Post on 10-Jan-2022
Viet Nam Energy Partnership Group
TECHNICAL WORKING GROUP 3: ENERGY SECTOR REFORM
REPORT OF THE 6TH MEETING
Date: 23 April 2021
Location: Room 501, 5th Floor, D10 Khuat Duy Tien, Ha Noi
Time: 09:00 – 11:30
Key agenda points:
1. Update on the wholesale electricity market and discussion of what’s next in Viet Nam’s competitive market development
2. Draft Circular on the implemetation of the Pilot DPPA 3. Priority topics in energy sector reform 4. TAs needs and Initial ideas for next phase cooperation
Chair and Co-Chair:
• Mr. Pham Quang Huy, Deputy Director General of ERAV, Ministry of Industry and Trade (MOIT)
• Mr. Rahul Kitchlu, Energy Sector Coordinator, World Bank Vietnam
Agreed Conclusions and Actions: (See next page)
Agenda: See Annex 1
Participants: See Annex 2
Minutes: See Annex 3
Inputs: See Annex 4
2
AGREED CONCLUSIONS AND ACTIONS:
Conclusion / Decision Action
Technical Working Group stakeholders to provide comments on the draft Circular on the Pilot Implementation of the Direct Power Purchase between RE GENCO and the Consumer.
Link distributed via VEPG website and with the TWG invitation
Proposed TWG themes/activities for 2021 and next VEPG phase:
- Ancillary services, including
o Pricing mechanisms for the power storage systems and roadmap for the development for battery/ power storage systems
- Implications for clean energy transition, timelines and planning on gas, oil, and coal competitive markets
- Renewable energy certificates, carbon trading and impact of voluntary/mandatory greenhouse gas emissions reductions
VEPG Secretariat to continue to collect more inputs, comments, and recommendations for the TWG’s priorities in 2021 and beyond 2021.
The proposed areas for technical assistance for ERAV include
- Revision of the Electricity Law
- Detail market design of the Viet Nam Retail Electricity Market from 2023.
- Solutions for load management in the context of inclusion of LNG and higher percentage of RE (NLDC)
- Supply forecasting
The VEPG Secretariat to work with ERAV to develop a list of the TA and areas of cooperation and circulate among partners for the comments and responses.
TWG policy recommendations can support high level discussion on the future of the VEPG
The VEPG Secretariat to work to update the Policy Recommendations of the Technical Working Group and circulate among partners for comments and responses.
3
ANNEX 1 – Agenda
09.00-09.15 Log-In & Guidance for Webinar Users
14.05-14.20
09.15-09.30 Opening. Introduction & Secretariat Report
• Mr. Phạm Quang Huy / Mr. Rahul Kitchlu Opening and introduction to the agenda
• Ms. Nguyen Phuong Thao, VEPG Secretariat Report of the VEPG Secretariat
09.30-10.45 Competitive Power Markets
• NLDC: Update on the Implementation of the Competitive Power Markets 2020 • ERAV: Present the main contents of Competitive Energy Market Development
(Decision 2233) • USAID/V-LEEP: Draft Circular on the implementation of the Pilot DPPA • Roundtable discussion facilitated by chair and co-chair on topic
10.45-11.15 Priority topics in Energy Sector Reform in 2021; TAs needs and Initial
ideas for next phase cooperation
• Stakeholder discussion near-term and long-term priorities in energy sector reform including but not limited to policy recommendations, potential assistance/cooperation.
• Priority TA needs and initial ideas for next phase cooperation • Prepare next SC of VEPG
11.15-11.30 Wrap-up and Closing Remarks
• Mr. Phạm Quang Huy / Mr. Rahul Kitchlu
4
ANNEX 2 - Participants
Co-Chairs
• Mr. Pham Quang Huy, Deputy Director-General of Electricity and Renewable Energy Authority of Viet Nam (ERAV), Ministry of Industry and Trade (MOIT)
• Mr. Rahul Kitchlu, Energy Sector Coordinator, World Bank Vietnam
Participants
• Nguyễn Quang Minh, ERAV • Phạm Hoàng Phương Thảo, ERAV • Nguyễn Thị Tuyết Mai, ERAV • Nguyễn Kim Hưng, ERAV • Cao Trung Hải, ERAV • Chu Đức Dũng, ERAV • Lê Hải Nam, NLDC • Lê Đức Anh, Australia • *Hyungjung Lee, ADB • *Nina Seahra, Canada • Camilla Holbeck, Denmark • Loui Algren, DEPP • *Laura Lindoro, EUD • *Tran Thuy Duong, EUD • *Dang Hanh, ETP • *Julian Schultz, KfW • *Đỗ Thị Bích Ngọc, KfW • *Marshall Brown, GGGI • *Ximena Aristizabal Clavijo, GGGI • Phạm Quang Anh, GIZ • Trần Tiến Hòa, GIZ
• *Nguyen Hong Hanh, GIZ • *Le Thi Thoa, GIZ • *Pham Minh Uyên, Netherlands • *Arne-Kjetil Lian, Norway • *Nguyễn Song Ngọc, USAID/V-LEEP • *Gary Zieff, USAID/ V-LEEP • *Duc Nguyen, USAID/V-LEEP • Ananth Chikkatur, USAID/ V-LEEP • Elizabeth Gelb, USAID/ V-LEEP • *Yu Chong Nam, UNOPS • *Sirpa Jarvenpaa, UNOPS • *Sanawy, Amplus Solar • *Ojasvi Gupta, Amplus Solar
• Minh Nguyen, Enel Green • *Miro Nguyen, AES • *Dang Thi Huong Lan, AES • *Russell Marsh, EY • *Tran Hoang Anh, VIET SE • Ngô Tố Nhiên, VIET SE • *Luigi Angelo Serratto, Enel Green.
