The photo voltaic challenge in Vietnam
Picture: Sungrow
Vietnam’s MIOT launched a brand new pricing framework for photo voltaic and wind initiatives on January 7.
The initiatives didn’t get an influence tariff in Vietnam’s first and second feed-in-tariff (FIT) rounds and needed to promote energy to state-owned EVN via energy buy agreements, based on on the new value ceiling. EVN at the moment has a monopoly on the transmission, distribution, wholesale and retail of electrical energy, being the only purchaser within the Vietnamese market.
The brand new resolution lowers the value ceiling for ground-mounted photo voltaic initiatives from $0.0709/kWh to $0.0502/kWh, a 29% discount. The ceiling value for onshore wind decreased by 21%, from $0.085/kWh to $0.0672/kWh.
“My interpretation is that the low new ceiling is a approach to kill these initiatives as a result of massive will increase in photo voltaic capability will not be wished in the mean time,” mentioned Moritz Sticher, senior adviser on the consulting agency Berlin-based Apricum. pv journal. “Attributable to excessive growth and land prices, such tariffs make these initiatives financially unviable.”
In response to a simulation mannequin for a 100 MW ground-mounted photo voltaic plant, the brand new value ceiling will cut back the web current worth (NPV) of the asset from $160 billion to $503 billion. The inner price of return (IRR) will lower from 10.7% to six.2%. The info was modeled by Mai Nguyen, funding banking senior affiliate at Saigon Hanoi Securities (SHS).
Vietnam has lengthy been engaged on a pilot scheme that may, for the primary time, open its electrical energy market to bilateral PPAs. It’s formally set to run between 2022 and 2024, with expectations now pointing to the primary quarter of this 12 months. There was no official affirmation from the Vietnamese authorities to this point. In response to the most recent Apricum knowledge, the nation has put in about 18.47 GW of photo voltaic capability.
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