Circular No. 09/2025/TT-BCT dated February 01, 2025 on applications, procedures, methods for determining and approving electricity generation price bracket; applications, procedures, methods for determining and approving electricity import price bracket
|
MINISTRY
OF INDUSTRY AND TRADE OF VIETNAM |
SOCIALIST
REPUBLIC OF VIETNAM |
|
No: 09/2025/TT-BCT |
Hanoi, February 01, 2025 |
CIRCULAR
APPLICATIONS, PROCEDURES, METHODS FOR DETERMINING AND APPROVING ELECTRICITY GENERATION PRICE BRACKET; APPLICATIONS, PROCEDURES, METHODS FOR DETERMINING AND APPROVING ELECTRICITY IMPORT PRICE BRACKET
Pursuant to Law on Electricity dated November 31, 2024;
Pursuant to Government’s Decree No. 96/2022/ND-CP dated November 29, 2022 defining functions, tasks, powers and organizational structure of the Ministry of Industry and Trade of Vietnam; Government’s Decree No. 105/2024/ND-CP dated August 01, 2024 on amendments to Decree No. 96/2022/ND-CP and Decree No. 26/2018/ND-CP dated February 28, 2018 on Charter of organization and operation of Vietnam Electricity;
At the request of the Director of Electricity Regulatory Authority of Vietnam;
The Minister of Industry and Trade promulgates the Circular on applications, procedures, methods for determining and approving electricity generation price bracket; applications, procedures, methods for determining and approving electricity import price bracket.
Chapter I
GENERAL PROVISIONS
Article 1. Scope and regulated entities
1. Scope
This Circular elaborates some Articles of the Law on Electricity No. 61/2024/QH15, including:
a) Clause 5, Article 46 providing applications, procedures for developing and approving electricity import price bracket, methods for determining electricity import price bracket;
b) Clause 3, Article 51 of the Law on Electricity providing applications, procedures, methods for determining electricity generation price bracket; and approving electricity generation price bracket developed and submitted by electricity generation units.
2. This Circular applies to following entities:
a) Any agency, organization or individual owning a power plant within the territory of the Socialist Republic of Vietnam connected with national power system, except for multi-purpose strategic hydropower plants, renewable energy plants applying the avoided cost tariff, power plants and generating sets providing ancillary services; power plants applying electricity purchasing price mechanism as prescribed in documents of competent authorities;
b) Any domestic organization importing electricity from organizations or individuals within the territory of the Lao People's Democratic Republic (hereinafter referred to as “Laos") and the People's Republic of China (hereinafter referred to as “China”).
c) Vietnam Electricity;
d) Other relevant organizations and individuals.
Article 2. Interpretation of terms
For the purposes of this Circular, the terms below shall be construed as follows:
1. Calculation specifications means the specifications for calculating electricity generation price bracket formulated by electricity generation units, on the basis of the approved feasibility study reports on investment of construction and operation of projects on power plants, which have their fundamental designs appraised within 48 months prior to the time of calculating electricity generation price bracket of thermal power plants using coal or gas; and within 48 months prior to the time of calculating electricity generation price bracket of power plants other than thermal power plants using coal or gas.
2. Units operating electricity systems and electricity markets refer to units responsible for the functions of national power system dispatch units and electricity market transaction regulation units according to the Law on Electricity (currently the National Power System and Market Operator Single-member Limited Liability Company – NSMO)
3. Pumped-storage hydropower plants refer to hydropower plants using a system of water reservoirs at different elevations to store energy and generate electricity, in which water is pumped from a lower elevation reservoir to a higher elevation reservoir during non-generating times to store energy.
4. Floating solar power plants refer to solar power plants connected to the national power system, with photovoltaic panels installed on floating structures on the water surface.
5. Ground-mounted solar power plants refer to solar power plants connected to the national power system, other those described under Clause 4 of this Article.