VEPG Secretariat
• Ms. Amber Sharick, VEPG Secretariat • Ms. Nguyễn Phương Thảo, VEPG Secretariat • Mr. Đỗ Quang Nhật, VEPG Secretariat
* Online Participant
2
ANNEX 3 - SUMMARY MINUTES
Agenda item Summary
Opening remarks, an overview of the agenda
• The Chair, Mr. Pham Quang Huy, Deputy Director General, ERAV welcomed the participants to the meeting. Mr. Huy emphasized that the TWG meeting is the venue for exchanges on challenges, proposing suggestions, and submitting to the higher level for consideration. He introduced the meeting agenda and expected active contribution from the meeting for the establishment of the power and energy market in a transparent manner.
• Mr. Rahul Kitchlu, World Bank/Co-chair of TWG emphasized that the TWG on sector reform addresses the core of energy sector engagement in Viet Nam: this topic, despite its very technical nature with a limited group of stakeholders, is essential for all aspects of planning and development in the sector. Mr. Kitchlu reiterated the World Bank’s commitment to supporting The Electricity Regulatory Authority of Viet Nam (ERAV) in taking the lead in developing the competitive market and the energy transition with the support from Development Partners. With the opening of the market, he further indicated the need to look at the reform from both production and consumption sides to attract investment and create a competitive platform for both buyers and sellers.
• Ms. Nguyen Phuong Thao, the VEPG Secretariat presented the planning for the VEPG in 2021 and the outcomes of the Steering Committee (Annex 4.1) with the following highlights:
- The Operational Plan of the VEPG was approved: the next Steering Committee is planned to take place in May 2021 and the High-level meeting is planned to take place in August 2021.
- Ministry of Industry and Trade Vice Minister Đặng Hoàng An and World Bank Country Director for Viet Nam Ms. Carolyn Turk have assumed their roles as the new Chair and Co-chair of the Steering Committee serving alongside Co-Chair and European Union Ambassador to Viet Nam, H.E. Giorgio Aliberti.
- The EU will continue to fund the VEPG in the next phase. To avoid any gap in operations of the VEPG, Germany offered to provide bridge funding to the VEPG Secretariat between November 2021 and June 2022.
- The Secretariat, on behalf of the Steering Committee, is supporting the revision/redrafting of the Terms of Reference.
Competitive Power Markets
• The National Load Dispatch Center (NLDC) presented the results of the operation of the Viet Nam Wholesale Market in 2020 (Annex 4.1)
• The Electricity Regulatory Authority of Viet Nam (ERAV) presented on the Development Roadmap of the Viet Nam Energy Market including plans for competitive gas, coal, and electricity markets (Annex 4.1)
• USAID’s Viet Nam Low Emission Energy Programme (VLEEP) presented an update of the Direct Power Purchasing Agreement Pilot Programme (Annex 4.1). The Current Draft Circular is published for public Consultation (Annex 4.2). The next steps include an applicant conference organized by ERAV, the finalization of the DPPA website, and the issuance of the Circular after 60 days public comment period followed by a defined delivery schedule for the program after approval.
3
- ERAV requested comments from the stakeholders for the draft Circular.
• The TWG stakeholders discussed the presentations. The highlights of the discussion are summarized below:
- Energy storage system: there needs to be a solution to include energy storage systems for load shifting as well as for voltage and frequency stabilization.
- Energy competitive market: for the coal and gas market, there is a likelihood that these markets will be impacted by the higher penetration of renewable energy and other interactions, such as climate commitments and/or a carbon price.
