MINISTRY OF INDUSTRY AND TRADE -------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 13/2017/TT-BCT	Hanoi, August 03, 2017

 

CIRCULAR

ON AMENDMENTS TO CERTAIN ARTICLES OF THE CIRCULAR NO. 56/2014/TT-BCT ON ELECTRICITY PRICING AND PROCEDURES FOR INSPECTION OF POWER PURCHASE AGREEMENTS; CIRCULAR NO. 30/2014/TT-BCT ON OPERATION OF COMPETITIVE ELECTRICITY GENERATION MARKET AND CIRCULAR NO. 57/2014/TT-BCT ON METHODS AND PROCEDURES FOR DEVELOPMENT AND ISSUANCE OF ELECTRICITY PRICE BRACKET

Pursuant to the Government’s Decree No. 95/2012/ND-CP dated November 12, 2012 on functions, tasks, power and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Law on Electricity dated December 03, 2004; Law on Amendments to certain articles of the Law on Electricity dated November 20, 2012;

Pursuant to the Government’s Decree No. 137/2013/ND-CP dated October 21, 2013 specifying implementation of certain articles of the Law on Electricity and Law on Amendments to certain articles of the Law on Electricity;

Pursuant to the Decision No. 63/2013/QD-TTg dated November 08, 2013 by the Prime Minister on roadmap, requirements and structure of electricity industry to form and develop levels of electricity market in Vietnam;

At the request of the Director of the Electricity Regulatory Authority of Vietnam,

The Minister of Industry and Trade promulgates a Circular on amendments to certain articles of the Circular No. 56/2014/TT-BCT dated December 19, 2014 by the Minister of Industry and Trade on electricity pricing and procedures for inspection of power purchase agreements (PPAs); Circular No. 30/2014/TT-BCT dated October 02, 2014 by the Minister of Industry and Trade on operation of competitive electricity generation market and Circular No. 57/2014/TT-BCT dated December 19, 2014 by the Minister of Industry and Trade on methods and procedures for development and issuance of electricity price bracket.

Article 1. Amendments to certain articles of the Circular No. 56/2014/TT-BCT dated December 19, 2014 by the Minister of Industry and Trade on electricity pricing and procedures for inspection of PPAs (hereinafter referred to as "Circular No. 56/2014/TT-BCT”):

1. Clauses 10, 17, 18, 19, 20 and 21 Article 2 shall be amended as follows:

“10. “base year” means the year in which total investment in the project is approved for the first time.

17. “coal import agreement” is an agreement reached by and between an generating unit eligible for coal import permitted by a competent state authority and a coal company in a foreign country in order to provide coal for the power plant, concluded in line with regulations to ensure competitive and transparent prices.

18. “imported coal transport agreement” is an agreement reached by and between the generating unit and a carrier transporting imported coal to the power plant, concluded in line with regulations to ensure competitive and transparent prices.

19. "domestic coal purchase agreement" is an agreement reached by and between the generating unit and a coal company in Vietnam that trades in domestic coal or imports coal to provide it for the power plant, concluded in line with regulations to ensure competitive and transparent prices.

20. “domestic coal transport agreement” is an agreement by and between the generating unit and a carrier transporting coal to the power plant in the territory of Vietnam, concluded in line with regulations to ensure competitive and transparent prices.

21. "construction commencement date" is the date stated in the notice that the investor sends to a construction licensing authority according to regulations of the Circular No. 15/2016/TT-BXD dated June 30, 2016 by the Ministry of Construction on issuance of construction permits or amended or replaced documents".

2. Point a Clause 2 Article 5 shall be amended as follows:

“a) Total investment shall be determined on the basis of the total first investment; expenses for investment, upgrading of equipment to maintain operation of power plants after 20 years of commercial operation shall not be included in the project’s total investment."

3. Clause 1 Article 7 shall be amended as follows:

“1. Components of variable price revised on the basis of changes to cost of primary fuel of the power plant in the base year  (VND/kWh) shall be determined as follows:

Where

: Average heat rate of primary fuel agreed upon by both parties on the basis of equipment specifications of the manufacturer or warranty specifications of the EPC contractor or testing results on the engineering department or the power plant carried out by a testing unit authorized by a competent state authority and calculated according to the load prescribed in Appendix No. 1 attached to the Circular No. 56/2014/TT-BCT (kg/kWh or BTU/kWh);

For the power plant using coal under multiple agreements: Basic coal heating value (NT₀) using average heat rate shall be calculated according to the weighted average of volume and coal heating value that is converted into gross dry heating value and is mentioned in coal purchase agreements (kcal/kg).

: Cost of primary fuel in the base year shall be regulated as follows:

- For coal stated in the domestic coal purchase agreement: The coal price is the price from the day on which the coal provider loads the coal, including loss, management and insurance expenses (if any), excluding freight (VND/ton) and shall be converted into VND/kg. If the coal purchase agreement fails to separate the fuel freight, the fuel price in the base year shall be equal to the price stated in the domestic coal purchase agreement;

- For the coal stated in the coal import agreement or coal taken from multiple agreements: The basic coal price applying to calculate the price of PPA shall be determined according to coal purchase agreements mentioned in Clause 15 Article 1 herein;

- For gas: The gas price is the price of gas at the mine (VND/BTU)."

