The Ministry of Industry and Trade has recently proposed a new pricing mechanism for the surplus of rooftop solar power.
In the latest presentation sent by the Ministry of Industry and Trade (MoIT) to Deputy Prime Minister Tran Hong Ha regarding a number of requests and directives related to the process of drafting the Decree on self-produced and self-consumed rooftop solar power (RTSP), many noteworthy contents have been presented. This draft has many differences compared to the most recent draft of MoIT.
Most notably is the issue of buying and selling surplus RTSP not exceeding 20% of the capacity in the North and 10% in other regions. In the first option, for self-produced and self-consumed RTSP connected to the grid with a capacity scale according to the national power plan, if not fully used, it can be sold to the national power system but not exceeding 20% of the actual installed capacity in the North and not exceeding 10% in other regions.
Accordingly, the Vietnam Electricity Group – EVN pays for the surplus electricity generated into the national power system but not exceeding 20% of the installed capacity in the North and 10% in other regions. The electricity buying and selling price is agreed upon by the buyer and the seller, applied not to exceed the average market electricity price of the previous year announced by the power system and market operator.
The second option is that surplus RTSP can be sold to the national power system but not exceeding 10% of the actual installed capacity, and EVN pays for this output. The buying price of surplus electricity in this case is controlled not to exceed the average market electricity price of the previous year as decided by MoIT after receiving a report from EVN.
According to this regulation, EVN stated that the average market electricity price in 2023 is 1,091.9 VND/kWh. Thus, compared to the latest calculation method and pricing option proposed by the MoIT, the purchase price of each kWh of surplus self-produced and self-consumed RTSP has widened the margin by about 400 VND, applicable to 2024 if this proposal is approved.
Specifically, about 2 weeks ago, MoIT proposed three detailed pricing options. The first option is to apply the average electricity price according to the annual avoided cost (*). This option is applied by averaging the electricity price according to the annual avoided cost issued by MoIT.
The second option is to take the hourly market electricity margin price, minus the distribution cost per kWh. However, both of these options are complex and difficult to implement. Therefore, MOIT proposed the third option, which is to apply the purchase price of surplus electricity fed into the grid from 600 – 700 VND/kWh, with a proposed price of 671 VND/kWh.
It can be seen that there is a significant difference between the purchase price of rooftop solar power of EVN in the period 2021-2023 at about 1,978 – 2,200 VND/kWh with the calculated ceiling price this time of 1,091.9 VND/kWh according to the price proposal of MoIT just sent to Deputy Prime Minister Tran Hong Ha. MOIT also provided further explanation for the way to propose two surplus electricity purchase options (ceiling of 10% of installed capacity or 20% – 10% depending on the region) as mentioned above.
Accordingly, MoIT proposes the 20%-10% option because the draft has been implemented in accordance with the directives of the Government leaders. This option has the advantage of encouraging the installation of RTSP in the North, where solar radiation is lowest in the country. However, this option creates discrimination between regions. “MoIT finds that the remaining option is suitable at the present time. In the future, when legal and technical conditions allow, the scale of RTSP development in the Northern region will be considered and supplemented in accordance with the procedures and regulations of the Planning Law,” said Deputy Minister Nguyen Hoang Long.