- Establishing NLDC as a one-member LLC: under Decision 168/QD-TTG, the NLDC will be established as a one-member LLC in the period 21-25. However, the process is currently managed by the Committee for Management of State Capital at Enterprises (CMSC). The CMSC has sought comments from MOIT 3 times with the comments on the assessment report at the end of March. It is currently under the review of the Prime Minister (PM)
- Curtailment risk: There was the question raised as to who bears the curtailment risk. ERAV already considered curtailment risks for both buyers and sellers in their modelling, however, they did not simulate this model and aimed to avoid curtailment for all power plants. They piloted 1000 MW within the work and are considering the addition of 6000MW. One stakeholder noted that such a limited pilot could not adequately serve to demonstrate or provide insight as to how a full capacity market might operate. According to the response, risk management and contract management should be the responsibilities of both buyers and sellers according to the spot market operation.
- Data sharing for investors: Data sharing for investors will follow the market rules and ERAV would enforce the data updates from responsible agencies. However, it was also emphasized that the data of the spot market is for short-term consideration, not for long-term.
- Pilot DPPA and future of the Retail Market: According to Mr. Huy, the electricity retail market won’t conflict with DPPA. DPPA is the first step to allow customers to buy electricity from the spot market.
Priority topics in Energy Sector Reform in 2021; TAs needs and Initial ideas for next phase cooperation
• The technical working group discussed the priorities topics for the year 2021 and beyond 2021 including:
• Ancillary services, including
o Pricing mechanisms for the power storage systems and roadmap for the development of battery/ power storage systems
• Implications for clean energy transition, timelines, and planning on gas, oil, and coal competitive markets
• Renewable energy certificates, carbon trading, and impact of voluntary/mandatory greenhouse gas emissions reductions
• ERAV recommended areas for cooperation and topics of the TWG:
• TWG on ESR is currently focusing on the electricity market and design of the competitive electricity market, the TWG should also include the discussion on other aspects of the energy market such as gas, oil, and coal. The PM has issued a new decision on the roadmap on the competitive power market as
4
well as the energy market. In these areas, the participation of the Department of Oil, Gas, and Coal, and the Electricity and Renewable Energy Authority should be included in the discussion.
• ERAV was tasked by the government to propose amendments to the Electricity Law and technical assistance from development partners will be welcomed in at least three additional areas:
o Detail market design of the Viet Nam Retail Electricity Market from 2023.
o NLDC technical assistance for the solutions to manage the power load as the context will change with the coming plan for the inclusion of LNG and higher renewable energy percentage in the systems.
o Supply forecasting especially for demand-side management (DSM) and demand response (DR)
• The Co-chair tasked the VEPG Secretariat to work with ERAV to develop a list of the TA and areas of cooperation and circulate among partners for the comments and responses.
• The representative of the USAID/ VLEEP announced the second phase of the program with 3 objectives: advancing clean technology, management, and operation of the energy system, and focusing on the competitive market. the program will have funding for 5 years and is currently awaiting ODA approval.
• The representative from Denmark also confirmed support on grid codes, demand-side management activity, and ancillary services.
• The EUD also expressed its readiness to support ERAV through the current TA Facility as well as the upcoming TA facility through the Sustainable Energy Transition Programme.
Conclusions, agreements, closing remarks
• The Chair of the TWG thanked the participants for their active contribution. The Chair asked the VEPG Secretariat to continue to collect more inputs, comments, and recommendations for the TWG’s priorities in 2021 and beyond 2021. The Secretariat will also update the work plan accordingly. All the comments on the work of the TWG will be taken into account and included in the report of the TWG on Energy Sector Reform.
• The Co-chair of the TWG thanked the members of the TWG for their inputs and comments and the Secretariat for the organization of the meeting. He underlined the momentum for transition and stock-taking for this period with a new administration and new government and the revision of TOR for VEPG. All suggestions are timely, and these engagements will make the sector stronger. He looked forward to the strategic vision of the VEPG and TOR revision.
ANNEX 4 – PRESENTATIONS
1
6th Meeting Energy Sector Reform Technical Working Group
23 April 2021Electricity Regulatory Authority of Viet Nam, D10 Khuat Duy Tien, Ha Noi
1.