4. Article 8 shall be amended as follows:

"Article 8. Determination of primary fuel freight of thermal power plants

Primary fuel freight (VND/kWh) of the power plant in the base year (P_b^vc) shall be determined as follows:

Where

: Average heat rate of primary fuel for the coal-fired thermal power plant (kg/kWh) or average heat rate of primary fuel for the gas turbine plant (BTU/kWh), and determined in accordance with Clause 1 Article 7 of the Circular No. 56/2014/TT-BCT ;

: Primary fuel freight for electricity generation in the base year and expressed as VND/ton or VND/kg for coal or in VND/BTU for gas.

For coal stated in the coal import agreement or coal taken from multiple agreements: The basic coal freight used to calculate the price of PPA under the coal transport agreements mentioned in Clause 15 Article 1 herein."

5. Point b Clause 2 Article 14 shall be amended as follows:

"b) Components of fixed operation and maintenance cost (FOMC) of labor cost in month t, year j () shall be determined as follows:

- If the wage used for calculation is equal to the regional minimum wage, components of FOMC by the labor cost (VND/kWh) shall be determined as follows:

Where

: FOMC by labor cost determined according to Clause 2 Article 6 of the Circular No. 56/2014/TT-BCT (VND/kWh);

: Regional minimum wage at the time for payment in month t, year j (VND/person/month);

: Regional minimum wage in the base year (VND/person/month).

- If the wage used for calculation is higher than the regional minimum wage or total labor cost (TCnc) calculated according to cost of labor working in the power plant, the components of FOMC by labor cost (VND/kWh) shall be determined as follows:

Where

: FOMC by labor cost determined according to Clause 2 Article 6 of the Circular No. 56/2014/TT-BCT (VND/kWh);

i: Inflation rate of components of operation and maintenance cost by the consumer price index (CPI) in Vietnam in year (l-1) over year (l-2) but not exceeding 2.5%/year, by the CPI in December of the year preceding year j, and published on the website of the General Statistics Office of Vietnam;

l: Ordinal number of the payment year determined from the base year (for the base year l = 1, i₁ = 0).”

6. Point a Clause 3 Article 14 shall be amended as follows:

“a) Components of variable price revised on the basis of changes to cost of primary fuel (coal or gas) of the power plant in month t, year j  (VND/kWh) shall be determined as follows:

Where

: Components of variable price revised on the basis of changes to cost of primary fuel (coal or gas) of the power plant in the base year prescribed in Clause 1 Article 7 of the Circular No. 56/2014/TT-BCT (VND/kWh);

k_HS,j: Productivity decline rate in year j (%);

: Price of primary fuel (coal or gas) for electricity generation at the time for payment in month t, year j, expressed as VND/ton for coal or VND/BTU for gas;

For the coal stated in the coal import agreement or coal taken from multiple agreements: The coal price at the time for payment in month t, year j shall be subject to the provision of Clause 15 Article 1 herein;

: Price of primary fuel (coal or gas) for electricity generation in the base year that is determined according to the provision of Clause 1 Article 7 of the Circular No. 56/2014/TT-BCT and expressed as VND/ton for coal or VND/BTU for gas.".

7. Clause 4 Article 14 shall be amended as follows:

 “4. Primary fuel freight of the power plant in month t, year j  (VND/kWh) shall be determined as follows:

Where

: Primary fuel freight of the power plant in the base year determined according to the provision of Article 8 of the Circular No. 56/2014/TT-BCT (VND/kWh);

: Primary fuel freight (coal or gas) at the time for payment in month t, year j (expressed as VND/ton for coal or VND/BTU for gas);

For the coal stated in the coal import agreement or coal taken from multiple agreements: The coal price at the time for payment in month t, year j shall be subject to the provision of Clause 15 Article 1 herein;

: Primary fuel freight (coal or gas) in the base year expressed as VND/ton for coal or VND/BTU for gas.”.

8. Point b Clause 2 Article 15 shall be amended as follows:

"b) Components of the FOMC by labor cost in month t, year j () shall be determined as follows:

- If the wage used for calculation is equal to the regional minimum wage, the FOMC by the labor cost (VND/kWh) shall be determined according to the following formula:

Where

: FOMC by labor cost determined according to the provision of Clause 2 Article 11 of the Circular No. 56/2014/TT-BCT (VND/kWh);

L_{min, j,t}: Regional minimum wage at the time for payment in month t, year j (VND/person/month);

L_min,b: Regional minimum wage in the base year (VND/person/month).

- If the wage used for calculation is higher than the regional minimum wage or total labor cost (TCnc) calculated according to cost of labor working in the power plant, components of FOMC by labor cost (VND/kWh) shall be determined as follows:

Where

: FOMC by labor cost determined according to the provision of Clause 2 Article 11 of the Circular No. 56/2014/TT-BCT (VND/kWh);

i: Inflation rate of the operation and maintenance cost by the consumer price index (CPI) in Vietnam in year (l-1) over year (l-2) but not exceeding 2.5%/year, by the CPI in December of the year preceding year j, and published on the website of the General Statistics Office of Vietnam;

l: Ordinal number of the payment year determined from the base year (for the base year l = 1, i₁ = 0).”.

