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THE
PRIME MINISTER
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SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No: 24/2014/QD-TTg
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Hanoi, March 24,
2014
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DECISION
ON
SUPPORT MECHANISM FOR DEVELOPMENT OF BIOMASS POWER PROJECTS IN VIETNAM
Pursuant to the Law on Organization of the
Government dated December 25, 2001;
Pursuant to the Law on Electricity dated
December 03, 2004, the Law on amendment, supplementation of a number of
articles of the Law on Electricity dated November 20, 2012;
Pursuant to the Law on Investment dated November
29, 2005;
Pursuant to the Law on Construction dated
November 26, 2003;
At the proposal of the Minister of Industry and
Trade,
The Prime Minister promulgates Decision on
support development mechanism for biomass power projects in Vietnam.
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GENERAL PROVISIONS
Article 1. Scope of regulation
and subjects of application
1. This Decision provides support mechanism for
development of projects generating power by biomass energy in Vietnam.
2. Subjects of application of this Decision include
organizations, individuals participating in power activities which are related
to development of biomass power projects in Vietnam.
Article 2. Interpretation of
terms
In this Decision, the following terms are construed
as follows:
1. The electricity buyer is the Electricity of
Vietnam or its authorized member unit (for grid connection projects).
2. The electricity sellers are organizations,
individuals having licenses on electricity activities in power generation sector
from electricity plants that use biomass energy.
3. Biomass energy used for production of
electricity includes: By-products, waste in agricultural production,
agricultural and forestry processing and other types of plants which may be
used as fuel for electricity production.
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5. Grid-connected biomass power projects are
biomass power plant projects built and connected to the national power grid for
supply of a part or entire power for production to the national power grid.
6. Connection point is the position that the
electric line of the electricity Seller connected with the electric system of
the electricity Buyer.
7. Electricity delivery and receipt point is the
location where the metering equipment located as agreed in the electricity sale
and purchase contract in order to determine electricity output sold out of the
electricity Seller.
8. Non-grid connected biomass power projects are
biomass power plant projects built to supply entire power to households in
areas, and not connected with the national power grid.
9. The model contract of electricity sale and
purchase for grid-connected biomass power projects is the contract for electricity
sale and purchase issued by the Ministry of Trade and Industry to be as a basis
for application in transactions of sale and purchase of electricity generated
from grid-connected biomass power projects between electricity sellers and
electricity buyers.
10. Avoidable expense of the national power system
is the expense for production of one (01) kWh of a combination of
thermo-electrical machine using imported coals in the national power system;
this expense is avoidable if the Buyer buys one (01) kWh from a power plant
that uses alternative biomass energy.
11. Price list of avoidable expense being applied
to biomass power projects is the price list calculated based on avoidable
expenses of the national power system when one (01) kWh of electricity generated
from a power plant using biomass energy is generated to the national power
system.
12. Main items of a biomass power plant project
include boiler, turbine, power generator and substation.
13. The power project
of electricity-heat co-generation is the biomass power project which
simultaneously provides both heat and electricity.
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PLANNING AND DEVELOPMENT
OF BIOMASS ELECTRICITY
Article 3. Planning and
development of biomass electricity
1. The planning for development of biomass power is
one of contents of the planning for development and use of biomass energy. The
planning for development and use of biomass energy includes the planning for
development and use of national biomass energy, the planning for development
and use of provincial-level biomass energy. The planning for development and
use of biomass energy will be a basis for activities of investment, development
and use of biomass energy resources, adjusted in accordance with researches,
assessments on potentials of biomass energy in each period.
2. The planning for development and use of national
biomass energy and the development and use of provincial-level biomass energy
is established once for a period by 2020, with a vision till 2030 and is
amended or supplemented as necessary. From planning
stages afterwards, the planning for development of biomass power is integrated
into the Planning for development of provincial-level electricity and the
Planning for development of national power.
Article 4. Elaboration,
appraisal, approval and notification of the Planning for development and use of
biomass energy
1. The Ministry of Trade and Industry will organize
the planning for development and use of national biomass energy and submit to
the Prime Minister for approval; announce and instruct, monitor and check the
implementation of the approved planning for development and use of biomass
energy.
2. People's Committees of provinces and
centrally-run cities (below collectively referred to as provincial-level
People's Committees) will organize the Planning for development and use of
provincial-level biomass energy and submit to the Minister of Industry and
Trade for approval.
3. The announcement and adjustment of the planning
will be conducted in accordance with prevailing provisions.
