Solar Power Trading: Deadlock due to lack of clear regulations

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The lack of clear regulations is confusing for both solar PV sellers and buyers. Photo: Nguyen Thanh

Abundant electricity cannot be sold

Mr. Nguyen Van Tien, owner of Tien Tien Organic Agriculture Farm in An Hai commune, Ninh Phuoc district, NinhThuan province, in an application sent to the authorities and EVN said: “In 2018, we set up a farm producing organic vegetables, herbs, livestock and poultry with clean, high quality, international standards to supply to domestic and export markets. However, because of a lack of power for production, we have to invest by ourselves in nearly 3km of 22kV line to bring the grid electricity to the farm for production.”

In response to the policy of developing solar power of the Government and localities, at the same time making use of endless solar resources, increasing economic value for farms and workers, this unit invested in installing photovoltaic panels on the system of factories, nurseries, walkways and sunshades, just to get electricity for irrigation, lighting, processing, packaging, product storage, and have more income from excess electricity output.

Up to now, the whole farm has invested and put into operation 12 solar power projects, but only two projects have been contracted with NinhThuan Power Company under Decision No. 11/2017 / QD- TTg dated 11/4/2017 of the Prime Minister on a mechanism to encourage the development of solar power projects in Vietnam, while 10 projects are only equipped with meters, recording electricity output on the grid.

"Although we have sent many petitions and specific solutions for the power sector, the Ministry of Industry and Trade has not yet signed a power purchase agreement," Mr. Tien said.

Regarding problems in the purchase and sale of rooftop solar power, in a document sent to EVN's leaders, CAS General Trading One Member Limited Company (one of the investors of the rooftop solar project in NinhThuan) said that the enterprise has been delayed in signing power purchase and sale contracts for more than a year, greatly affecting production and business activities of enterprises.

Recently, the company has had a discussion about solving problems in signing rooftop solar power sale and purchase contracts with representatives of EVN's Business Board, but the enterprise has not received specific instructions to sign the contract on electricity trading. The Business Department believes that the concept of "on the roof of a construction work" is not clear, so EVN needs to wait for guidance from the Ministry of Industry and Trade.

“We are trying our best to coordinate with international organizations such as Oxfarm, GreenID, SEACEF, to bring high-tech agricultural models, organic agriculture combined with rooftop solar energy production to produce livestock, poultry, organic vegetables.It is expected that we will conduct a pilot model for fish farming in AnGiang, fish farming combined with vegetable farming in Dong Thap and hi-tech shrimp farming in Bac Lieu in July and August 2020. However, the implementation of these models is being delayed by problems in signing PPA,” the document signed clearly by Ms. Nguyen Pham Cam Tu, Director of the Company.

Confused due to unclear regulations

Currently, NinhThuan Power Company has not been able to sign contracts and pay for electricity purchased from the above solar power systems as the price of electricity purchased from these systems has not been determined whether it is rooftop solar power or solar electricity and ground according to Decision 13/2020 / QD-TTg dated April 6, 2020 of the Prime Minister on mechanisms to encourage the development of solar power in Vietnam.

EVN has issued document No. 4971 / EVN-KD to request the Ministry of Industry and Trade and the Department of Electricity and Renewable Energy (Ministry of Industry and Trade) to guide the handling of problems on distinguishing between the systems of rooftop solar power and grid-connected solar PV.

Regarding this issue, EVN has received recommendations from some solar power investors in NinhThuan province.

Specifically, an organic agricultural farm in Ninh Son district, NinhThuan province, covering over 20 hectares, was granted a business license by the People's Committee of Ninh Phuoc district with the profession of growing agricultural products, animal husbandryfor the domestic market and export.Farm owners are subleasing land and infrastructure to a number of other companies to cultivate, combining with installation of solar power systems with a capacity of less than 1 MW, connecting 22 kV voltages to meet demand, produce and sell electricity to the national grid.

Most systems have photovoltaic panels installed directly on the support frame for the internal road area and on the building frame with a mesh covering the cultivated area. According to investors, the use of roofing sheets is to suit the agricultural production below, reduce water use, and reduce sunlight to suit plants and animals under the roof.

In addition to the above cases, there are also many problems related to solar power systems with similar properties.

EVN stated, according to Article 3 of Decision 13/2020 / QD-TTg: “Rooftop solar power is a solar power system with photovoltaic panels installed on the roof of a building and having capacity not exceeding 1 MW, directly or indirectly connected to the power grid with a voltage of 35 kV or less of the electricity buyers.”

EVN requested the Ministry of Industry and Trade, the Department of Electricity and Renewable Energy to consider and soon guide specific criteria for distinguishing between rooftop solar power systems and grid-connected solar power systems, creating favorable conditions in determining the electricity purchase and sale prices for solar power systems in accordance with the provisions of Decision 13/2020 / QD-TTg of the Prime Minister. At the same time, EVN also petitioned the Ministry of Industry and Trade to assign local Departments of Industry and Trade to inspect and determine the suitability of the criteria for power units to sign PPA with investors.