6. Onshore wind power plants refer to wind power plants connected to the national power system, other those described under Clause 5 Article 20 of the Law on Electricity.
Chapter II
METHODS FOR DETERMINING ELECTRICITY GENERATION PRICE BRACKET
Article 3. Rules for developing electricity generation price bracket
1. Electricity generation price bracket is ranging from the minimum price (0 VND/kWh) to the maximum price.
2. The maximum price applicable to each type of power plants (excluding hydropower plants) shall be the electricity generation price determined using methods specified in Articles 4, 5, 6, and 7 of this Circular.
3. The maximum price applicable to hydropower plants shall be developed on the basis of the annual avoided cost tariff using methods specified in Article 8 of this Circular.
4. Electricity generation price applicable to solar power plants shall be developed on the basis of the average annual radiant intensity of 3 regions: Northern region, Central region, and Southern region.
5. In the case where a power plant does not have its feasibility study report for investment construction approved, and does not have its fundamental design appraised, specifications for calculating electricity generation price bracket shall be determined using methods specified in this Circular, based on reference to consulting organizations.
6. For renewable energy power plants using combined energy storage systems, if the energy storage system only consumes electricity from these renewable energy power plants during the charging cycle, the total investment amount for calculating the electricity generation price bracket shall include the investment costs of the energy storage system components.
Article 4. Methods for determining electricity generation price bracket
Electricity generation price PC (VND/kWh) shall be determined using the following formula:
Pc = FC + FOMC + VC
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FOMC: |
Fixed operation and maintenance costs per base year determined in accordance with Article 7 of this Circular (VND/kWh) |
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VC: |
Variable price determined in accordance with Article 6 of this Circular (VND/kWh) |
Article 5. Methods for determining average fixed costs
1. The average fixed costs FC (VND/kWh) serves as a component for the purpose of investment recovery and is determined using the formula below:
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FC |
= |
TC |
|
Ebq |
In which:
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TC |
Annual converted investment capital for construction (excluding VAT) determined in accordance with Clause 2 of this Article (VND); |
|
Ebq |
Average electricity yield over multiple years determined in accordance with Clause 6 of this Article (kWh). |
2. Annual converted investment capital shall be determined using the following formula:
In which:
|
SDT: |
Calculated investment rate determined in accordance with Clause 4 of this Article (VND/kW or VND/kWp). kWp measures peak capacity of a solar panel in standard condition; |
|
Pt : |
Calculated capacity (kW or kWp) in accordance with Clause 3 of this Article; |
|
n: |
Economic life of the power plant specified under Appendix attached hereto (year); |
|
i: |
Discount rate of the power plant determined in accordance with Clause 5 of this Article (%). |
3. Calculated capacity refers to the capacity of the power plant selected from the Calculation specification set based on the National power development planning. Calculated capacity is converted to the electricity delivery point to the buyer through the proportion of self-consumption, transformer step-up losses of the power plant, and transmission losses (if any)
4. The calculated investment rate is the investment cost per 1 kW (or 1 kWp) of capacity of the power plant, where the total effective investment (including only items serving electricity production) is updated with the foreign exchange rate at the time of calculating the electricity generation price bracket, and is determined based on one of the following bases:
a) Calculated investment rate of the power plant is the value of the calculated capacity selected in Clause 3 of this Article;
b) Average investment rate of power plants of the same technology type is calculated based on Calculation specification set.
In cases where the calculated investment rate is not determined according to the options specified in points a, b of this Clause, the calculated investment rate is selected based on actual negotiation contract data or reference data from consulting organizations.
