Regulation on Grid Connected Solar Power Investment Project

 The Ministry of Industry and Trade has recently issued Circular 16/2017/TT-BCT on project development and the model purchase contract for solar power projects.

Accordingly, the grid connected solar power investment projects are regulated as follows:

– The investor can only set up a solar power investment project included in the provincial and national level solar-power development plan; or provincial and national power development plan that are approved.

– The contents of the solar power investment project must comply with the regulations on management of investment in construction and the following requirements:

+ Evaluate the impact of solar power project connection plan on the power system in the area.

+ Having equipment connected to the SCADA system or moderation information so that the forecast information on electricity output can be transmitted per hour to the regulated agency.

– The equity ratio of grid connected solar power projects should not less than 20% of the total investment.

– The area of long-term land use shall not exceed 1.2 ha/01 MWp.

Circular 16/2017/TT-BCT takes effect on October 26th 2017.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Law firm in Hanoi, Law firm in Ho Chi Minh and Law firm in Danang.

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Vietnam Encourages Investment in Solar Power

 The Vietnam government has stepped up to encourage investment in solar power plant and project, which is part of the effort to close the gap of energy growth demand versus supply, and support the sustainable energy development in Vietnam.

According to Decision No. 11/2017/QD-TTg issued on Apr 11th, 2017 to be effective from Jun 1st, 2017, organizations and individuals involved in the development of solar power projects are entitled to investment, tax and land incentives.

Specifically, organizations and individuals involved in the development of solar power projects can legally mobilize capital from domestic and foreign organizations and individuals to invest in the implementation of solar power projects in accordance with the provisions of current law.

Solar power projects are exempted from import duties on imported goods to create fixed assets for the project; complying with the current law on import tax and export tax on goods imported for production of projects which are raw materials, supplies and semi-finished products which cannot be produced at home.

The exemption and reduction of corporate income tax for solar power projects shall be implemented the same as for projects in the field of investment incentives in accordance with current tax law.

On land preference, the Decision stipulates that solar power projects, transmission lines and transformer stations for connecting to electricity grids shall be exempted from or reduce land use fees, land rents and water surface rents in accordance with current law applies to projects in the field of investment incentives.

Based on the planning approved by competent authorities, the provincial people’s committees create conditions for arranging land funds for investors to carry out solar power projects. The compensation and support for ground clearance shall be implemented in accordance with the current land legislation.

The decision also specifies that organizations and individuals investing in the construction of solar power projects have the responsibility to install solar power equipment must ensure the safety of structures and work safety in accordance with the current regulations.

The investment in the construction of solar power projects shall comply with the current law provisions on investment, construction, fire prevention and fighting, environmental protection and other relevant regulations.

The Vietnam laws on electricity will be changed to attract investment of the private sector, boosting the industrial development of the country, which is always hunger for power to develop.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have law firm in Hanoi, law firm in Ho Chi Minh City and law firm in Da Nang.





Finding the right business partner in Vietnam is also important. We recommend doing research on the reputation of the company and individual shareholders, corporate or individual, gathering publicly available company information, and performing background checks on key personnel to find potential risks in cooperation. Working with a reliable partner can help achieve economic benefits, saving time and money in business.

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The Development of Renewable Energy in Vietnam

On June 15th, 2020, at the National Assembly’s socio-economic discussion session, the Ministry of Industry and Trade clarified a number of issues related to the implementation of power projects and energy security in Vietnam amid the the situation of energy supply, especially electricity supply is facing many difficulties when hydroelectric and thermal power reserves are almost fully exploited and the risk of energy import is increasing.

Vietnam has the advantage of being an equatorial country, with high annual sunshine hours (average from 1800-2600 hours/year) which is an advantage to develop solar energy. Vietnam has a long coastline (3260 km) and favorable terrain, the construction of wind power stations is a solution that can help improve Vietnam’s electricity output in the next years.