Article 5. Expenses for the
elaboration, appraisal, approval and announcement of the Planning for
development and use of biomass energy
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2. It is encouraged to mobilize other lawful
financial sources for building the Planning for development and use of biomass
energy.
Article 6. Investment for
construction of grid-connected biomass power projects
1. The investment for construction of biomass power
projects must be complied with the Planning for development and use of biomass
energy and the planning for development of electricity approved by competent
state agencies.
2. For biomass power projects which are not listed
in the planning for development and use of national biomass energy and the
planning for development of national power approved, investors will be
responsible for setting up Dossiers for supplementation of the planning and send
to the Ministry of Industry and Trade for appraisal, submit to the Prime
Minister for consideration and decision.
3. While the Planning for development and use of
biomass energy is not approved yet, the investment in biomass power projects
must be approved by the Prime Minister.
4. Investment in construction of biomass power
projects will be conducted in accordance with legal provisions on construction,
fire prevention and protection, environmental protection and other relevant
provisions.
Article 7. Integration of
biomass power projects into the power system, moderate operation of biomass
power plants
1. Integration of biomass power projects into the
national power grid must comply with the approved planning for development of
electricity. The connection point is agreed by the electricity Seller and the
electricity Buyer based on the principle that the electricity Seller is
responsible for investment of electricity transmission lines to the connection
point integrated into the nearest national power grid according to the
provincial-level planning for development of electricity. In case that the
connection point of the national power grid has not existed yet in the planning
for development of electricity, the investor needs to reach agreements with the
electricity distribution unit or the electricity transmission unit as basis for
implementation of supplementation for the planning for development of
provincial-level electricity in accordance with prevailing provisions. In case
where it is unable to reach an agreement on a connection point, the electricity
Seller is responsible for submitting to the Ministry of Industry and Trade for
consideration and decision.
2. The investor of the biomass power project will
be responsible for investment, operation and maintenance of electricity lines
and boost substation (if any) from the power plant of the electricity Seller to
the connection point according to agreement with the electricity Buyer.
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4. After completing investment and pre-acceptance
test for commercial operation, units that harmonize electricity system and
operate electricity market will be responsible for mobilizing biomass power
plant in the principle that give priority to exploit entire output capacity and
generated power in compliance with the supply ability of biomass energy of the
plant.
Article 8. Conditions for
beginning construction of a biomass power works
Investor will only permitted to begin construction
of a grid-connected biomass power works, in addition to conditions provided in
Article 72 of the Law on Construction and relevant legal normative documents,
it is additionally required to have: The investment certificate, the acceptance
of buying electricity of the electricity Buyer; the agreement on electricity
integration with the electricity distribution unit or the electricity
transmission unit (for grid-connected biomass power projects); opinion of
competent state agencies on the design in accordance with legal provisions on
management of investment and construction of projects.
Article 9. Termination of
project implementation
Within 12 months since the issuing date of the
Investment Certificate, if the Investor does not build main items of the
project or maximum of 24 months since the date of operation commitment stated
in the Investment Certificate, if the biomass power project has not been put
into operation, the provincial-level People’s Committee will be responsible for
consideration and withdrawal of the Investment Certificate as prescribed,
reports to competent state agencies for handing over the project to other
investor for implementation. Unless investor has plausible reasons and the
competent state agencies accepted the suspension or postponement of the project
implementation schedule.
Article 10. Report regime for
project implementation
1. Within 5 working days since the issuing date of
the Investment Certificate, the investor will be responsible for sending an
authenticated duplicate of the Investment Certificate to the Ministry of
Industry and Trade for supervision and management.
2. During the construction of the biomass power
project, before the 15th of first month of a quarter, the investor
must send a report on the status quo of deployment of project implementation of
previous quarter and implementation plan for next quarter. Every year, before
January 15, the Investor must send a report on status quo of deployment of
project implementation of the previous year and deployment plan for next year
to the provincial-level People’s Committee, Ministry of Industry and Trade for
management, compilation, supervision of implementation and to the electricity Buyer
for coordination in implementation.
Chapter III.
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Article 11. Obligations of
buying electricity from grid-connected biomass power projects
1. The electricity buyers will be responsible for
buying entire electricity produced from grid-connected biomass generation
plants within their managed areas.
2. The sale and purchase of electricity will be
conducted via electricity sale and purchase contracts set in accordance with
the model electricity sale and purchase contract applicable to grid-connected
power projects issued by the Ministry of Industry and Trade.
3. Within 6 months since the date of having a
suggestion of selling electricity from the investor, the electricity Buyer will
have to conduct the signing of electricity sale and purchase contract with the
electricity Seller as prescribed.
