The transition from a feed-in tariff scheme to an auction mechanism may take longer than expected in the Southeast Asian country, as the Ministry of Industry and Trade is considering maintaining FITs of $0.0709/kWh to $0.0769/kWh for projects that secured approval before Nov. 23, 2019, if they come online as scheduled by the end of this year. According to law firm Lexcomm Vietnam, there are currently 3 GW of projects with licenses.
Vietnam’s Ministry of Industry and Trade (MoIT) sent a report to the government on Tuesday in which it recommends maintaining feed-in tariffs for large-scale PV projects, rather than switching to auctions, according to law firm Lexcomm Vietnam.
The proposal contradicts the MoIT’s own recommendation in early December, when it said that support for large-scale solar should be provided via procurement exercises from this year – marking a clear shift away from earlier promises to reboot its FIT scheme.
According to Lexcomm, the MOIT is now urging the government to maintain a FIT of $0.0709/kWh for ground-mounted projects and $0.0769/kWh for floating PV plants, but only for projects that were approved before Nov. 23, 2019, assuming they come online as scheduled by the end of this year.
The tariffs would be awarded to 36 projects with a combined capacity of 2.99 GW that are already approved for development, the law firm said.
Vietnamese media outlets, meanwhile, have revealed that the MoIT’s proposal is designed to avoid a slowdown in the large-scale PV segment, which would probably happen if the government immediately adopted an auction scheme.
The idea of a new auction mechanism was originally conceived to support large-scale solar projects that failed to secure a FIT contract last year. In mid-December, the MOIT asked regional governments and state-run utility EVN to suspend new approvals for large-scale PV projects under the FIT scheme.
About 135 projects with a combined capacity of 8.93 GW have been approved under the FIT program and around 4.5 GW of them had online by the end of June 2019, when the first phase of the country’s solar subsidy scheme expired.
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