5. Discount rate i (%) applying pre-tax weighted average cost of capital is determined using the formula below:
|
i: |
= |
(D x rd + E x re) x nD + re x (n - nD) |
|
n |
In which:
|
D: |
Percentage of borrowed capital in total investment prescribed under Appendix attached hereto (%); |
|
E: |
Percentage of owner’s equity in total investment prescribed under Appendix attached hereto (%); |
|
n: |
E economic life of the power plant in accordance with Clause 2 this Article (year); |
|
nD: |
Average debt repayment period is 10 years; |
|
rd: |
Borrowed capital interest rate determined in accordance with Point a of this Clause (%); |
|
re: |
Pre-tax interest rate of owner’s equity is determined in accordance with Point b of this Clause (%). |
a) Borrowed capital interest rate rd (%)is calculated using weighted average interest rate of capital borrowed in VND and capital borrowed in foreign currency using the formula below:
rd = DF x rd,F + DD x rd,D
In which:
|
DF: |
Percentage of capital borrowed in foreign currency in total investment prescribed under Appendix attached hereto (%); |
|
DD: |
Percentage of capital borrowed in VND currency in total investment prescribed under Appendix attached hereto (%); |
|
rd,F: |
Interest rate of capital borrowed in foreign currency is determined by 180-day average SOFR (Secured Overnight Financing Rate) of 36 consecutive months from the first day of the nearest March, June, September, or December of the negotiation year, as announced by the Fed (Website: www.newyorkfed.org) plus the average annual loan arbracketment fee charged by the bank, which is 3% per year |
|
rd,D: |
The interest rate for capital borrowed in VND currency is determined by the average interest rate for 12-month deposits in VND, applicable to individual customers, on the first day of the 60 months preceding the nearest March, June, September, or December of the price bracket calculation year of 04 commercial banks (Vietnam Bank for Foreign Trade, Joint Stock Commercial Bank for Industry and Trade of Vietnam, Joint Stock Commercial Bank for Investment and Development of Vietnam, Agriculture and Rural Development Bank of Vietnam, or their lawful successors) plus the average annual loan arbracketment fee charged by the bank, which is 3% per year. |
b) Pre-tax interest rate of owner’s equity re (%) is determined using the formula below:
In which:
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re,pt: |
Post-tax return on owner’s equity (%), which is 12%; |
|
t: |
Average corporate income tax rate over the economic life of power plants determined in accordance with current State regulations (%), ensuring that the power project benefits from corporate income tax incentives (if any). |
6. The average annual electricity delivered Ebq (kWh) is determined as follows:
a) For thermal power plants, Ebq is determined using formula below:
Ebq = Pt x Tmax x (1 -Kcs)
In which:
|
Pt : |
Calculated capacity (kW or kWp) in accordance with Clause 3 of this Article; |
|
Tmax: |
Maximum operating hours specified under Appendix attached hereto (hour); |
|
Kcs: |
Average capacity degradation over the economic life of the power plant specified under Appendix attached hereto (%); |
For the power plant where its Tmax is not specified under Appendix attached hereto, Tmax is determined based on the Calculation specification set and referencing data from consulting organizations (if necessary)
For the power plant where its Kcs is not specified under Appendix attached hereto, Kcs is set at 0 (zero).
a) For solar power plants, Ebq is determined using formula below:
Ebq = A x r x H x PR
In which:
|
A: |
Total solar panel installation area (m2) corresponding to the calculated capacity; |
|
H: |
Average annual radiant intensity of 3 regions: Northern region, Central region, and Southern region (kWh/m2/year); |
|
R: |
Solar panel efficiency (%); |
|
PR: |
Solar power plant efficiency (%). |
A, r, PR parameters are determined on the basis of: The calculation specification set applicable to solar power plants; referencing data of consulting organizations or actual operational data from solar power plants.