4. The time limit for electricity sale and purchase
contracts for biomass power projects is twenty (20) years since the date of
commercial operation. After 20 years, both Parties may extend the time limit of
the contract or sign new contract in accordance with prevailing legal
provisions.
Article 12. Investment capital
and tax incentives
1. Mobilization of investment capital:
a) The Investor is entitled to mobilize capitals
from organizations and individuals in and out of the country for investing in
implementation of biomass power projects in accordance with prevailing legal
provisions.
b) Biomass power projects are entitled to
incentives in terms of investment credits in accordance with prevailing legal
provisions on investment credit and export credit of the State.
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3. Corporate income tax: The exemption, reduction
of corporate income tax for biomass power projects will be conducted as for
projects which are subject to investment incentives according to prevailing
provisions of taxation.
Article 13. Land incentives
1. Biomass power projects and power line and
substation works for connecting to the national power grid are entitled for
exemption or reduction of land use levy or land rent according to prevailing
legal provisions applied for projects under investment incentives domains.
2. Based on the planning approved by competent
level, provincial-level People’s Committee will be responsible for allocating
sufficient land for investors to implement the biomass power projects.
Compensation, support for site clearance will be conducted in accordance with
prevailing legal provisions on land.
Article 14. Power sale price
of grid-connected biomass power projects
1. For heat and electricity cogeneration projects:
The electricity Buyer will be responsible for buying entire redundant
electricity capacity from heat and electricity cogeneration projects which use
biomass energy with the electric price at the delivery and receipt point is VND
1,220 / kWh (not included value-added tax, equivalent to 5.8 US cents/kWh). Electricity price is adjusted according to fluctuations
of the exchange rate VND / USD.
2. For other biomass power projects:
a) Power projects using biomass energy for
generation, but not heat and electricity cogeneration projects: Electricity
price applied price list of avoidable expenses which is applied to biomass power
projects.
b) Every year, the Ministry of Industry and Trade
will build and promulgate Price List of avoidable expenses being applied to
biomass power projects.
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4. Expenses for buying electricity from biomass
power projects will be calculated and fully stated with input parameters in the
annual plan for electricity sale price of the Electricity of Vietnam approved
by competent state agencies.
5. Ministry of Industry and Trade will supervise
and propose adjustment of electricity purchase price as prescribed in Clause 1
of this Article, report to the Prime Minister for consideration and decision.
Article 15. Incentives and
support for non-grid connected biomass power projects
1. Non-grid connected biomass power projects are
entitled to incentives and supports as prescribed in Article 12 and Article 13
of this Decision.
2. Investors will build plans for electricity
prices and determine total support levels from the state budget and submit to
the Ministry of Industry and Trade for appraisal, sending of report to the
Prime Minister for approval. The total support level from the state budget is
extracted from the Fund for environment protection of Vietnam.
Chapter IV.
ORGANIZATION OF
IMPLEMENTATION
Article 16. Obligations of
Ministries, local authorities for biomass power projects
1. Ministry of Industry and Trade will be
responsible for:
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b) Organization, guidance and coordination with
People’s Committees of provinces to check and supper the implementation of this
Decision.
c) Promulgating the model the electricity sale and
purchase contract for grid-connected biomass power projects.
d) Building and promulgating national technical
regulations on biomass power.
dd) Promulgating price list of avoidable expenses
for biomass power projects yearly.
2. Ministry of Finance: Chairing, coordinating with
the Ministry of Industry and Trade, the Ministry of Natural Resources and
Environment to provide financial mechanism for support of development of
non-grid connected biomass power projects from the Fund for environmental
protection of Vietnam in accordance with prevailing legal provisions.
3. People’s Committees of provinces and
centrally-run cities:
a) Coordinating, supporting investors in term of
compensation, site clearance, infrastructure, human source to invest, implement
and develop local biomass power projects.
b) Supervising, monitoring and inspecting the
implementation of local biomass power projects within their competence.
c) Conducting the state management on activities
relating to biomass power in the localities according to prevailing legal
provisions.
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Article 17. Effect
1. This Decision takes effect on May 10, 2014.
2. Ministers, heads of ministerial-level agencies,
heads of governmental agencies, chairmen of People’s Committees of provinces
and centrally-run cities; heads of agencies, units and organizations relating
to activities of development of biomass power projects in Vietnam will take
responsibilities to implement this Decisions./.
THE PRIME MINISTER
Nguyen Tan Dung