Investors in solar power plants are worried that infrastructure shortcomings will prevent them from meeting a year-end deadline after which tariffs might be reduced.
Twenty five plants are currently being built, with their investors racing to finish them to get the feed-in tariff of 7.09 U.S. cents per kWh for 20 years.
The government describes this purchase price as an incentive, and investors are afraid it will be reduced further in the new year following an earlier cut from 9.35 cents in June last year.
Energy company Hado Group is building a 50 MW solar farm in the central province of Ninh Thuan, and it would become operational this month.
Nguyen Huu Vinh, deputy chairman of the group’s energy development board, said at a recent meeting that since a transmission line would not be completed by September, the operation date of the plant might be delayed.
The lands required for the line have not been acquired yet, and negotiations for their purchase are still ongoing, he said. The company has urged authorities to complete the installation by August.
The second phase of the 104 MW Sao Mai Solar Power Plant in southern An Giang Province, the first solar farm there, faces a similar problem.
The company said its plans to begin operation of the second phase by the end of this year might be delayed because a transmission line upgrade has begun three months later than planned.
Another issue is that foreign experts have not been able to enter Vietnam due to the Covid-19 pandemic, meaning equipment might not be installed in the plant in time for the project to enjoy the incentive feed-in tariff, said Ho Manh Dung, a spokesperson for Sao Mai Corporation.
He called for the deadline to be extended allowing more solar power plants to go on stream.
National utility Vietnam Electricity (EVN) said it has been making efforts to enable more solar power plants to link up with the national grid.
The National Load Dispatch Center (NLDC) said it has been upgrading transmission lines in Ninh Thuan and Binh Thuan provinces to accommodate new renewables projects.
It has also been cutting down the load from hydropower plants to offer more space to renewable energy plants.
NLDC has ordered relevant agencies to complete installation of the transmission lines relating to the two projects so that they could be operational by the end of the year.
Eleven solar farms began operating in July, bringing the total number in the country to 110 with a total capacity of 5,482 MW, or 9.5 percent of Vietnam’s electricity supply.
So far 35 have been eligible for the 7.09 cents tariff.
The government is trying to reduce reliance on coal-fired power plants and increase production of renewable energy.