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Vietnam solar timeline
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Introduction

Recent successes from FiT1 & FiT2:

Vietnam solar industry saw tremendous growth during 2020 with a record 101,996 rooftop solar power installations (RTS) and 9,583 megawatt peak capacity (MWp). This success is driven by the Prime Minister Decision No. 13/2020/QD-TTg (“Decision 13”) on Mechanisms to Promote the Development of Solar Power Projects in Viet Nam that stipulated a feed in tariff FiT2 (together with Circular 18 on private power purchase agreement PPA.)

Feed-in-tariff (FiT2): c= UScent/ kWh

  • Rooftop solar: 8.38c (1,913đ)
  • Ground mount: 7.09c (1,644đ)
  • Floating solar: 7.69c (1,783đ)

It follows on top of the previously successful Decision 11 with FiT1 of 9.35 c/kWh (2,066đ) for both rooftop and ground mount. Within just 2 years from an almost non existent solar market, this policy Vietnam as the leading ASEAN solar market!

Vietnam leading ASEAN solar market

Vietnam is leading ASEAN solar market. Source: theaseanpost.

What to expect in 2021: Solar Auction.

Solar competitive price auction mechanism for ground mount and floating is expected to replace FiT2 in 2021. This was first mentioned in Notification 402/TB-VPCP.

For rooftop solar, industry experts expect a new FiT3.

Video: industry expert forecasts 2021:

Japan Pacific Energy on solar park and Suntiki Solar on commercial solar rooftop (Vietnam solar C&I). Source: Saigon Times.

Why Solar Auction Mechanism: 2 Main Reasons
Vietnam solar park location distribution: mainly to Ninh Thuan and Binh Thuan

Uneven solar park distribution in Vietnam. Source: GIZ.

1/ Competitive auction brings kWh price down:

Although FiT successfully promoted Vietnam solar development, it came at a higher kWh price than its neighbouring ASEAN countries. Industry experts compare FiT2 rate (7.09c/kWh) to the recent 60MW Cambodia solar auction that secured 3.877c/kwh and attracted 26 bidders, concluding that solar auction can bring 30-40% price reduction for solar project in Vietnam.

2/ Auction distribute solar parks evenly in the country:

Another issue is that most of the development were located in highest sunshine condition provinces of Ninh Thuan and Binh Thuan. High concentration of solar parks in one area can cause grid instability if the electrical infrastructure is not large enough. To mitigate the instability the solar park operators reduced to 30-40% of actual capacity at certain times that led to loss of 500bln vnd (21.7 m usd) according news reports.

Solar Auction: 3 Options

Taking these factors into account the MOIT laid out different plans in their Proposal 1968/TTr-BCT issued on March-2020:

  • Option 1: Open bidding. Competitive price selection.
  • Option 2: Location based bidding. Based on transformer location of EVN.
  • Option 3: Pre-qualified bidding. Pre-select suitable investors for large scale solar plants (100MW or more).
MOIT Pilot Project:

MOIT proposed a pilot project following Option 1 to study the open auction mechanism in the subsequent Dispatch 7200/BCT-DL issued on September-2020. The Dispatch included Prime Minister Decision Draft with following key details:

  • Pilot project size: Total participant is 1,600MW where 600MW is already in master plan (PDP) while 1,000MW not yet in PDP but already appraised. The final capacity to be awarded will be 1,000 MW.  
  • Time frame:
    • Determine price (bidding): 2020.Nov – 2021.May
    • COD: 2022.June.30
  • Participants must have been included in the PDP.
  • The pilot project will use the 20 years PPA in Circular 18.

Click here for all policies, decisions, circulars with timeline overview.

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Vietnam solar in numbers:

Vietnam total installed PV:

DC: 1 MWp
AC: 1 MW

Solar parks

1 MWp

C&I RTS

1 MWp
Estimated

Residential RTS

1 MWp
Estimated
50000

Total no. of RTS projects

1

Total RTS power MWp

(1.15bln kWh)

RTS = rooftop solar. Updated: 2021-02-15. Source: EVN Solar.

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Key details:

Key documents:

Links:

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Decision 13 Results

Vietnam solar feed in tariff price 2020

Key results by 31 December 2020:

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Decision 11 Results

Key results by 30 June 2019:

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Please do not hesitate to contact us if you need:

– Support with proposal for upcoming solar auction.

– Opportunities/ challenges in developing solar energy projects in Vietnam.

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