In the draft of the Decree on the incentive mechanism for the development of rooftop PV power (RTGS) for self-consumption, which is being consulted to complete the submission to the Government, the Ministry of Industry and Trade proposes that the type of grid-connected RTGS installed in residential houses and public offices for self-use and grid connection will not be sold or sold at zero price.
Based on the practical situation
The above proposal has received great attention from individuals and organizations with the demand for developing RTGS for self-consumption. According to the draft Decree developed by the Ministry of Industry and Trade, the type of RTGS not connected to the grid will be developed unlimitedly. Organisations and individuals are encouraged to install storage systems for proactive use in production and business. In the case of this source connected to the grid, when choosing to generate surplus electricity into the system, the government will record its output but will not settle payments.
Economic experts see that in the context of the pressure of lack of resources, large electricity sources have not been added, and the demand for electricity consumption is increasing, the incentive mechanism issues for RTGS need to be carefully considered.
Dr. Ngo Duc Lam, former Deputy Director of the Energy Institute, said that the characteristic of solar power is to generate electricity during the day and change the radiation at each moment, leading to excess or lack of electricity during use. Failure to sell surplus electricity, or according to the new proposal, which is only to record output but not pay, will result in inefficiency when investing in solar power systems. With those shortcomings, Dr. Ngo Duc Lam believes that if purchasing at VND0, it will be challenging to encourage investment. “If the surplus electricity output from solar power systems is sold on the grid, it will benefit the economy and can help reduce retail electricity prices,” said Dr. Ngo Duc Lam.
Sharing the same viewpoint, Mr. Phan Cong Tien, an energy expert, believes that there is a need to review the incentive mechanism for developing RTGS based on proposals in the aforementioned draft. If purchasing at VND0, solar power investors will lose part of their output when connected to the grid. From practice, the energy expert emphasized that people who install RTGS systems all wish to sell some of the surplus to the power industry to recover capital and avoid wasting electricity. Therefore, the drafting agency should consider options for the power industry to negotiate with households that have installed RTGS, repurchasing the surplus electricity at a suitable price. This will help avoid waste, optimize electricity resources in light of the potential sharp increase in electricity demand in the coming time, and encourage investment, which is the policy’s goal.
Many concerns about the proposal that surplus rooftop solar power is purchased at a price of VND0 (Photo: EVNHANOI)
Concern should be blocked (?!)
According to the Electricity Regulatory Authority of the Ministry of Industry and Trade, the current rooftop solar power capacity is about 7,660 MW, accounting for more than 9% of the total capacity, and the output is nearly 4% of the entire national power system. In terms of installed capacity, the RTGS source has a much higher proportion than other renewable energy sources, such as wind power and biomass power.
During the completions of the above-mentioned draft Decree, despite conflicting opinions on the proposal to sell excess RTGS at a price of VND0, the Ministry of Industry and Trade still kept this proposal in the latest draft. According to the Minister of Industry and Trade, Nguyen Hong Dien, at the present stage, in the context of the conditions of the transmission and distribution system, balancing the resource structure, anti-backflow measures, and the buying solution at a price of VND0 (in the case of generation on the national grid) are appropriate to ensure the prevention of profiteering from policies. “The incentive mechanisms for the type of rooftop solar power for self-consumption are a breakthrough in efforts to remove legal barriers for developing electricity sources in the context that some specialized legal regulations have not kept pace with reality,” said the Minister.
Faced with concerns that the VND0 selling price would make it difficult to attract people to invest in RTGS, the Electricity Regulatory Authority said that the development of RTGS for self-consumption must comply with Power Planning VIII. Accordingly, rooftop solar power of people, at construction works, production and business establishments, is encouraged for on-site consumption, not connected, or not sold to the national grid. If it is massively developed on a large scale, it will significantly impact the system’s balance, causing unnecessary costs. The Electricity Regulatory Authority also stated that investors see the advantages of RTGS, the most direct being an investment that will reduce the monthly electricity purchase cost from the electricity company. However, the power supply must be stable for households using electricity with invested RTGS. RTGS’s operation must be considered in the context of the entire power system.
The Electricity Regulatory Authority emphasizes the issue of “self-production, self-consumption” and has proposed numerous mechanisms and policies to encourage this, such as allowing grid connection, exempting power operation licenses, and adjusting the functions of works. If it is developed for business purposes, buying and selling, organizations, and individuals must comply with the regulations of the Planning, Electricity, Investment, and Construction Laws and other specialized laws. With such open mechanisms, the Ministry of Industry and Trade is concerned that if electricity is sold, it will lead to a violation of the country’s electricity planning and make it difficult to control the grid system, causing insecurity and profiteering from the state’s policies.
Emphasizing that the grid infrastructure has been gradually invested in recent years, the Electricity Regulatory Authority believes it does not necessarily meet all power sources with various capacity levels. To do that, there must be storage technology, grid system dispatching and operating technology, and a power source that can generate timely when wind power and solar power decrease. If RTGS for self-consumption is encouraged and grid connection is allowed without capacity limits, the operation of the power grid of the Vietnam Electricity Group (EVN) will encounter significant difficulties, and the risk of insecurity of the national power system will be very high.
Electricity consumption increases by record
In the past week, electricity consumption set many new records due to hot weather, averaging nearly 947 million kWh per day. Northern provinces alone increased by more than 31.7 million kWh per day.
At 13:30 on April 27, the highest nationwide capacity demand was 47,670 MW, and the output on April 26 reached 994 million kWh. Compared to the same period last year, the highest capacity of the national power system increased by 20.2%, while the northern region increased by 19.9%.
Mr. Tran Viet Hoa – Director of Electricity Regulatory Authority (Ministry of Industry and Trade):
Concerns about its impact on traditional electricity sources!
In several countries with high solar power development, there is still surplus, leading to frequent cuts in renewable energy sources, increasing the cost of operating the power system, and wasting social resources.
The surplus capacity in some hours does not mean that the power system has surplus capacity in general because it can fall into the situation: it is still lacking when the system’s load is needed (evening), but there is a surplus when the system’s load is not needed (noon), it must be cut. Thus, having too much RTGS will directly affect renewable energy sources and traditional electricity sources.
Dr. Nguyen Quoc Viet, Deputy Director of the Institute of Economic and Policy Research (VEPR):
Going against market principles
Investing in RTGS systems but not being able to sell to other individuals or organizations or to the grid at VND0 is against market principles. With such a proposed policy, attracting people and businesses to invest in RTGS will be very difficult. For households, a rooftop solar power system can cost from several tens to hundreds of millions of dongs, depending on capacity. In regions like the North, people will be very hesitant to invest in power systems if they cannot sell excess electricity.
We build incentive mechanisms, but have the introduced mechanisms achieved that goal or not? There needs to be a mechanism for EVN to repurchase part of the surplus electricity from households that have invested in RTGS. If the electricity is not sold to EVN, the option of allowing people to deduct output in the payment period or calculate it at a certain percentage compared to the grid electricity purchase price can be considered.