9. Clause 1 Article 20 shall be amended as follows:

“1. The investor of the power plant shall make an application for negotiation on the PPA to send to the Buyer to negotiate and carry out procedures for assessment and approval in order to conclude such agreement before the construction commencement date or before the day on which the power plant conducts test run on transmitting electricity to the national power system.

10. Point d Clause 1 Article 21 shall be amended as follows:

“d) Decision on approval of total first investment of the project and main contents in the fundamental design of the investment project related to PPA negotiation and the fundamental design assessment report."

11. Clause 1 Article 26 shall be amended as follows:

“1. Request the Electricity Regulatory Authority of Vietnam (ERA) for inspection of the PPA, complete the conclusion thereof before the construction commencement date of or before the day on which the power plant conducts test run on transmitting electricity to the national power system; be responsible for ensuring accuracy, appropriateness and validity of provided figures and documents.”

12. Clause 1 Article 27 shall be amended as follows:

“1. The investor of the power plant shall:

a) Negotiate the PPA and conclude it before the construction commencement date or before the day on which the power plant conducts test run on transmitting electricity to the national power system;

b) Provide adequate information, take responsibility, ensure accuracy, appropriateness and validity of figures and documents provided to relevant authorities during the negotiation and inspection of the PPA.

c) Pay all costs arising from the execution of the construction work before the day on which the PPA is officially concluded.

d) Before concluding new coal transport agreements (including domestic and imported ones) or new coal freights stated in coal purchase agreements, the investor shall cooperate with a coal carrier a coal trader in providing legal documents related to the process of selecting coal carriers and documents for calculating, separating coal prices and coal freights (in case of transporting coal by conveyor belts) to the EVN, as the basis for comments on coal freights during making payments for coal fuel costs. The investor shall be responsible for concluding the coal transport agreement in accordance with regulations to ensure competitive and transparent prices.

13. Clauses 2b, 2c and 2d shall be added to Article 28 after Clause 2a as follows:

“2b. For power plants commenced before February 03, 2015 having PPAs concluded but electricity prices have expired, it is allowed that the total investment already agreed in the applicable electricity price scheme to calculate electricity prices of the plant according to the Circular No. 56/2014/TT-BCT. Within one year from the day on which a revised agreement is concluded, the investor of the power plant shall finish making the financial statement on the investment in the construction work(s), complete the negotiation on the PPA and electricity prices with the EVN according to relevant regulations.

2c. Electricity projects whose PPAs have been concluded according to the determination prescribed in the Circular No. 56/2014/TT-BCT shall continuously apply to provisions of the Circular No. 56/2014/TT-BCT and the relevant parties may request re-calculation of electricity prices according to approved investment when it is available.

2d. New power plant projects commenced before the effective date of this Circular shall continuously apply to the provisions on the total investment used for calculating electricity prices under the Circular No. 56/2014/TT-BCT and Circular No. 51/2015/TT-BCT .”

14. Clause 9 Article 2 and Clause 5 Article 3 shall be annulled.

15. Clause 1 Article 22 shall be annulled.

16. Appendix 1a shall be added as follows:

“Appendix 1a

COAL PRICES AND FREIGHTS FOR POWER PLANTS

1. Coal prices and basic coal freights

a) The basic coal price (VND/ton) shall be converted into VND/kg and determined as follows:

Where

P_0,m: For the domestic coal purchase agreement, the coal price is stated in Clause 3 Article 1 herein.

For the coal import agreement: The coal price shall be the price including FOB price determined according to the coal import agreement, loss, management charges and insurance fees (if any) agreed upon by the electricity buyer and seller and import duties and charges shall be subject to regulations but shall not include the coal freight or coal transshipment price. If the coal import agreement fails to separate the freight, the fuel price in the base year shall be equal to the price stated in such agreement;

 X₀: Foreign exchange rate between VND and foreign currency from the day on which the basic coal price is determined.X₀ = 1 if coal is purchased domestically;

V_m: Coal volume stated in coal purchase agreements m (ton);

M: Total number of coal purchase agreements.

b) The basic coal freight (VND/ton) shall be expressed as VND/kg and equal to the weighted average of volume and the coal freight under the imported coal transport agreement or domestic coal transport agreement, Where

For a domestic coal transport agreement, the coal freight is the freight or the freight of coal from the domestic transshipment warehouse of the coal trader to the power plant as stated in the domestic coal transport agreement.

For an imported coal transport agreement, the coal freight with the VND and foreign currency exchange rates at the time for determining the freight of the basic coal shall be agreed upon by both parties in accordance with the imported coal transport agreement.

For the coal purchase agreement already included the coal freight: If the coal freight is able to be separated, it shall be determined according to terms of the coal purchase agreement. If the coal freight fails to be separated, it shall be 0 (zero).

2. Coal prices and coal freights at the time for payment

a) The coal price (VND/ton) at the time for payment shall be determined as follows:

Where

P_{m, j,t}: Coal price at the time for payment calculated by weighted average of the coal volume (VND/ton) determined as follows:

P_q: The coal price determined according to the coal invoice issued by the seller in line with the coal import agreement or domestic coal purchase agreement m arising in the payment month t, including the cost components mentioned in Point a Clause 1 this Appendix. For the domestic coal purchase agreement, the exchange rate X_j,t in this case shall be equal to 1);

X_j,t: Foreign exchange rate between VND and foreign currency for purchasing coal in month t, determined at the time of issuing coal invoices at the selling rates of a commercial bank agreed upon by the seller and the buyer;

NT₀: Basic coal heating value (kcal/kg) stated in Clause 3 Article 1 herein;

NT_{j, t}: Average coal heating value of coal purchase agreements m in month t (kcal/kg) equal to weighted average of coal volume V_q and actual value of coal heat delivered and converted into total dry heating value of the coal purchase agreement, determined by the coal invoice arising in the month t and the verified coal quality (kcal/kg).

