Electricity workers of Dien Bien province are checking partial discharge equipment by PD machine at Dien Bien 110kV Station. Photo: Xuan Tu/Vietnam News Agency
According to the draft, on the mechanism for LNG-fired power plant projects, organizations and individuals participating in investing in LNG-fired power plant projects must proactively implement projects included in the Electricity Plan in accordance with regulations, ensuring efficiency; agreeing that businesses must proactively negotiate, sign and be responsible for contracts and commercial agreements. The Government agrees in principle to the mechanism of converting gas prices to electricity prices of power plants.
In the period up to 2030, the Government stipulates that the proportion of electricity through long-term power purchase contracts is at least 70% during the repayment period of the power plant project but not more than 7 years to ensure feasibility in attracting investment, avoid strong impact on retail prices as well as ensuring equal competition with other types of power sources in the electricity market.
With the mechanism for power plants using domestic natural gas, for key oil and gas projects that contribute significantly to economic development, ensuring national energy security, national defense and security, and protecting Vietnam’s sovereignty, The Government agrees in principle to convert gas prices to electricity prices of power plants. The Ministry of Industry and Trade guides the mechanism for consuming upstream gas output of Ca Voi Xanh gas field, Lot B gas.
Regarding the power purchase contract, the Draft Decree of the Ministry of Industry and Trade states that the power generation unit signs a contract with the Electricity of Vietnam Group according to the form issued by the Ministry of Industry and Trade to participate in the competitive wholesale electricity market and sell electricity of the power plant onto the spot electricity market. At the same time, the cost of purchasing electricity from power plants using domestically exploited natural gas and imported LNG is reasonable and valid costs and is calculated and adjusted in the retail electricity price.
The contract language used is Vietnamese. The Buyer and the Seller may agree to supplement the contract with the language used in English, the parties may agree that English will be preferentially applied. The governing and dispute resolution law shall comply with the provisions of Vietnamese law. The parties may agree to apply foreign laws in accordance with issues that are not fully regulated by Vietnamese law.
In addition, the electricity price in the power purchase contract is calculated in US dollars, the payment is made in Vietnamese dong…
Although the Decree is applied in a simplified form, in order to have more comments, the Ministry of Industry and Trade organizes extensive consultation with affected subjects as well as the community. Accordingly, this Decree applies to organizations and individuals participating in investment in power plant projects using natural gas and LNG, such as power generation units owning gas-fired power plants connected to the national electricity system; electricity units including: Electricity of Vietnam Group; Vietnam Oil and Gas Group; System operator and electricity market transaction operator.