The parameter H corresponding to the Northern, Central, and Southern regions is determined based on information from the base survey of renewable energy resources published and shared by competent authorities in accordance with regulations. In cases where this information is not available, the parameter H corresponding to the Northern, Central, and Southern regions is determined based on referencing data from consulting organizations or average annual radiant intensity of operational solar power plants.
c) Ebq is determined as the forecasted average electricity yield over multiple years of 50% of the wind power plant using the Calculation specification set or the following formula:
Ebq = 8760 x Pt x kCF
In which:
|
Pt : |
Calculated capacity (kW or kWp) in accordance with Clause 3 of this Article; |
|
kCF |
Capacity factor (%) corresponding to the forecasted average electricity yield over multiple years of 50%; |
kCF parameters are determined on the basis of: Calculation specification set; referencing data of consulting organizations or actual operational data from power plants.
d) For pumped-storage hydropower plants, Ebq is determined on the basis of electrical system's demand, the amount of water pumped into the reservoir as specified in the approved feasibility study reports on investment of construction of projects. In cases where it cannot be determined, Ebq is selected based on data from pumped-storage hydropower plants with similar scales where Ebq has been determined.
Article 6. Methods for determining variable price
1. The variable price (VC) refers to a component used to recover fuel costs and other variable expenses of the power plant, which is determined using the following formula:
VC = HR x Pnlc x (1 + f)
In which:
|
VC: |
Variable cost of the power plant (VND/kWh). |
|
HR: |
Net fuel consumption calculated at 85% load and determined based on the net fuel consumption of the corresponding type of power plant in the Calculation specification set or referencing data of consulting organizations (kg/kWh, kJ/kWh, kCal/kWh, or BTU/kWh); |
|
Pnlc: |
Price of the primary fuel for the power plant (VND/kcal or VND/kJ or VND/BTU or VND/kg); |
|
f: |
Percentage of startup costs, auxiliary fuel and material costs and other transformation costs for electricity generation compared to the primary fuel costs specified in the Appendix attached hereto (%). |
For the power plant where its f is not specified under Appendix attached hereto, f is set at 0 (zero).
2. Price of the primary fuel (Pole) is determined as follows:
a) For coal-fired thermal power plants and biomass power plants, Pnlc includes losses, operating fees, management fees, insurance (if any), and transportation prices;
b) For gas turbine combined cycle power plants, Pnlc includes gas price at the wells and costs for transporting gas to power plants (if any);
c) For gas turbine combined cycle power plant using LNG, Pnlc includes LNG import prices, LNG import taxes (if any), costs for transporting LNG to regasification ports and costs for storage, regasification, and distribution after regasification;
d) For waste-to-energy power plants, Pnlc includes subsidies for collection, transportation, and processing of the fuel as regulated by environmental protection laws (if any).
3. For hydropower plants (excluding pumped-storage hydropower plants), solar power plants, and wind power plants: variable price is set at 0 (zero).
4. For pumped-storage hydropower plants, variable price refers to a component used to recover water storage costs determined based on the electricity consumption during the water storage cycle, retail electricity prices during off-peak time applicable to industries specified in laws, and costs for buying reactive power.
In which, electricity consumption during the water storage cycle is determined on the basis of the approved feasibility study reports on investment of construction for projects. In cases where it cannot be determined, the electricity consumption during the water storage cycle is selected based on data from pumped-storage hydropower plants with similar scales where the electricity consumption has been determined.
Article 7. Methods for determining fixed operation and maintenance cost
1. The fixed operation and maintenance cost FOMC (VND/kWh) refers to a component used to recover annual costs of major repairs, employment costs, and other costs, determined by the following formula:
In which:
|
TCFOMC: |
Total fixed operation and maintenance cost of the power plant determined in accordance with Clause 2 of this Article (VND); |
|
Ebq |
Average electricity yield over multiple years of the power plant determined in accordance with Clause 6 Article 5 of this Circular (kWh). |
2. Total fixed operation and maintenance cost TCFOMC (VND) of the power plant determined using the following formula:
TCFOMC = SĐT x Pt x kO&M
In which:
|
SDT: |
investment rate of the power plant determined in accordance with Clause 4 Article 5 of this Circular. |
|
Pt : |
Calculated capacity in accordance with Clause 3 Article 5 of this Circular; |
|
kO&M: |
Ratio of fixed operation and maintenance costs within the investment rate specified under Appendix attached hereto (%). |
In cases where kO&M of other types of power plants is not available in the Appendix attached hereto. kO&M is determined on the basis of reference data from consulting organizations or actual operational data from similar projects.