Q: Total number of valid coal invoices in month t;

V_q: Volume of coal (ton) calculated under coal purchase agreements in the coal invoice q arising in month t.

b) The coal freight (VND/ton) at the time for payment shall be determined as follows:

Where

NT₀: Basic coal heating value (kcal/kg) stated in Clause 3 Article 1 herein;

NT_{j, t}: Average coal heating value of the coal purchase agreement m in month t (kcal/kg) mentioned in Point a this Section;

: Coal freight at the time for payment (VND/ton) determined according to weighted average of coal freight and volume mentioned in coal transport invoices arising in month t stated in the imported coal transport agreement or domestic coal transport agreement.

For the coal purchase agreement including the coal freight: If the coal freight is able to be separated, it shall be determined according to terms of the corresponding coal purchase agreement. If the coal freight fails to be separated, it shall be 0 (zero).

17. Clause 2 Article 2 of the model PPA attached to the Circular No. 56/2014/TT-BCT (Appendix No. 3) shall be amended as below:

“2. Term of Agreement

Term of agreement shall be determined from the effective date of the Agreement to 25 years inclusive from the commercial operation date of the power plant."

Article 2. Amendments to certain articles of the Circular No. 57/2014/TT-BCT dated December 19, 2014 by the Minister of Industry and Trade on methods and procedures for development and issuance of electricity price bracket (hereinafter referred to as "Circular No. 57/2014/TT-BCT"):

1. Clause 5 Article 2 shall be annulled.

2. Clause 3 Article 6 shall be amended as follows:

“3. Investment rate is the investment in one (01) kW of the standard power plant (on average) on the basis of the total initially approved investment or updated exchange rates at the time for calculation. Component costs of investment rate shall include:

a) Construction expenses including expenses for construction works or work items; destruction and demolition of old architectural materials; construction leveling; construction of temporary works; auxiliary works for construction; temporary housing on the construction site;

b) Costs of equipment including costs of purchase of technological equipment, training in plant operation; installation, test and calibration, transport, insurance, taxes and other related charges;

c) Costs of compensation for site clearance and relocation decided by a competent state authority; costs of reinforcement of work foundations;

d) Project management costs including costs of organizing and implementing project management from establishment of the project till the project is completed and put into operation;

dd) Construction consulting costs including costs of hiring consultants on survey, design, construction supervision, examination and verification and other relevant costs;

e) Other costs including working capital during test run of the plant, loan interests, costs of getting loans during the construction process and other necessary costs;

g) Provisional costs including costs of additional quantity of work and provision for inflation during the construction process."

Article 3. Amendments to certain articles of the Circular No. 30/2014/TT-BCT dated October 02, 2014 by the Minister of Industry and Trade on operation of competitive electricity generation market (hereinafter referred to as "Circular No. 30/2014/TT-BCT"):

1. Clause 50 Article 3 shall be amended as follows:

“50. “strategic multipurpose hydropower plant” is a power plant stated in the Decision No. 2012/QD-TTg dated October 24, 2016 by the Prime Minister on the list of big power plants playing an important role on economy, society and national security and the Decision No. 4712/QD-BCT dated December 02, 2016 by the Minister of Industry and Trade on the list of cooperation in operation between power plants and big ones playing an important role on economy, society and national security.”.

2. Clause 3 Article 17 shall be amended as follows:

“3. The variable cost of the thermoelectric generating set shall be determined as follows:

a) Where the value of heat rate is determined, the variable cost of generating set shall be determined as follows:

Where

: Composition of variable prices adjusted for fluctuation of primary fuel costs (coal or gas) of the power plant (VND/kWh);

: Composition of variable prices adjusted for fluctuation of the cost of fuel (oil) of the power plant (VND/kWh);

: Composition of variable prices adjusted for other fluctuations of power plants (VND/kWh).

- The component of variable prices adjusted for the fluctuation of the primary fuel expense of the power plant  (VND/kWh), determined according to the following formula:

Where

: Average heat rate of primary fuel agreed upon by both parties on the basis of equipment specifications of the manufacturer or warranty specifications of the EPC contractor or test run on the generating set or the power plant carried out by a testing unit authorized by a competent state authority and calculated in proportion with the load prescribed in Appendix No. 1 attached to the Circular No. 56/2014/TT-BCT (kg/kWh or BTU/kWh);

For the power plant using coal taken from multiple agreements: Basic coal heating value (NT₀) using average heat rate shall be calculated according to the weighted average of volume and coal heating value that is converted into gross dry heating value and is mentioned in coal purchase agreements (kcal/kg).

: Primary fuel price including primary fuel freight.

