A wind farm in Ninh Thuân Province. It’s time for Việt Nam to develop a more competitive pricing for renewable energy market as the feed-in-tariff (FiT) mechanism is no longer appropriate. — VNA/VNS Photo

HÀ NỘI — It’s time for Việt Nam to develop more competitive pricing for the renewable energy market, as the feed-in-tariff (FiT) mechanism is no longer appropriate, according to the Ministry of Industry and Trade.

FiT was introduced to support early development of renewable energy sources by providing a guaranteed, above-market price for producers to sell energy back to the grid.

The ministry said that FiT should be applied within a certain period of time in order to encourage investments in renewable energy.

Now, Việt Nam has seen a significant rise in the number of renewable energy projects. It’s time to develop a more competitive pricing mechanism to increase efficiency in the system and ensure competition as well as a stable and sustainable energy supply.

A renewable energy price framework that is flexible and appropriate to developments in each period should be planned, according to the ministry.

In Việt Nam, FiT prices are valid for 20 years. For solar projects that were put into operation before December 21, 2020, the FiT price is 7.09 cents per kWh for ground-mounted solar power projects, 7.69 cents for floating solar power and 8.38 cents for rooftop solar.

For wind power projects that started operations before November 1, 2011, the FiT price is 9.8 cents per kWh for offshore and 8.5 cents for onshore wind energy.

According to Việt Nam Electricity, as of May 23, 81 out of 85 renewable energy projects with a total capacity of 4.597 MW had sent documents for electricity price negotiations.

Negotiations for power purchase agreements are completed for 63 projects with a total capacity of 3.429 MW.

Among them, 29 projects with a total capacity of 1,577 MW completed procedures to begin commercial operations and generate electricity to the grid with a total output of around 2.597 billion kWh as of May 23. — VNS