Decision No. 08/2020/QD-TTg dated March 05, 2020 on Amendments to Decision No. 24/2014/QD-TTG on support mechanism for development of biomass power projects in Vietnam

DECISION

AMENDMENTS TO DECISION NO. 24/2014/QD-TTG DATED MARCH 24, 2014 OF PRIME MINISTER ON SUPPORT MECHANISM FOR DEVELOPMENT OF BIOMASS POWER PROJECTS IN VIETNAM

Pursuant to the Law on Organization of Government dated June 19, 2015;

Pursuant to the Law on Electricity dated December 03, 2004; the Law on amendments to the Law on Electricity dated November 20, 2012;

Pursuant to the Law on Investment dated November 26, 2014; the Law on amendments to the Law on Investment dated November 22, 2016;

Pursuant to the Law on construction dated June 18, 2014;

Pursuant to the Law on Planning dated November 24, 2017;

At the request of the Minister of Industry and Trade;

The Prime Minister promulgate a Decision providing amendments to Decision No. 24/2014/QD-TTG dated March 24, 2014 of the Prime Minister on support mechanism for development of biomass power projects in Vietnam.

Article 1. Amendments to Decision No. 24/2014/QD-TTG dated March 24, 2014 of the Prime Minister on support mechanism for development of biomass power projects in Vietnam

1. Clause 1 and Clause 2 Article 1 are amended as follows:

 “1. This Decision provides incentive mechanism for development of power generation projects with use of grid-tied biomass energy in Vietnam (hereinafter referred to as “biomass power projects”).

2. This Decision applies to organizations and individuals participating in power activities which are related to development of biomass power projects.”

2. Clause 1 and Clause 2 Article 2 are amended as follows:

 “1. Buyer refers to Vietnam Electricity (EVN) or its authorized member company or an organization that receives rights and obligations from the former as regulated in law.

2. Seller refers to an organization or individual engaging in generation of power produced from biomass power projects or the one receiving rights and obligations from the former as regulated in law.”

3. Clause 8, Clause 10 and Clause 11 Article 2, Article 3, Article 4 and Article 5 are abrogated.

4. Article 6 is amended as follows:

 “Article 6. Investment in biomass power projects

1. Development of biomass power projects shall comply with the planning. Appraisal and approval of the biomass power projects that are added to the planning shall comply with regulations of the law on planning. Biomass power projects included in approved power development plans at all levels shall be implemented in accordance with the transition provisions in Article 59 of the 2017 Law on Planning and the Resolution No. 751/2019/UBTVQH14 dated August 16, 2019 of the Standing Committee of the National Assembly providing explanation about some Articles of the 2017 Law on Planning.

2. Main equipment of a biomass power project must meet relevant national technical regulations. Quality of power produced by biomass power projects must meet relevant technical requirements regarding voltage, frequency and requirements for operation of the national electrical grids in accordance with prevailing regulations.

3. Investment in and construction of biomass power projects shall comply with regulations of the laws on investment, construction, electrical safety, land, fire fighting and prevention, and environmental protection and relevant laws.”

5. Article 7 is amended as follows:

 “Article 7. Connection of biomass power projects to electrical grids

1. The seller shall assume responsibility for investment in, installation, operation and maintenance of electrical measuring equipment, power lines and step-up substations (if any) from the seller’s power plant to the point of connection to the buyer’s electrical grid; organize the inspection, calibration and testing for electrical measuring equipment in accordance with regulations of law on measurement.

2. The seller and the buyer shall reach an agreement on points of connection which must ensure the electrical transmission capacity of the seller's power plant and be conformable with the approved planning. If a point of connection is different from the point where the electrical measuring equipment is installed, the seller shall bear the power loss in connecting power lines and the step-up substation of the power plant.”

6. Article 8, Article 9 and Article 10 are abrogated.

7. Article 11 is amended as follows:

 “Article 11. Responsibility to buy electricity from power projects

1. The buyer shall buy total volume of electricity produced by biomass power projects in conformity with regulations on operation of the national electrical grid and relevant technical regulations/standards applicable in electrical sector; maximize the generation capacity and electricity produced by biomass power projects.

2. The seller and the buyer are required to use standard-form power purchase agreement (PPA) when selling and buying electricity produced by biomass power projects.

3. The period of validity of a PPA for electricity produced by a biomass power project is 20 years from the commercial operation date. After this period, the extension to the signed PPA or conclusion of a new PPA shall be carried out in accordance with regulations in force at the time when such extension or conclusion of new PPA is made.”

8. Article 12 and Article 13 are abrogated.

9. Article 14 is amended as follows:

 “Article 14. Feed in Tariffs (FiT) for biomass power projects

1. For combined heat and power (CHP) projects: The FiT at the delivery point is 1,634 VND/kWh, equivalent to 7.03 UScents/kWh, determined according to the official exchange rate between VND and USD announced by the State Bank of Vietnam on February 21, 2020.

2. For projects other than CHP projects: The FiT at the delivery point is 1,968 VND/kWh, equivalent to 8.47 UScents/kWh, determined according to the official exchange rate between VND and USD announced by the State Bank of Vietnam on February 21, 2020.

3. The FiTs prescribed in Clause 1 and Clause 2 of this Article exclude VAT and shall be adjusted according to the fluctuation of USD price (according to equivalent values of UScents/kWh); applied exchange rate is the official exchange rate between VND and USD announced by the State Bank of Vietnam on the date of invoice issued by the seller.

4. With regard to a biomass power project which has been put into operation before the date of promulgation of this Decision, FiTs in Clause 1 and Clause 2 of this Article shall be applied from the effective date of this Decision to the expiry date of the signed PPA.

5. Costs incurred from the purchase of electricity produced by biomass power projects as prescribed in Clause 1 and Clause 2 of this Article shall be fully calculated and included in the input parameters of EVN’s annual electricity pricing scheme.

6. If a biomass power project applies the FiTs prescribed herein, it shall not apply any pricing scheme for its electrical production according to other regulations.”

10. Article 15 is abrogated.

11. Article 16 is amended as follows:

 “Article 16. Responsibilities of relevant organizations and individuals

1. The Ministry of Industry and Trade shall:

a) Organize, instruct and cooperate with the People's Committees of provinces and central-affiliated cities in inspecting and expediting the implementation of this Decision.

b) Promulgate the standard-form power purchase agreement which shall be applied for biomass power projects according to this Decision.

c) Promulgate regulations/technical regulations on equipment, testing and commissioning of biomass power plants.

d) Monitor and propose adjusting FiTs for electricity produced from biomass power projects, and submit adjusted FiTs to the Prime Minster for consideration.

2. People’s Committees of provinces and central-affiliated cities shall:

a) Cooperate and assist investors in compensation, land clearance, infrastructure and personnel for investment in, implementation and development of local biomass power projects.

b) Monitor and inspect the implementation of local biomass power projects within their competence.

c) Perform state management tasks of local activities related to biomass power in accordance with prevailing regulations.

3. Vietnam Electricity shall:

Fully calculate and include costs incurred from the purchase of electricity from biomass power projects in the input parameters of its annual electricity pricing scheme, and report it to competent authorities for approval.

4. Sellers shall:

Comply with regulations on operation of electrical grids, transmission grids, distribution grids and electrical measurements, and relevant regulations.”

Article 2. Effect

1. This Decision comes into force from April 25, 2020.

2. Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of People’s Committees of provinces and central-affiliated cities, and heads of relevant agencies, units and organizations involving in development of biomass power projects in Vietnam shall be responsible for the implementation of this Decision./.