- The component of variable prices adjusted for the fluctuation of the primary fuel expense of the power plant  (VND/kWh) shall be determined according to the following formula:

Where

: Average heat rate of secondary fuel (oil) agreed upon by both parties on the basis of the manufacturer's specifications (kg/kWh);

: Secondary fuel (oil) including freight and other charges (VND/kg).

- The average fuel consumption of fuel (primary or secondary) provided by the single buyer and adjusted for performance deterioration. In cases where the agreed thermal consumption is the average thermal loss of the project lifetime, it shall not be adjusted according to the coefficient of performance decline. Where an agreement or negotiation document only has a characteristic line at the rates of load, the heat rate of the generating set shall be determined at the level corresponding to electricity generating for several years from the power plant stated in the PPA.

In case the heat rate of the thermoelectric generating set is not specified in the agreement or in the negotiation documents of the PPA, the heat rate of the power plant is equal to heat rate of a power plant in the same group according to the electricity generation technology and the installed capacity. The system and market operator (SMO) shall be responsible for calculating the thermal power consumption of the standard power plant;

- The coefficient of performance deterioration of a thermoelectric generating set shall be equal to that stated in the agreement or in the electricity purchase negotiation document submitted by the single buyer.

In case the thermal power plant does not have data on the coefficient of performance deterioration in the agreement or in the negotiation document of the PPA, the coefficient of performance deterioration of the standard power plant shall be applied in the same group as such power plant that is determined by the SMO;

- The component of variable prices adjusted for other fluctuations of the power plant  (VND/kWh) shall be determined according to the following formula:

Where

C_vlp: Total annual cost of auxiliary materials of the power plant determined by the volume and unit price of auxiliary materials used for electricity generation (VND);

C_kd: Total initial costs including fuel cost and other initial costs (VND);

C_k: Annual cost of maintenance and repairs calculated on the basis of the total investment for construction and installation and equipment of the power plant, the rate of regular repair expenses stated in Appendix No. 1 of the Circular No. 56/2014/TT-BCT (VND);

P_t: Total capacity of the power plant (kW);

k_CS: Average capacity loss rate calculated for the entire economic life of a power plant determined according to the provision of Point c Clause 2 Article 5 herein (%);

T_max: Maximum operating time of the average annual capacity for the whole life of the power plant project (hour) and specified in Appendix No. 1 of the Circular 56/2014/TT-BCT .

b) If heat rate is not specified in the agreement or in the negotiation document of the PPA and no standard power plant in the appropriate group, the variable cost of the generating set shall be equal to the variable electricity price (including the primary fuel freight) stated in the agreement updating factors affecting the variable price of year N according to the method negotiated in the agreement."

3. Clause 1 and Clause 2 Article 22 shall be amended as follows:

“1. The quoted ceiling price for the thermoelectric generating set shall be determined as follows:

P_tr = (1 + K_DC) x (P_NLC x H_RC + P_NLP x HR_P)

Where

P_tr: quoted ceiling price (VND/kWh);

K_DC: Coefficient of the ceiling price based on classification results of the thermoelectric generating set. For thermoelectric generating set with normal run: K_DC = 0%; back-up thermoelectric generating set: K_DC = 5%; peak thermoelectric generating set: K_DC = 20%;

P_NLC: Primary fuel price (including primary fuel freight) of the thermoelectric generating set (VND/kCal or VND/BTU);

P_NLP: Price of secondary fuel of thermoelectric generating set (VND/kCal or VND/BTU);

HR_C: Primary fuel consumption at average thermoelectric generating set (BTU/kWh or kCal/kWh);

HR_P: The secondary fuel consumption at the average load of the thermoelectric generating set (BTU/kWh or kCal/kWh).

2. If heat rate is not specified in the agreement or in the negotiation document of the PPA and no standard power plant in the same group:

a) The quoted ceiling price for the thermoelectric generating set shall be determined according to the following formula:

Where

P_tr: Quoted ceiling price for thermoelectric generating set (VND/kWh);

K_DC: Coefficient of the ceiling price based on classification results of the thermoelectric generating set. For thermoelectric generating set with normal run: K_DC = 0%; back-up thermoelectric generating set: K_DC = 5%; peak thermoelectric generating set: K_DC = 20%;

: The variable price (including the primary fuel freight) for year N under the PPA of the power plant (VND/kWh).

b) The variable price (including the primary fuel freight) used to calculate the bid price ceiling of the quotation is the estimated variable price for year N provided by the single buyer to the SMO.

4. Article 37a shall be added after Article 37 as follows:

“Article 37a. Adjustment of hourly contracted quantity of energy (Qc)

1. Cases where Qc may be adjusted:

a) The boiler of the coal-fire power generating set having multiple boilers breaks down or the generating set of the power plant breaks down;

b) The boiler of the coal-fire power generating set having multiple boilers or the generating set of the power plant prolongs the time for repair compared to the approved schedule and is included in the hourly Qc.

2. In the cases where there is adequate proof to certify cases prescribed in Point a Clause 1 this Article, the hourly Qc shall be adjusted according to the following rules:

a) Where the time of breakdown does not exceed 72 hours (equivalent to 72 transaction cycles): No adjustment of Qc of this power plant applied;

b) If the time of breakdown is more than 72 hours:

- During the period from the time the breakdown happening to the 72^nd transaction period: Remain the Qc allocated to the power plant;

- During the period from the 73^rd transaction period to the time the generating set is repaired and available to use:

+ If actual electricity generating at the delivery point (Qmq) of the plant is lower than the Qc of the plant in this period, the hourly Qc shall be adjusted to the Qmq of the power plant;

+ If the Qmq of the power plant is higher than or equal to the Qc of the power plant in this period, the Qc shall not be adjusted.