2.3.4.cooperation
Meeting Objectives
2
3
Agenda09.00-09.15 Log-
09.15-09.30Huy
Opening and introduction to the agenda
Report of the VEPG Secretariat09.30-10.45
NLDC: Update on the Implementation of the Competitive Power Markets 2020ERAV: Present the main contents of Competitive Energy Market Development (Decision 2233)USAID/V-LEEP: Draft Circular on the implementation of the Pilot DPPA
facilitated by chair and co-chair on topic10.45-11.00
11.00-11.30
Stakeholder discussion near-term and long-term priorities in energy sector reform including but not limited to: policy recommendations, potential assistances / cooperation.Priority TA needs and initial ideas for next phase cooperationPrepare next SC of VEPG
11.30-11.45 Wrap-Huy
Opening Remarks
Mr. Quang Huy, ERAV/MOIT
Ms. Rahul Kitchlu,
Secretariat Update
5
Ms. , Project Officer
6th VEPG Steering Committee Meeting Outcomes
6
VEPG Steering Committee
7
Aliberti
VEPG Operational Plan 2021
8
High-Level Meeting August 2021
Steering Committee Meeting Before the HLM (May 2021)
Technical Working Group Rounds in March/April and September/October
1. Approved through Technical Working Group
2. Approved through Steering Committee
9
VEPG Timeline through 2021
Viet Nam Energy Partnership Group 9
6th
March - April
Meetings7th
Meeting
AugustJune September October
High-Meeting Meetings
November
Cycle
Technical Working Groups
10
TWGTWG 1 RE
Updates on the in Viet Nam including new mechanism for Solar Power, Offshore Wind Development Roadmap.
for the TWG on Renewable Energy in 2021
TWG 2 EEUpdate on the / National Energy Efficiency Action Plan (NEEP)
for the in 2021
TWG 3 ESR Draft Circular on the implementation of the Update on competitive market development
for the for next phase cooperation
TWG 4 EA Update on in the context of and -periodFocus topic
for the TWG 5 D&S Update on
Briefing of the final draft of (TBC)for the
Transition and Next Phase
1) . The has made an offer to fund the VEPG beyond 2021.
2) Stakeholders are concerned that the VEPG will be dormant between phases. Germany has made an offer to bridge the funding gap for the VEPG Secretariat between
3) The Secretariat is tasked to support the VEPG, working with the Steering Committee and other key stakeholders, in
for adoption at the next High-Level Meeting.
11
1. Input from the ERAV/MOIT
2. Input from development partners
Updates on Energy Sector Reform
12
Planning Session
Priority topics & activities for 2021
13
14
VEPG Policy Recommendations
Closing Remarks
15
Mr. Quang Huy, Deputy Director General, ERAV/MOIT
Ms. Rahul Kitchlu, Sector leader for Infrastructure and Coordinator for Energy Sector, World Bank
23/04/2021
Electricity Regulatory Authority of Vietnam 1
MINISTRY OF INDUSTRY AND TRADEElectricity Regulatory Authority of Vietnam
Development of Vietnam Energy Market
April 23, 2021
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
2
Legal basis
▪ Based on the 03 main legal framework:
• The Electricity Law
• The Petroleum Law
• The Mineral Law
▪ Decision No. 2233/QD-TTg dated December 28, 2020 of the
Prime Minister on approving the Scheme on developing a
competitive energy market through 2030, with a vision
toward 2045
1
2
23/04/2021
Electricity Regulatory Authority of Vietnam 2
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
3
General Objective
To develop an energy market (coal, gas, electricity) which:
• Encourage healthy competition
• Regulated by the government
• Ensure national energy security
• Increase global economic integration
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
4
Specific Objectives
• To ensure energy security for the national economic development.
• To transform the energy industry into a market-based one
regulated by the government; promoting healthy competition,
transparency; attracting investment from all economic sectors;
efficiently exploiting energy resources.
• To transparentize energy prices (market-determined).
• Transforming the coal market into a fully competitive one for
electricity generation and exportation in which participants trade
coal and provide services following market rules.
• Developing legal framework for competition in the gas industry
(CNG, LPG, LNG), developing a competitive market for
downstream sectors including 3rd party access policies.
• Continuing to develop the power market
3
4
23/04/2021
Electricity Regulatory Authority of Vietnam 3
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
5
Development Roadmap
2021-2025 2026-2030 2031-2045
Gas
market
• Allowing new gas exploitation
projects to directly sell to
consumers or sell wholesale to
PVN/PVGas.
• Developing the 3rd party
access policy and technical
standard for LNG supply
chain.
• Developing market model
for competition in
downstream gas distribution,
applying the 3rd party access
policy.
• Continuing to perform all
governmental and
commercial commitments on
all signed projects.
• Fully operating the
competitive market in gas
importation, downstream
gas distribution including
the 3rd party access policy.
• Synchronizing the gas
market with the power
market.
Coal
market
Keeping the current model of coal
supply still.
• Continuing to perform all
committed coal trading
agreements.
• Gradually establishing the
coal market with multiple
buyers/sellers and coal
supply units.
Fully operating the competitive
coal market in which
participants trade coal and
provide services following
market rules.
Power
market
-Completing the competitive
wholesale market.
-Establishing the competitive
retail market.
-Expanding the competitive
retail market
-Expanding the competitive
retail market
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
6
General solutions
• Improving the current legal framework.
• Sector reforms.
