Better policies needed for independent power producer: experts

As private investment can play a significant role in increasing local power supply, experts have worked to find better mechanisms and policies to solve problems that have discouraged investment in the sector.
Transmission lines are installed to connect renewable energy plants in Thuan Nam district, Binh Thuan province. (Photo: VNA)

Transmission lines are installed to connect renewable energy plants in Thuan Nam district, Binh Thuan province. (Photo: VNA)

As private investment can play a significant role in increasing local power supply, experts have worked to find better mechanisms and policies to solve problems that have discouraged investment in the sector.

Deputy Minister of Industry and Trade Hoàng Quoc Vuong told a seminar on independent power producers (IPPs) in Hanoi on September 18 that electricity demand will increase by 7.5- 8 percent per year by 2030 when local production capacity nationwide should reach 526 billion kWh, meaning the total capacity of the national grid would reach 131,000 MW.

“The scale and proportion of private investors have been increasing. Specifically, by the end of 2019, the national power source structure had a capacity of 19,253 MW belonging to the private sector including power plants invested in the form of IPP and build-operate-transfer, accounting for 34.4 percent," he said.

Vuong, also deputy head of the National Steering Committee for Electricity Development, added: “From now to 2030, an additional 75,100 MW of electricity will be needed each year.”

Calculating that the investment required for this power source is between 7 billion USD and 8 billion USD per year, the official said there is great potential for investors to join the market.

According to the National Steering Committee for Electricity Development,  IPP power projects that have been invested in and put into operation reached a total capacity of 16,400 MW, accounting for 28.3 percent of the total capacity of the national grid. 

Other experts told the seminar that the renewable energy market should be encouraged by lengthening the feed-in tariff (FIT) mechanism for another one or two years as many projects of that type had faced difficulties and delays due to the COVID-19 pandemic.

As of July, there were a total of 99 solar power plants operating with a total capacity of 5,053 MW and 11 wind power plants in operation with a total capacity of 429 MW, accounting for about 9.5 percent of the total installed capacity of the system.

Hoang Tien Dung, Director of the Department of Electricity and Renewable Energy under the MoIT, said his department is working with the Institute of Energy to complete the Power Planning VIII and submit it to the MoIT by the end of this month.

VNA

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