3. In cases where there is adequate proof to certify cases specified in Point b Clause 1 this Article, the hourly Qc shall be adjusted according to the following rules:

In prolonged repair cycles, if there is a cycle in which the Qmq is lower than the Qc of the power plant, the hourly Qc in those cycles shall be adjusted to the Qmq of the plant.

4. The generating unit directly making transactions shall cooperate with the SMO to verify the events specified in Clause 1 this Article as prescribed in the joint cooperation process of events used for making payments on the market issued by the Director of the ERA and sent to the single buyer and directly to the generating unit for use as a basis for adjusting the hourly Qc of the power plant. For the cases where the boiler breakdown of the coal-fire power generating set having multiple boilers are confirmed:

a) If there is adequate data from the distributed control system (DCS) or other equivalent control systems for this event: Perform event validation based on these data;

b) In the absence of data from DCS or other equivalent control systems: Use data from other data sources for each specific case according to the joint cooperation process of events used for making payments on the market issued by the Director of the ERA.

5. The single buyer and direct generating unit shall re-conclude the monthly and hourly Qc of the plant which has been adjusted in accordance with Clause 1, Clause 2 and Clause 3 this Article.”

5. Clause 12 and Clause 14 Article 80 shall be amended as follows:

“12. For the power plant having electricity generating sets separated from the national power system and connected to the electricity grid purchasing power from abroad, based on the year-ahead forecast carried out by the SMO, year-ahead participation in the electricity market and payment made to this power plant shall be regulated as follows:

a) Where the year-ahead forecast, the power plant having electricity generating sets connected to the electricity grid purchasing power from abroad for 180 days or more, such power plant shall be separated out of the electricity market in the following year. All electricity generated by the plant in the following year shall be paid according to electricity prices stated in the PPA already concluded with the single buyer;

b) In case of year-ahead forecast and the power plant having their connected power grids purchasing power from abroad for less than 180 days, such power plant shall for participate in the electricity market in the following year (the direct generating unit). For transaction days in a year that the power plant has generating sets separated from the national power system and connected to the electricity grid purchasing power from abroad, total electricity generating from the power plant on the delivery date and generating sets having cycles separated from the national power system and connected to the electricity grid purchasing power from abroad shall be paid according to electricity prices stated in the PPA concluded with the single buyer.

14. Where a power plant having generating sets involving in the test run of an automatic generation control (AGC) at the request of the SMO, the entire power plant shall be separated out of the electricity market, and the entire electricity of the plant transmitting to the grid in trial cycles shall be paid at the price of the PPA (full Pc) concluded with the single buyer. Before December 01 of year N-1, the SMO shall make and publish the list of electricity generating sets planned to participate in the test run of the AGC in year N for members engaging in the electricity market.”

6. Chapter VIa (after Chapter VI) of the Circular No. 30/2014/TT-BCT shall be added as follows:

"Chapter VIa

MECHANISM FOR PARTICIPATING IN COMPETITIVE ELECTRICITY GENERATION MARKET OF POWER PLANTS LOCATED IN INDUSTRIAL PARKS

Article 88a. Responsibility to participate in the electricity market

An generating unit possessing the power plant located in an industrial park (hereinafter referred to as “electricity generator”) with a capacity of over 30 MW and connected to the national power system and selling part of electricity to the national power system (except for the cases where the PPA has been concluded before January 01, 2016 and such PPA still remains effective after January 01, 2016 according to the provision of Clause 1 Article 1 of the Circular No. 51/2015/TT-BCT dated December 29, 2015 by the Minister of Industry and Trade on amendments to certain articles of the Circular No. 30/2014/TT-BCT dated October 02, 2014 by the Minister of Industry and Trade on operation of the competitive electricity generation market and the Circular No. 56/2014/TT-BCT dated December 19, 2014 by the Minister of Industry and Trade on determination of electricity pricing and procedures for inspection of power purchase agreements (hereinafter referred to as “Circular No. 51/2015/TT-BCT”) shall:

1. Register to participate in the electricity market under the Circular No. 30/2014/TT-BCT and Clause 2, Clause 3 and Clause 4 Article 1 of the Circular No. 51/2015/TT-BCT .

2. Invest in and complete a system of equipment for connection to the electricity market information system, SCADA/EMS and electricity metering system to determine electricity generating from each generating set and the local load to satisfy requirements for operation of the electricity market stipulated in Clause 5 Article 4 of the Circular No. 30/2014/TT-BCT .

3. Comply with regulations on operating the competitive electricity generation market of the Circular No. 30/2014/TT-BCT and Circular No. 51/2015/TT-BCT when entering the electricity market.

4. Conclude PPAs according to provisions of the Circular No. 56/2014/TT-BCT and the Circular No. 51/2015/TT-BCT and this Circular.