• Completing the National Energy Master Plan for 2021-2030 with
a vision to 2050.
• Technological advancements
• Gradually transform energy prices into market-oriented ones. The
government only regulates prices and fees related to natural
monopolies.
• Perform retail prices regulation based on market price fluctuation.
5
6
23/04/2021
Electricity Regulatory Authority of Vietnam 4
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
7
Specific solutions
• Gas market: o Improving the current legal framework, infrastructure.
• Coal market: o Performing the long-term contract mechanism for large consumers;
developing electronic contracts; researching on the listing of coal to the
mercantile exchange; researching on coal import strategy.
o Regulating coal price based on market mechanism.
o Improving infrastructure.
o Promoting joint ventures/partnerships between foreign/internal enterprises
and the coal industry.
o Sector reforms.
• Power market:o Completing the wholesale market: based on the Detailed Design (Circular
8266/QD-BCT dated 10 August, 2015)
o Establishing the retail market: sector reforms, improving the current legal
framework.
ERAVElectricity Regulatory
Authority of Vietnam
ERAVElectricity Regulatory
Authority of Vietnam
8
THANKS FOR YOUR
ATTENTION
7
8
23/04/2021
1
VIETNAM WHOLESALE
ELECTRICITY MARKET 2021
Content
02. VWEM OPERATION AND IMPLEMENTATION
FOR THE REMANING MONTHS OF 2021
01. OPERATIONAL RESULT OF 2020 & Q1/2021
1
2
23/04/2021
2
OPERATIONAL RESULT OF
2020 & Q1/2021
01
OPERATIONAL RESULT OF 2020
3
4
23/04/2021
3
National Load Dispatch Centre 5
2020 - Generation Installed Capacity
100 direct trading power plants; 27640; 44%
110 indirect trading power plants; 23847;
38%
11 strategic hydro power plants; 8442;
14%
Other; 2304; 4%
Generation Installed Capacity by Market Participation Status(number, MW, %)
100 direct trading power plants 110 indirect trading power plants
11 strategic hydro power plants Other
Hydro; 20859; 33%
Coal fired; 22077; 35%
Gas turbine; 7398; 12%
Oil fired; 1579; 3%
Renewable; 9701; 16%
Generation Istalled Capacity by fuel types (MW; %)
Hydro Coal fired Gas turbine Oil fired
Import Renewable Other
National Load Dispatch Centre 6
2020 - Energy Production
Hydro72.9 30%
Coal123.2 50%
Oil&Gas34.7 14%
Renewable10.1 4%
Others5.1 2%
Energy production (bil. kWh, %)Category
Energy production(bil. kWh)
(%)
Hydro 72.9 30%
Coal 123.2 50%
Oil & Gas 34.7 14%
Renewable 10.1 4%
Others 5.1 2%
Total 245.9 100%
5
6
23/04/2021
4
National Load Dispatch Centre 7
2020 - Operational results - System3070
2918
2923
2631
4176
5829
7634
9861
9388
10544
7694
6224
10246
11133
12719
11502 12744
11732
11149
8057
8481
6507
8678
10230
2913
3249 3298
3155
3330
3290
3159
2561
2457
2271
2375
2599
35006
33686
3492632614
3780938617 38608 38280 37835
3509436153 36140
20000
22000
24000
26000
28000
30000
32000
34000
36000
38000
40000
0
4000
8000
12000
16000
20000
24000
1 2 3 4 5 6 7 8 9 10 11 12
Peak
dem
and
-M
W
Pro
du
ctio
n P
ow
er -
MW
h
Power generation, production share and peak demand in 2020 (GWh)
Hydro Coal-fired Gas turbine Renewable Others Peak Demand - Pmax
8Trung tâm Điều độ hệ thống điện Quốc gia - EVNNLDC
Annual Peak Load Growth
30
93
1
35
11
0
38
24
9
38
61
7
10.2
13.51
8.94
0.96
0
2
4
6
8
10
12
14
16
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2017 2018 2019 2020
%MW
Peak load Growth
Due to the strong influence of COVID-19 global pandemic, the peak load in 2020 only reached
at 38,617MW. Actual growth was at 0.96%.(In 2020 annual planning, peak load was expected to increase by 7.8%).
7
8
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5
9Trung tâm Điều độ hệ thống điện Quốc gia - EVNNLDC
Annual Energy Production Growth
19
8.5
22
0.0
24
0.0
24
5.9
8.5
10.8
9.1
2.5
0
2
4
6
8
10
12
0
50
100
150
200
250
300
2017 2018 2019 2020
%
bili
on k
Wh
Energy production Growth
Enery production in 2020 also grew slowly, reached 245.9 billion kWh.
2020 annual planning was expected to grow by 8.9%. Actual growth was 2.5%.
