Solar investors signed petitions over COD concerns

Solar investors signed petitions over COD concerns

Thirteen foreign investors and fifteen domestic enterprises in the solar power sector submitted official petitions regarding the issue of commercial operation dates (COD) being granted without formal acceptance documents. Their primary concern was the risk of losing the initial electricity tariff they had been promised.

Two workers during maintenance of solar power at a farm located in the central highland province of Đăk Nông. VNA/VNS Photo Vũ Sinh

In their petitions, the investors argued that they had complied with all renewable energy regulations when their projects were granted COD. Despite this, since September 2023, many of these projects have faced indefinite payment delays or have only received partial payments under their power purchase agreements (PPA) with Vietnam Electricity (EVN) without any clear legal justification.  

The financial impact of this situation had been severe, with some projects struggling to meet debt repayment obligations to both domestic and international lenders, they said.

The investors called for authorities to recognise and uphold the original COD approvals granted to the affected projects. They also urged EVN to fully honour its contractual obligations by making complete and timely payments under the signed PPAs, ensuring that the financial stability of these projects was not jeopardised.

On the other hand, inspection findings concluded that the current situation had resulted in financial losses for EVN, which is wholly State-owned. As a corrective measure, the Ministry of Industry and Trade (MoIT) proposed that projects benefitting from FIT tariffs but found to be in violation should no longer be eligible for the preferential pricing. Instead, their electricity purchase prices would need to be recalculated according to regulations. The ministry also suggested reclaiming any FIT payments that had been incorrectly granted by offsetting them against future electricity sales. 

According to MoIT, a total of 173 grid-connected solar and wind power projects have encountered this issue. A pressing concern was the significant number of projects—over 90 out of the 173 affected—that had been receiving FIT1 or FIT2 rates despite securing acceptance certification only after 31 December 2020. 

Investors have claimed that regulatory violations related to acceptance certification under construction law should have resulted only in administrative fines and corrective measures rather than affecting the COD status of projects that had met all the conditions in force at the time. Since EVN had already granted COD approval to these projects, the investors believed the State-owned company were contractually obligated to purchase electricity from them at the agreed FIT rates. 

The petitions raised concerns over EVN’s delayed payments, stating that such actions cast doubt on its commitment to honouring signed PPAs. The issue had been under discussion for several years. In early 2022, EVN sought guidance from the Ministry of Construction and the MoIT to clarify the acceptance certification requirements for solar power projects before they could be brought into operation.

Industry experts said that other power generation sources had not faced similar issues because their electricity tariffs remained consistent under their negotiated PPAs with EVN. In contrast, many solar power projects had been developed in a rush to qualify for FIT1 and FIT2 incentives, which may have led some investors to overlook or fail to complete the required acceptance procedures in time. 

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