Article 8. Methods for determining the maximum price of electricity generation price bracket for hydropower plants
The maximum price of electricity generation price bracket for hydropower plants (VND/ kWh) is determined using the following formula:
In which:
|
ACTbq,j: |
Average annual avoided costs of Northern, Central, and Southern regions specified in annual avoided cost tariff issued by the Ministry of Industry and Trade; |
|
tj: |
Percentage of annual electricity production by season and by hour specified under Appendix attached hereto (%). |
Chapter III
METHODS FOR DETERMINING PRICE BRACKET FOR ELECTRICITY IMPORTED FROM LAOS AND CHINA
Article 9. Methods for determining price bracket for electricity import
Electricity import price bracket refers to the maximum price (price ceiling) converted at foreign exchange rate at the time of calculating the electricity generation price bracket, determined as follows:
1. In cases where there are provisions in international treaties to which Vietnam is a member (Agreement between Governments of the two countries), the maximum price of electricity import price bracket shall be determined in accordance the Agreement.
2. In cases where electricity is imported from power plants, the maximum price shall be determined by the average avoided cost tariff of the Northern, Central, and Southern regions, on the basis of calculation results of avoided cost tariff calculated by units operating electricity systems and the national electricity market. The calculation results shall be submitted to electricity authorities affiliated to the Ministry of Industry and Trade, applying methods for determining and rules for applying the avoided cost tariff for small renewable energy power plants issued by the Minister of Industry and Trade.
3. In cases where electricity is imported through the national grid (excluding importing electricity from power plants), the maximum price shall be the price margin based on the average electricity source for the base scenario in the most recent National Power Development Planning approved by the National Power Development Planning Approval Council.
Chapter IV
APPLICATIONS, PROCEDURES, AND APPROVAL OF ELECTRICITY GENERATION PRICE BRACKET AND ELECTRICITY IMPORT PRICE BRACKET
Article 10. Applications, procedures, and approval of electricity generation price bracket
1. Within 15 days from the approval of the feasibility study report on investment of construction of the power plant and the appraisal of fundamental design, the investors shall provide the feasibility study report on investment of construction of the power plant and fundamental design to Vietnam Electricity.
2. Before November 1st of each year, Vietnam Electricity shall:
a) Propose the Calculation specification set and select calculation specifications for electricity generation price bracket for different types of power plants;
b) Calculate or hire consultants to select the Calculation specification set, calculate the maximum price of electricity generation price bracket for power plants in accordance with Chapter II of this Circular.
c) Prepare the application for Calculation specification set specified in Article 12 of this Circular, submit to electricity authorities for appraisal.
3. Within 5 working days from receiving the application for Calculation specification set as specified in Clause 2 of this Article, the electricity authority shall verify the adequacy and legitimacy of the application. If necessary, the electricity authority under the Ministry of Industry and Trade shall request Vietnam Electricity to amend, supplement, or provide explanation. Within 15 days from receiving the request for amending, supplementing, or providing explanation from the electricity authority under the Ministry of Industry and Trade, Vietnam Electricity shall submit a written explanation as requested.
4. Within 25 days from receiving a satisfactory application, the electricity authority under the Ministry of Industry and Trade shall evaluate the electricity generation price bracket and submit it to the Ministry of Industry and Trade for approval. In cases where the electricity generation price bracket has not been announced, the electricity generation price bracket of the previous year shall be temporarily applied.
Article 11. Preparation, appraisal, and approval of electricity import price bracket
1. Units operating national electricity systems and electricity markets shall prepare annual avoided cost tariff and submit it to electricity authorities affiliated to the Ministry of Industry and Trade for approval. The tariff shall be appraise on the basis of determination methods and rules for applying the avoided cost tariff for small renewable energy power plants issued by the Minister of Industry and Trade.
