt (not
including VAT) shall be determined and distributed by the Seller to the Buyers
according to delivered electrical production in the month (billing cycle)
published by System and market operator.
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2. Where Power plant has officially
participated competitive electricity market
2.1. Difference in total amounts payable
under Agreement in month t is determined using formula below:
Where:
: Means difference in total amounts payable
under Agreement in month t (VND) not including VAT;
D: Means total number of days in month t;
d: Means number of trading days in month t;
l: Means total number of billing cycle of
trading days d;
i: Means billing cycle i of trading days d;
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FMPd,i: Means full market price
applied to Electric utility in billing cycle i, day d in month t (VND/kWh);
: Means contractual production in billing
cycle i, day d in month t (kWh).
2.2. Total amounts payable under the
Agreement include:
a) Interest of late payment according to
Article 8 of the Agreement;
b) Variable amounts payable (if any);
c) Other costs negotiated by the parties.
2.3. Other amounts payable of Power plant
[entering into PPA with the Buyer] are determined as follows:
a) Difference in electrical production
between electrical production measured in the month and electrical production
measured in billing cycles in the month according to regulation on competitive
electricity market conforms to rate defined under PPA PC,i,t defined
under Section I of this Appendix;
b) Where thermal power generator groups or
1 boiler must be suspended to reduce capacity in accordance with regulation on
competitive electricity market:
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Activation costs corresponding to
activation costs are negotiated by the parties from ingredients, auxiliary
materials, etc. as follows [……].
c) Where Power plant contains test
generator groups appropriate to test schedule approved by System and market
operator, amounts payable for electrical production produced by Power plant
according to regulation on competitive electricity production are determined as
follows:
- Test generator groups: Using
variable costs under Section I Appendix V of the Agreement;
- Non-test generator groups: Using PPA
prices under Section I Appendix V of the Agreement.
d) Where Power plant contains generator
groups participating in approved AGC test or other test at request of System
and market operator: Amounts payable corresponding to electrical production
according to regulation on competitive electricity market are determined by PPA
prices under Section I Appendix V of the Agreement;
dd) Other amounts payable according to
regulation on competitive electricity market.
Other amounts payable according to
regulation competitive electricity market under section 2.3 are allocated to
the Buyers by the Seller depending on electrical production delivered in the
month (billing cycle) published by the System and market operator.
2.4. Total specific costs payable according
the Agreement are determined by specific connection prices (PDT) and
slag and ash treatment costs (PTX) according to Section I of this
Appendix (VND).
Total specific costs pay able under section
2.4 are calculated and allocated to the Buyers by the Seller depending on
proportion of electrical production delivered in the month (billing cycle)
published by the System and market operator.
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Rtt = (RTT,t + RC,t + RC,k,HD + RC,k,TT + Rđt
+ RTh) x (1+VAT)
Where:
RTT,t: Means total market payment
according to monthly payment schedule provided by System and market operator
(VND);
RC,t: Means total difference in
electricity payment under Agreement in month t (VND) determined by Clause 2.1
of this Section (VND);
RC,k,HD: Means total other
amounts payable according to the Agreement (VND) determined by Clause 2.2 of
this Section;
RC,k,TT: Means total other
electricity payments according to regulations on competitive electricity market
(VND) determined by Clause 2.3 of this Section;
Rdt: Means total specific costs payable in
the month according to the Agreement determined by Clause 2.4 of this Section
(VND);
RTh: Means total taxes, fees,
and amounts payable in the month in accordance with relevant law provisions
calculated and allocated to the Buyers by the Seller depending on proportion of
electrical production delivered in the month (legitimate instruments attached)
(VND);
VAT: Means value-added tax determined by
regulations of the Government (%).
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2.6. Difference in FED rates: On an annual
basis, depending on total loans in foreign currency, repayment plan for loans
in foreign currency, actual principal repaid, conversion rate agreed by the
parties in electricity generation pricing, and conversion rate of the previous
year, the parties shall calculate the difference in conversion rates.
Difference in FED rates (VND) is calculated
using the formula below:
Where:
m: Means number of foreign currency types
in electricity generation pricing agreed upon by the parties (type);
n: Means number of principal installments
of foreign currency i (installment);
Di,j: Means number of principal
loan in foreign currency i paid in installment j in year of calculation;
λi,j: Means conversion rate in
installment j of foreign currency i in the year (.../VND);
λi,b: Means conversion rate of
foreign currency i agreed upon by the parties in electricity generation pricing
(.../VND);
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Appendix VI
PRIMARY PARAMETERS
IN CALCULATION OF ELECTRICITY GENERATION PRICES
(Attached to the
Agreement No. ____ , dated ____)
Appendix VII
PROJECT SCHEDULE
(Attached to the
Agreement No. ____ , dated ____)
I. PROJECT SCHEDULE
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[...]
2. Initial date of interconnect test:
[...]
3. Date of initial circuit closing:
[...]
4. Date of test:
[...]
5. Commercial operation date of
generator group i:
[...]
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[...]
II. DOCUMENTS PROVIDED TO THE BUYER BY THE
SELLER
The Seller must provide legitimate copies
of the following documents to the Buyer to acknowledge commercial operation
date: …
1 Các bên hiệu chỉnh theo tên văn bản có hiệu lực tại thời điểm ký Hợp đồng
2 Các bên hiệu chỉnh theo tên văn bản có hiệu lực tại thời điểm ký Hợp đồng