Renewable Energy Growth
❑ By the end of 2020, the total number of renewable power plants in operation was 129
(including 121 solar power plants, 07 wind power plants and some other biomass) with a
total installed capacity of 8839 MW.
1536
3094
4904
5045
5587
8839
29
57
91 9499
129
0
20
40
60
80
100
120
140
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
04
/20
19
05
/20
19
06
/20
19
07
/20
19
08
/20
19
09
/20
19
10
/20
19
11
/20
19
12
/20
19
01
/20
20
02
/20
20
03
/20
20
04
/20
20
05
/20
20
06
/20
20
07
/20
20
08
/20
20
09
/20
20
10
/20
20
11
/20
20
12
/20
20
Nu
mb
er o
f R
EPP
Inst
alle
d C
apci
ty -
MW
Installed Capacity (MW) Number of REPP
3
7
121
0 50 100 150
Biomass
Wind
Solar
Number of RE Power Plants
Biomass, 169, 2%
Wind, 433.4, 5%
Solar, 8236.6,
93%
Installed Capacity (MW, %)
Biomass Wind Solar
9
10
23/04/2021
6
National Load Dispatch Centre 11
Renewable Energy
❑ The total renewable power energy production reached about 10.1 billion kwh (about 27.6
million.kwh/day), contributed 4.1% of the total power production of Vietnam national
power system.
753 734847 810 831
740853 855 826
712802 811
31 59 60 24 21 32 29 27 20 10 5 220
100
200
300
400
500
600
700
800
900
1 2 3 4 5 6 7 8 9 10 11 12
Mill
ion
kW
h
Month
Wind Solar Biomass
National Load Dispatch Centre 12
Operational results – Hourly market Price
Average monthly SMP in 2020 is at medium and low level
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
3000
6000
9000
12000
15000
18000
21000
24000
27000
30000
SMP
(đ/kWh)
De
ma
nd
(M
W)
Time
Demand versus system marginal price
Phụ tải - Demand Giá điện năng TT - SMP
11
12
23/04/2021
7
National Load Dispatch Centre 13
10,048.4 8,804.5 14,838.7 13,412.4 14,289.0 14,170.6 13635 12138 13098 14100 13125 12421
1075 1127 1107
8251009
902 843
613789
262
634 689
11261188 1167
887
1073
971907
677
855
328
704755
11551216 1191
908
1096
992928.4
694.9
877.2
337.7
719.3774.3
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
14,000.0
16,000.0
0
500
1000
1500
2000
2500
3000
3500
4000
January February March April May June July August September October November December
Bill
ion
VN
D
VN
D/k
Wh
Spot payment SMP FMP CFMP
Operational results – Full market Price
OPERATIONAL RESULT OF Q1-2021
13
14
23/04/2021
8
15Trung tâm Điều độ hệ thống điện Quốc gia - EVNNLDC
11011 MWp
Solar Farm
9583 MWp
Solar Rooftop
RE resources growth in the first quarter of 2021
5702 6109
11011
T12/2019 T6/2020 T3/2021
273 691
9583
T12/2019 T6/2020 T3/2021
13617 14671
30607 29745
8177 7437
58692 59986
0
10000
20000
30000
40000
50000
60000
70000
Plan Actual
Output of sources in the Q1/2021 according to plan and actual (bil.kWh)
Others
Biomass
Solar Rooftop
Solar Farm
Wind
Oil
Gas turbine
Coal fired
Hydro
Sum
Load growth in Quarter I / 2021
The explosive growth of rooftop solar power in the late of 2020
OPERATIONAL RESULT OF QUARTER 1ST OF 2021
16Trung tâm Điều độ hệ thống điện Quốc gia - EVNNLDC
OPERATIONAL RESULT OF QUARTER 1ST OF 2021
Type of generationInstalled Capacity
(MW)Ratio(%)
Hydro 16,972 24.11%
Coal fired 22,077 31.36%
Oil fired 1,579 2.24%
Small Hydro 3,887 5.52%
Gas turbine 7,398 10.51%
Biomas 325 0.46%
Wind 538 0.76%
Solar farm 8,852 12.58%
Solar rooftop 8,145 11.57%
Nhập khẩu 572 0.81%
Diesel 24 0.03%
Total 70,393 100%
The explosive growth of rooftop solar power in the late of 2020
At noon
❑ The solar (Farm and Rooftop) and wind mobilize high, about 14000 MW
❑ Traditional sources must be reduced to about 20000MW
❑ Overload of transmission system
❑ Overgen
At night
❑ The solar is no longer playing
❑ Suitable thermoelectric configuration to reduce the amount of renewable energy curtailment
❑ Deficit Gen or Mobilize highly hydroelectric sources
15
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9
17Trung tâm Điều độ hệ thống điện Quốc gia - EVNNLDC
➢ The market electricity price in January and February 2021 is lower than the annual plan due to the
impact of COVID-19 and the increasing penetration of renewable energy, especially rooftop PV.