2. Within 25 days from receiving the avoided cost tariff submitted by the unit operating electricity systems and national electricity markets, the electricity authority affiliated to the Ministry of Industry and Trade shall appraise and submit it to the Ministry of Industry and Trade for approving the electricity import price bracket in accordance with Clause 2 Article 9 of this Circular. In cases where the electricity import price bracket for the following year has not been announced, the electricity import price bracket of the previous year may be temporarily applied.
Article 12. Application for approving electricity generation price bracket
1. Application for approving electricity generation price bracket includes:
a) Application form for appraisal and approval of electricity generation price bracket;
b) A table of parameters and documents for calculating the electricity generation price bracket in accordance with Articles 4, 5, 6, 7 and 8 of this Circular;
c) Related documents concerning the parameters used in calculating the maximum price of the electricity generation price bracket.
2. The application shall be prepared in written form, or as a legally valid electronic message in accordance with legal regulations. Vietnam Electricity shall send 01 set of application in the form of electronic message and 01 set of application in written form (if necessary) to the electricity authority affiliated to the Ministry of Industry and Trade.
Chapter V
IMPLEMENTATION CLAUSE
Article 13. Implementation
1. The electricity authority affiliated to the Ministry of Industry and Trade shall:
a) Appraise and submit the electricity generation price bracket to the Minister of Industry and Trade for approval;
b) Appraise and submit the electricity import price bracket to the Minister of Industry and Trade for approval;
2. Vietnam Electricity shall prepare application for annual electricity generation price bracket calculation in accordance with Article 10 and Article 12 of this Circular.
3. Units operating national electricity systems and electricity markets shall prepare the annual avoided cost tariff in accordance with Article 11 of this Circular.
Article 14. Transitional clauses
For organizations and individuals involved in implementing investment in solar or wind power plants that have signed power purchase agreements with Vietnam Electricity but fail to meet the conditions for applying the electricity purchasing prices specified in the Prime Minister's decisions before the effective date of this Circular, the maximum price of the electricity generation price bracket for each type are as follows:
|
No. |
Type |
Maximum price of electricity generation price bracket (VND/ kWh) |
|
1 |
Ground-mounted solar power plants |
1.184,90 |
|
2 |
Floating solar power plants |
1.508,27 |
|
3 |
Onshore wind power plants |
1.587,12 |
|
4 |
Nearshore wind power plants |
1.815,95 |
Article 15. Effect
1. This Circular comes into forces from February 01, 2025.
2. Annul the following Circulars:
a) Circular No. 57/2014/TT-BCT dated December 19, 2014 of the Minister of Industry and Trade on methods and procedures for developing, promulgating electricity generation price bracket;
b) Circular 31/2022/TT-BCT dated November 08, 2022 of the Minister of Industry and Trade amendments to Circular No. 57/2014/TT-BCT dated December 19, 2014 of the Minister of Industry and Trade on methods and procedures for developing, promulgating electricity generation price bracket and Circular No. 57/2020/TT-BCT dated December 31, 2020 of the Minister of Industry and Trade on methods for determining electricity generation price and power purchase agreement price;
c) Circular No. 19/2023/TT-BCT dated November 01, 2023 of the Minister of Industry and Trade on methods for determination of solar power and wind power generation pricing bracket;
d) Circular No. 20/2024/TT-BCT dated October 10, 2024 of the Minister of Industry and Trade on method for determination of generation pricing bracket for waste-to-energy and biomass power plants;
dd) Circular No. 15/2022/TT-BCT dated November 03, 2022 of the Minister of Industry and Trade on methods for determination of generation pricing bracket for solar power plants and wind power plants;
3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry for consideration./.
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PP.
MINISTER |
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