The Government Office has released this PM direction on this issue for the MPI, the Ministry of Industry and Trade and relevant agencies after local media has reported that a Thai investor has acquired solar power projects in Binh Phuoc.
According to reports, Thailand's Super Energy Corporation Company Limited (Super Energy) has announced it has acquired the Loc Ninh 1, 2, 3, 4 solar power projects in Binh Phuoc by buying those plants’ shares from intermediary companies with a total investment of US$456.7 million.
Of which, the investment is US$99.7 million to the Loc Ninh 1 solar power project, US$140 million to the Loc Ninh 2, US$105 million to Loc Ninh 3 and US$112 million to Loc Ninh 4.
Before investing in the four solar power projects, Super Energy owned six other solar power projects in Vietnam. As of March 2020, those six projects alone had a total capacity of up to 286.72 MW, half the total capacity of Super Energy’s 100 solar power projects in Thailand.
Super Energy’s power projects in Vietnam have had a return on investment (EIRR) of 12-13% while the Loc Ninh 1,2,3,4 solar power projects have much higher EIRR between from 16.59% to 17.4%.
The Thai investor has also purchased shares in a series of other solar projects in other provinces, including Ninh Thuan and An Giang and shares in four wind power projects in Bac Lieu, Soc Trang, Phu Yen and Gia Lai provinces.
These projects are expected to be in full or partial operation from the fourth quarter of 2021.
With the forms of joint venture or share transfer with Vietnamese enterprises, many foreign energy and investment groups have owned dozens of solar and wind power projects enjoying preferential rates of 9.35 US cents per kWh for 20 years in Vietnam, the Tien Phong (Vanguard) newspaper reported.
Of which, Thanh Thanh Cong Group and Gulf Energy Group (Thailand) have set up a joint venture from mid-2019 to put investment to two solar power plants in Tay Ninh province, TTC 1 and TTC 2.
The Gulf has increased its holding to 90% of shares at the two plants from 49% in 2019. It also holds 95% of shares at wind power projects in Ben Tre province.
Besides Thailand, many investors from Singapore, China and Philippines have owned many solar and wind power projects in Vietnam.
At present, more than 30 provinces and cities nationwide have solar power projects, raising concerns about broken electric planning and environmental problems.
According to experts, Vietnam has had a strong development of solar projects after the State announced the attractive power purchase price at 9.35 US cents per kWh equivalent to VND2,086 per kWh for solar power projects starting operation before June 31, 2019. This price would be for those projects within 20 years.
As a result, more than 300 solar power projects have been registered after this decision, breaking the Electricity Development Plan VII.
The Ministry of Industry and Trade (MoIT) noted the hot development of solar power projects has created a lack of synchronisation with development of transmission infrastructure at present.
Vietnam is expected to have a total solar power output of at least 7 GW this year, too higher than the 0.8 GW national target for this year, according to the studies conducted by the GIZ German development cooperation agency’s Renewable Energy and Energy Conservation Project and the MoIT’s Department of Electricity and Renewable Energy.
Of which, Binh Thuan has nearly 100 solar power projects with a capacity of 4,000 MW, exceeding the planning at the Electricity Development Plan VII. This number of solar power projects is 10 times higher than wind power projects. This has led to a mismatch and deployment, which has led to a serious overload for the electricity network system of the region.
Ninh Thuan, an attractive investment destination for power companies, has 30 solar power projects with a total capacity of up to 1,817 MW and a total investment capital of VND50 trillion approved by the Prime Minister and the MoIT.
This province estimates to have 26 more solar power projects with a total capacity of 3,600 MW.
With massive solar power projects landing to many localities such as Ninh Thuan, Binh Thuan, Tay Ninh, Gia Lai, Hau Giang and Quang Ngai, the MoIT reported, by the end of 2019, a total capacity of about 15,000 MW from solar power projects have been approved by the Prime Minister and the MoIT to put into the Electricity Development Plan VII.
That has created difficulties in developing the electrical grid in the regions nationwide and building electric transmission infrastructure for solar power projects connecting the national electrical grid, according to MoIT.