July 11, 2020 02:15

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Bidding is not a "miracle" for developing solar power

18:01 | 02/12/2019

VCN - Experts say that bidding for solar power is an objective and transparent plan, but this is not a "miracle" to solve uncertainties in solar power development in Vietnam.  

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Grid overload is the current problem when developing solar power projects in some localities. Photo: Nguyen Thanh

Two bidding options

Recently, the Government Office has announced the Prime Minister's conclusion at the Government's permanent meeting on the draft solar power development incentive mechanism applied from July 1, 2019.

Regarding the development of solar power in the future, the Prime Minister requests to comply with the principle of centralization for places with potential and advantages with good development conditions; need to calculate the structure of power sources scientifically and methodically, it must switch to implementing the bidding mechanism, resolutely eliminate the application, focus on handling projects that have been completed but could not be put into operation before July 1, 2019.

To mention the problem of bidding for solar power projects, speaking at the International Conference: "Renewable energy in Vietnam: From policy to practice" took place on themorning of November 27, in Hanoi, Do Duc Quan, Deputy Director of the Department of Electricity and Renewable Energy (Ministry of Industry and Trade) said that world experience, after applying the fixed electricity price (FIT), the bidding is natural. This is the most transparent way.

Expected in2021, after the end of the FIT price will hold to open bidding,from now to 2021, Electricity of Vietnam (EVN) will bid for some pilot projects.

The Ministry of Industry and Trade and some international organizations are implementing faster than normal procedures and processes to be able to deploy bidding and solve problems such as where to bid and how to bid.

Ministry of Industry and Trade is developing two bidding options. One is bidding by transformer station. For example, in an area with a station with sufficient capacity to transmit capacity to the system, it is possible to bid around that area where the projects choose the lowest price, ensuring sufficient capacity.

The second form is clean clearance, inviting investors to do part or all of the project. For example, in the case of Cambodia, the part of the factory project consists of panels and controllers, but lines and stations and clearance are done.

Oliver Behrend, Senior Investment Officer, Infrastructure Division, World Bank (WB) said that bidding should not be obsessed. It is important that a good process is used to ensure screening before bidders.

Half price reduction still attracts investors

Ms. Hyunjung Lee, Senior Energy Economist of Energy Department, Southeast Asia Department, Asian Development Bank (ADB), which has just conducted a successful bid for asolar power project in Cambodia, said thatthe bidding aims to ensure efficiency and transparency of the project, attracting the attention of international and regional investors.

The bidding result in Cambodia was 3.877 cents / kWh, this figure was halved compared to the initial price set by the Cambodian authorities. The competitiveness is strengthened and still attracts investors, although the purchase price of electricity is reduced to half.

Ms. Hyunjung Lee assessed that this result was due to the preparation work of the Cambodian Government. Accordingly, the Cambodian Government has prepared premises, infrastructure, improvement of power purchase contracts to help businesses borrow from banks, have changes in laws as well as compensation mechanisms.

Mr. Tomaso Andreatta, Vice President of EuroCham expressed his opinion: Actually, comparing prices is not really important. Vietnam is different from Cambodia where its scale and growth speed is much faster.

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"When operating the bidding mechanism, it is necessary to screen out non-professional units or weak competitiveness to ensure that when the construction project must meet the requirements set out," Mr. Tomaso Andreattasaid.

By Thanh Nguyễn/Bui Diep