Article 88b. Year/month/week-ahead operation plans

1. The generating unit shall provide the SMO with data used for calculation and preparing year/month/week-ahead operation plans under provisions of Chapter IV of the Circular No. 30/2014/TT-BCT , Article 1 of the Circular No. 51/2015/TT-BCT and regulations stated in procedures for management and operation of information technology systems on the electricity market operation and information about the electricity market published by the Director of the ERA.

2. Before July 15 every year, the generating unit shall provide the SMO with the estimated internal load for each month of the following year.

3. Before the 20^th day of each month, the generating unit shall provide the SMO with the estimated internal load of the following month.

4. The SMO shall calculate and publish the month-ahead quotation in the following month for the power plant located in the industrial park participating in the electricity market according to the provision of Article 35 of the Circular No. 30/2014/TT-BCT and Clause 7 Article 1 of the Circular No. 51/2015/TT-BCT .

Article 88c. Electricity market operation in on a day-ahead and hour-ahead basis

1. The generating unit shall comply with regulations on electricity market operation on a day-ahead and hour-ahead basis mentioned in Chapter V of the Circular No. 30/2014/TT-BCT .

2. Before 2 p.m. on day D-2, the generating unit shall provide the SMO with the chart of the estimated internal load of the power plant located in the industrial park in each transaction cycle of day D. The tolerance in the estimated internal load shall be +/- 10%. During test run or new investment, the tolerance in the estimated internal load shall be +/- 15%.

3. Day-ahead pricing: The generating unit shall make and send to the SMO the price quoted for the power plant located in the industrial park stipulated in Article 41 and Article 45 of the Circular No. 30/2014/TT-BCT and the generating unit shall:

a) Offer to sell the entire available capacity of each electricity generating set;

b) Offer price for internal load:

- In the cases where the internal load is higher than the lowest stable capacity of a generating set, it shall be offered at VND 0/kWh for estimated electricity to be supplied for the internal load;

- In the cases where the internal load is lower than the lowest stable capacity of a generating set, it shall be offered at VND 0/kWh for the lowest stable electricity generation capacity;

c) Remaining excess capacity: The offered price shall comply with the floor price quoted by the thermoelectric generating set specified in Article 10 of Circular No. 30/2014/TT-BCT and the ceiling price quoted by the SMO according to the provision of Clause 4 Article 88b this Chapter;

d) Use one or multiple generating sets to offer prices for part of the capacity that meets the internal load. Where the capacity of a generating set fails to meet the internal load, the generating unit may use the quotation of the next generating set to offer the price for satisfying the internal load;

dd) The generating unit shall develop the quotation in line with the specifications of each generating set, the specifications mentioned in the PPA and those related to the steam load off the plant (if any).

4. Hour-ahead pricing: The generating unit shall make and send to the SMO the hour-ahead quotation for the power plant located in the industrial park and the internal load updated in the following hour. The generating unit shall update the hour-ahead quotation and internal load at least 45 minutes prior to the transaction cycle.

Article 88d. Real-time scheduling and mobilization

1. The SMO shall schedule the mobilization of power plants located in the industrial park on the basis of the quotation made by the generating unit in accordance with the provisions of Sections 1, 2 and 3 Chapter V of the Circular No. 30/2014/TT-BCT .

2. Before the transaction cycle, the generating unit shall update the actual speed of electricity generating sets (in the hour-ahead quotation) to serve real-time scheduling, mobilization and calculation of payments on the electricity market.

3. In cases where the electricity source is overloaded, the SMO shall mobilize the power plant not lower than the local charge. Where the on-site load is less than the minimum stable power, the SMO shall mobilize the plant with the minimum stable capacity of the unit.

Article 88dd. Payment calculation in the electricity market

1. Metering of electricity generating from power plants serving payment in the electricity market shall include:

a) Electricity paid in accordance with the price offered for power plants located in the industrial park with offered prices higher than ceiling prices on the market (Qbp) in the transaction cycle i: Determined according to the provision of Clause 3 Article 70 of the Circular No. 30/2014/TT-BCT ;

b) Increased generating electricity (Qcon) in the transaction cycle i: Determined according to the provision of Clause 4 Article 70 of the Circular No. 30/2014/TT-BCT ;

c) Electricity generating different from the moderation order (Q_du) in the transaction cycle i: Determined according to the provision of Clause 2 Article 70 of the Circular No. 30/2014/TT-BCT and Clause 2 Article 47 of the process of scheduling mobilization of generating sets, real-time operation and calculation of payment on the electricity market issued by the Director of the ERA. The electric terminal meter shall be used to determine the error of the moderation order;

d) Electricity paid according to the system marginal price (SMP) in the transaction cycle shall be determined as follows:

- If Qdu_i > 0: Qsmp_i = Qm_i - Qdu_i - Qcon_i - Qbp_i

- If Qdu_i ≤ 0: Qsmp_i = Qm_i - Qcon_i - Qbp_i

Where

Qm_i: Electricity transmitting to the electric system in the transaction cycle i (determined according to electricity metered at the delivery point in the transaction cycle);

Qdu_i: Electricity generating different from the moderation order in the transaction cycle i;

Qbp_i: Electricity paid according to the price offered in the transaction cycle i to the power plant located in the industrial park with offering price higher than the ceiling price on the market (kWh);

Qcon_i: Increased generating electricity of the power plant located in the industrial park in the transaction cycle i (kWh);

dd) Electricity paid at the price of PPA different from the power plant located in the industrial park in each transaction cycle I shall be determined as follows:

Qc_i = Qhc_i × β

Where

Qc_i: Electricity paid at the price of the PPA in different types to the power plant located in the industrial park in each transaction cycle i (VND);

β: Rate of electricity paid at the price of PPA to the power plant located in the industrial park regulated by the ERA for each power plant located in the industrial park depending on the type of technology and geographic location.

