Businesses Appeal for Support as Solar Power Capacity Reduction Looms

Never before have ground and rooftop solar power investors faced such a shocking and painful situation as they are today.

If the draft action program for implementation of the Eighth National Power Development Plan or Power Plan 8 does not include solar power projects, rooftop solar power will be transmitted to the grid in exchange for nothing and excess output will be also discouraged from being sold to neighbors.

Besides, many solar power producers are calling for help because their capacity has been cut by 30% - 50% - 60% or 100% depending on the time frame, which has caused them serious losses and send some to face bankruptcy.

Meanwhile, EVN imports electricity from China at a price of 1,540 VND per kWh and buys wind power from Laos at a price of 1,632 VND per kWh to sell to domestic consumers at a six-grade pricing framework. The most recent electricity price increase on November 9, 2023 was 4.5%.

CO2 emissions are currently 6% higher than when countries signed the Paris Agreement at COP21 when clean electricity capacity was cut by at least 30%

Don't let clean power companies suddenly get "bogged down" when executing Resolution 55 of the Politburo.

With a sunny climate almost all year round, Vietnam has a lot of advantages and potential for developing clean energies hardly seen elsewhere on the globe. On February 11, 2020, General Secretary cum (then) President Nguyen Phu Trong signed Resolution 55-NQ/TW of the Politburo on Vietnam's national energy development strategy to 2030, with a vision to 2045, under which "clean energy" will motivate the development of "clean electricity" for the country.

A well-timed popular policy created spectacular progress for Vietnam's renewable energy industry and brought a brand-new field that was once only on paper into a proud reality. When clean electricity is introduced to the world and developed strongly, it will repel dirty electricity, save forex reserves, improve the living environment and protect invaluable natural resources. Since then, Vietnamese people have known about solar power and adopted this type of progressive energy as an inevitable, irresistible trend.

Bau Ngu Solar Farm, Ninh Thuan province

Unfortunately, the promising future of renewable energy is threatened when billions of kWh of clean electricity are arbitrarily cut, causing huge losses to the economy, while investors are struggling to keep it on.

Policy against guideline

Enlightening renewable energy is an important guideline that has been discussed for years. Therefore, it is confusing when regulations do not clearly express or even go against the guideline of the Politburo that the Ministry of Industry and Trade and EVN are applying.

According to clean electricity producers, it is a huge loss and damage for not to running solar power parks at full capacity because these facilities are primarily funded by bank loans while electricity selling prices are not stable. Besides, in 2017-2018 and in 2019 -2020, there were no terms and conditions regarding production capacity reduction when power purchase contracts were signed.

During the rainy and stormy season, as water fully flows into reservoirs, hydroelectric plants run at excess generating capacity and clean electricity producers have to accept output cut as a force majeure case. Paradoxically, in the current context, it is dry and cold in the country, electricity demand is increasing towards the year's end and EVN is urgently calling on consumers to practice power thrift due to serious power shortages.

In such context, EVN should have flexibly broken restrictions on solar power to connect it with the grid to provide affordable clean electricity for the economy. But instead, EVN did the opposite and even further tightened solar power capacity.

On the other hand, EVN openly used the excuse of power shortages to swiftly submit a plan on increased electricity imports from China and Laos at high prices to sell to people in the country for a profit.

Petitions handed to many agencies

Clean electricity producers have repeatedly petitioned and even asked for help to the National Assembly, the Government, the Ministry of Industry and Trade, and EVN but have not received any workable solution but unclear, confusing but unempathetic answers.

Capacity cut has caused huge damage to solar power plants in Ninh Thuan

It is necessarily fair and objective to affirm that clean electricity is considered a "new factor" that produces a positive effect and helps national energy security as the Prime Minister committed to at COP26. It also creates jobs for high-quality personnel and contributes greatly to the country's socioeconomic development goals.

However, EVN's reasons for reducing solar power output is unconvincing and "improvised", showing a regression in responsibility and common development vision. Renewable energy is being treated incorrectly to hurt investors and send people to a disadvantage.

What if there is a shortage of electricity in 2024? How will the Ministry of Industry and Trade and EVN answer it when there is no mechanism for solar power development due to proposals that go against Resolution 55 of the Politburo?

Vĩnh Huy Chương (Vietnam Business Forum)