➢ Electricity system load shows signs of recovery from March, after disease has been controlled andthe dry season begins.
824.6 900.41148.7
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
1020.6953.2
1022.0 1033.4 1041.9 1012.31109.4 1196.4
1022.5 1013.3 1019.1 1020.5
0
200
400
600
800
1000
1200
1400
1 2 3 4 5 6 7 8 9 10 11 12
(đ/kWh)
SMP price in Q1 / 2021
SMP (reality) SMP (annual report) SMP (monthly report)
OPERATIONAL RESULT OF QUARTER 1ST OF 2021
National Load Dispatch Centre 18
OPERATIONAL RESULTS - SYSTEM
❑ System Operation difficulty
1. The installation of plants and grid is slow and inconsistent. It does not meet
proposed schedule causing overload and electricity shortage on the power system.
2. Uncertainty of hydro power plant with many constraints in operation and irrigation
3. Limited fuel for electricity generation (coal, gas…)
4. Renewable Energy (mostly solar) high penetration:
o Congestion
o Power balancing challenge (Large frequency fluctuation and oscillation,
Forecast error, Balancing power from conventional plants)
o System reliability (Capacity firm of RE is inversely proportional to penetration
of RE)
o Power quality (Voltage, Harmonic)
17
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10
VWEM OPERATION AND IMPLEMENTATION
FOR THE REMANING MONTHS OF 2021
02
National Load Dispatch Centre 20
List of new power plants from the second quarter 2021 - MW
612 89
8
118
9
153
4
224
1 402
2
523
0
53
49
6001260
21462437
2884
4941
6722
7930 8049
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
4 5 6 7 8 9 10 11 12
Month
Inst
alle
d C
apac
iity
-M
W
List new power plants from the second quarter 2021 - MW
Sông Tranh 4 HPP Hồi Xuân HPP Duyên Hải 2 CPP Sông Hậu 1 CPP
Solar Wind SUM
The booming development of wind power in the second half of 2021 will bring many new difficulties
and challenges in the operation of the power system and the electricity market.
19
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11
Thank You!
21
DPPA Pilot Program UpdateUSAID Vietnam Low Emission Energy Program
April 2021
DISCLAIMER
This presentation was prepared by Deloitte Consulting LLP under a contract with the United States Agency for International Development (“USAID”). This presentation
does not necessarily reflect the views of USAID or the United States Government. This presentation is for informational purposes only, and is intended solely to
provide potential Direct Power Purchase Agreement (DPPA) participants with additional general awareness of the financial impacts of DPPAs, which will vary
according to the terms of a DPPA contract and variables such as future retail and spot market prices. Nothing in this presentation is intended to constitute nor should
be relied upon as legal, investment, financial, or other advice. Data from third parties has been used in the preparation of this presentation but was not independently
verified by Deloitte Consulting LLP. This presentation, as well as associated documents and information, may be provided to third parties for informational purposes
only and shall not be relied upon by third parties as specific professional advice or recommendations. Neither Deloitte Consulting LLP nor its affiliates or related entities
shall be responsible for any decisions made by any party who relies on any information included in this presentation.
• DPPA Pilot Program & Legislation Approval Status
• Contractual Agreements, DPPA Charge, and Operational Gap Analysis
• Applicant Guidelines
3
Agenda
4
DPPA Pilot Program & Legislation Approval Status
• The current allocation for the DPPA Pilot Program will not exceed 1,000 MW.
• We believe that the pilot will meet or exceed allocation expectations pending final framework and underlying agreements.
5
DPPA Pilot Program Status
Question: What is the current status of the DPPA Pilot Program?
Answer: Anticipating a 2021 Q2/Q3 Kickoff.
• On April 8, MOIT published the 2nd draft Circular for the DPPA pilot program on the MOIT website and is now available for public
comment until June 6th
• V-LEEP continues to collaborate with stakeholders to receive and summarize comments to support ERAV to finalize the circular
Question: What happens once the MOIT Circular is signed?
Answer: V-LEEP is closely coordinating with ERAV to support a sequence of next steps
• Pre-Planning is underway for an Applicant’s Conference and Launch Event to support preparation for submission
• Currently under review by GVN:
o Transaction Agreements, web-based “one stop shop” for Pilot Program info, and application submission review process
▪ Applicants can submit projects within the open application timeframe to be considered for inclusion in the Pilot.
Question: How big will the pilot program be?