Qhc_i: Electricity calibrated in the transaction cycle i (kWh) determined as follows:

- If Qdu_i > 0: Qhc_i = Qm_i - Qdu_i;

- If Qdu_i ≤ 0: Qhc_i = Qm_i.

Where

Qm_i: Electricity transmitting to the electricity system in the transaction cycle i (determined according to electricity metered at the delivery point in the transaction cycle).

2. The components of electricity used for payment on the electricity market under the provision of Clause 1 this Article shall be adjusted according to the provision of Article 71 of the Circular No. 30/2014/TT-BCT .

3. Payment for power plants located in the industrial park in each transaction cycle and payment cycle shall include:

a) Payment at SMP;

b) Payment for market capacity;

c) Payment made under the price of the PPA of different types;

d) Other payments (if any).

4. The payment at SMP for each transaction cycle shall be calculated as follows:

Rg_i = Rsmp_i + Rbp_i + Rcon_i + Rdu_i

Where

Rg_i: Payment at SMP to the power plant located in the industrial park in each transaction cycle i (VND);

Rsmp_i: Payment for electricity made according to the SMP to the power plant in the transaction cycle i calculated according to provisions of the Circular No. 30/2014/TT-BCT (VND);

Rbp_i: Payment for electricity made according to the offered price to the power plant offering a price greater than the ceiling price on the market in the transaction cycle i calculated in accordance with provisions of the Circular No. 30/2014/TT-BCT (VND);

Rcon_i: Payments for additional electricity generation in transaction cycle i are calculated in accordance with Circular No. 30/2014/TT-BCT (VND);

Rdu_i: Payment for electricity generation different from mobilized electricity under the moderation order in the transaction cycle i calculated in accordance with provisions of the Circular No. 30/2014/TT-BCT (VND);

β: The ratio of electricity to be paid under the agreement price to the plant located in the industrial park determined by the ERA for each power plant located in the industrial park according to the type of technology and geographic location.

5. Payment of market capacity for each transaction cycle shall be calculated as follows:

Rcan_i = Qm_i × CAN_i

Where

Rcan_i: Payment for capacity of the power plant located in the industrial park in each transaction cycle i (VND);

Qm_i: Electricity transmitting to the electricity system in the transaction cycle i (determined according to electricity metered at the delivery point in the transaction cycle);

CAN_i: Market capacity price in transaction cycle i (VND/kWh);

6. Payment made according to the price of the PPA in different types for each transaction cycle shall be calculated as follows:

Rc_i = Qc_i × (Pc - SMP_i - CAN_i)

Where

Rc_i: Payment made under the price of the PPA in different types to the power plant located in the industrial park in each transaction cycle i (VND);

Qc_i: Electricity paid according to the price of the PPA in different types to the power plant located in the industrial park in each transaction cycle i determined according to Point dd Clause 1 this Article (VND);

Pc: Price of the PPA (VND/kWh);

SMP_i: SMP in the transaction cycle i (VND/kWh);

CAN_i: Market capacity price in transaction cycle i (VND/kWh);

7. For other payments (if any), except for payment for initial expenses due to overflows stated in the provision of Article 80 of the Circular No. 30/2014/TT-BCT and Clause 24 of Article 1 of the Circular No. 51/2015/TT-BCT .

8. The generating unit shall calculate payments under the price of the PPA. The SMO shall calculate the electricity payment and the electricity market capacity.

9. The generating unit shall cooperate with the SMO and the electricity wholesaler in calculating the payment, comparing and checking the payment list and making payments in line with the procedures stated in Chapter VI of the Circular No. 30/2014/TT-BCT .”

Article 4. Clause 7, Clause 9 and Clause 19 Article 1 of the Circular No. 51/2015/TT-BCT dated December 29, 2015 by the Minister of Industry and Trade on amendments to certain articles of the Circular No. 30/2014/TT-BCT dated October 02, 2014 by the Minister of Industry and Trade on operation of competitive electricity generation market and the Circular No. 56/2014/TT-BCT dated December 19, 2014 by the Minister of Industry and Trade on electricity pricing and procedures for inspection of PPAs shall be annulled.

The EVN shall not make temporarily payment or pay for electricity bills to power plants when they are operating and transmitting electricity to the grid without official conclusion of PPAs. The EVN shall report to the Ministry of Industry and Trade and cooperate with generating units in mobilizing, operating and making payments for electricity bills to power plants in case of mobilization of such power plants to ensure electricity generation.

Article 5. Transitional clause

The term of PPAs concluded by power plant projects before the effective date of this Circular shall be changed according to the agreement term specified in Clause 16 Article 1 herein; other contents of the agreements and electricity prices shall remain unchanged.

Article 6. Effect

1. The Circular comes into force from September 19, 2017.

2. Any issues arising in the course of implementation shall be reported to the Ministry of Industry and Trade.

 

MINISTER Tran Tuan Anh