Answer: There has been a lot of interest
DPPA Mechanism Adopted for Vietnam
CfD = Contract for Differences
GENCO = Generation Company
EVN = Vietnam Electricity
PC = Power Corporation
VWEM = Vietnam Whole Electricity Market
Definitions:
Consumer and GENCO enter into a CfD
1
2
GENCO sells
power to
EVN @ spot
market price
VWEM sells power to PC @ spot market price
(taking into account distribution grid loss)
3
4
PC sells to
Consumer @
spot price
(taking into
account
distribution
grid loss) +
DPPA chargeSpot Market Prices
7
DPPA Pilot Program Characteristics – Latest draft (April 08)
Program Size
Transaction
Agreements
Pre-Application
Cooperation
Evaluation
Criteria
• DPPA Pilot Program target allocation will not exceed 1,000 MW
• Individual projects must be above 30MWac per Circular 45 Rules
• Power Purchase Agreement (GENCO-EVN/EPTC): *EVN’s responsibility*
• Market Buyer Power Supply Agreement (EVN/PC-Consumer): * EVN’s responsibility*
• Contract for Differences (GENCO-Consumer): commercial agreement written by Project Parties
• GENCO and Consumers negotiate commercial terms of the CfD
• Consumers can be a single entity or a consortium of Consumers
• The proposed project must already be included in PDP and has been approved by the competent
authority
• Consumer must have publicly stated sustainability commitments
• Consumer commits to contract at least 80% of total electricity consumption from RE GENCO source
• GENCO commits to COD 270 working days from date of selection announcement
• GENCO must include written commitment for financing of the project from a financial institutions
8
2
• MOIT Circular (Currently draft published for Public Consultation)
• Pilot Program launched
3
Legal Approval/
Invitation to Participate
(Q2 – Q3 2021)
Project Selection
(Q3 2021 – Q1 2022)
• Applications to MOIT submitted & evaluated
• Transaction agreements executed
• Operational capacity developed
Pilot Project Planning
(May – Dec. 2019)
1
• MOIT Public Consultation
• First Action Plan agreed with ERAV
• Market preparation
DPPA Pilot Program Timeline
All dates are approximation based on current activities
9
Applicant Guidelines
DPPA Pilot Application Timeline*
10
- MOIT Circular: Launches the DPPA Pilot Program;
- MOIT Announcement: Within 15 working days of the Circular effective
date, MOIT shall announce the pilot DPPA program;
- Open Applications: Within 15 working days of the Announcement, MOIT
launches a website with all relevant info and invites applicants to apply
for participation;
- Application Close: Within 45 working days of website launch and
invitation to apply, applicants should have submitted complete and final
application on this website;
- Evaluation: Within 40 working days of application and website closing,
Nominee shall evaluate and select a roster of selected projects;
- Selection announcement: Within 5 working days of evaluation finished,
MOIT shall announce the selected projects;
- Commercial Operations: Within 270 working days from the
announcement of the list of selected projects, GENCOs shall put the
project into commercial operation
*All durations are estimated based on currently available information
MOIT Circular Effective date
270
MOIT
Circular
Effective date Applications
Due
+75
MOIT Announces
Selected Projects
+120
Commercial
Operation Date
+390
Updated Timeline (per new draft Circular)
Website
Launch
Deadline
+30
Applicant’s
Conference
+20
DPPA Launch
+15
ERAV reviews the market, technical,
financial and legal aspects, and
proposes for the improvement of the
DPPA mechanism
1 year
Per draft Circular V-LEEP Suggestion
Updated Evaluation Timeline & Process (working days)
12
DPPA Pilot Program Eligibility Criteria
• Tariffed Customer: Consumer must be an existing
industrial customer taking service at 22 kV or higher
voltage
• Project Size: Per Circular 45, individual projects size
shall be greater than 30MW ac
• Commercial Arrangements: Project Parties have
signed binding term sheets
• Technology Type: Wind or Solar PV
• Power Development Plan: Project must be
included in PDP and has been approved by the
competent authority *
Illustrative Project Structure
Disclaimer: *Per 2nd draft Circular published on MOIT
website on April 08*
Eligibility Criteria
Home Page
13
Pilot Program Information and Application Web Based Portal
14
Next steps
+ ERAV will organize applicant conference to guide the stakeholders and participants wishing to
join the program
+ ERAV and V-LEEP will finalize the DPPA website to make sure it includes all relevant information,
and the submission process is transparent and fair
+ After the 60 day public comment period ERAV will finalize the Circular and submit to MOIT for
final approval
+ After 45 days from approval date, the DPPA pilot program Circular will take effective
Thank you!
USAID Vietnam Low Emission Energy Program
Gary Zieff
USAID V-LEEP
Deloitte Consulting
Tel/Direct: Mobile: +571-388-7244
gzieff@deloitte.com | www.deloitte.com