As reported by the Ministry of Industry and Trade, for solar power, the total planned capacity of about 10,300 MW has been operated on 90 solar power projects with a total capacity of about 5,000 MW. For wind power, as proposed by the Ministry of Industry and Trade, the Prime Minister has agreed to supplement the planning of an additional 7,000 MW of wind power, raising the total scale of wind power capacity planned to 11,630 MW.

In addition, according to Vietnam’s commitment at COP21, Vietnam will reduce the greenhouse gas emissions by 8% by 2030. And with effective support from the international community, Vietnam can cut its emissions by 25% greenhouse gas emissions by 2030. And the Clean energy technology is one of the best solutions to fulfill this commitment.

In addition, the installation, operation and maintenance of wind and solar power systems are relatively simple, at low cost therefore will save time and cost for investors. Besides, clean energy does not cause impacts on large-scale migration environment, such as deforestation, emissions of dust, water and ash, etc. In contrast, it also creates beautiful and majestic landscapes, and attractive to visitors, this is in line with Vietnam’s sustainable development goals in the future.

With economic and environmental advantages, the scientists forecast that, in the world to 2040 and 2050, the percentage of solar power capacity in total generating capacity will be 45% and 50 %; The structure of electricity production by 2050 is as follows: Number 1 is solar power: 35.8%; followed by onshore wind power: 24.3%; Offshore wind power: 12.1%; Hydroelectricity: 12.4% and the rest are other sources of renewable energy and fossils and nuclear: 15.4%.

In order to ensure the implementation of the overall plan for the coming time, the Ministry of Industry and Trade is focusing on speeding up the construction of the electricity Planning No. VIII to submit to the Government in the fourth quarter of 2020. In particular, following the contents of the Resolution No. 55-NQ/TW of the Politburo on “Vietnam’s national energy development strategy orientation to 2030, vision to 2045” on February 11th, 2020, according to which ratio of sources of renewable energy in the total primary energy supply will reach about 15-20% by 2030; 25-30% by 2045.

According to Resolution No. 55-NQ/TW, Vietnam will develop breakthrough mechanisms and policies to encourage and promote the renewable energy sources in order to replace fossil energy sources at maximum. Prioritizing the use of wind and solar energy for electricity generation; encourage investment in building power plants using urban waste, biomass and solid waste in parallel with environmental protection and economic development of the circulation. To establish and develop a number of renewable energy centers in advantageous regions and localities. Then researching and assessing the overall potential and developing development orientations for geothermal energy, ocean waves, tides and ocean currents; deploy a number of application models, conduct pilot tests to evaluate the effectiveness. To undertake technological research, formulate a number of production pilot projects and encourage the use of hydrogen energy in line with the general trend of the world. In addition, the Resolution prioritizes the development of renewable energy in line with the ability to ensure system safety with reasonable electricity costs and encourage the development of rooftop and surface solar power. To develop groundbreaking support policies and mechanisms for offshore wind power development in association with the implementation of the Vietnam’s Sea Strategy.

With advantages and priority policies for renewable energy development as above, Vietnam hopes that more international investors will invest and set up company in renewable energy to in Viet Nam.

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More Than 88,000 Billion VND Invested in Renewable Energy in Ninh Thuan

Ninh Thuan province of Vietnam is an attractive destination of foreign investors who want to invest in Vietnam energy industry.

As of June 2020, Ninh Thuan province has 34 solar power projects, 13 wind power projects that have been granted investment policy decisions, with a total capital of over 88,782 billion VND.

According to Department of Planning and Investment of Ninh Thuan province, as of June 2020, there have been 34 solar power projects/2,376.85MW and 13 wind power projects/678.95MW that have been granted investment policy decisions, with a total capital of over 88,782 billion VND, has connected to the national grid 25 projects with a total capacity of 1,556.55 MW.

Currently, some large-scale projects are being accelerated to complete in 2020, such as the Trung Nam – Thuan Nam Solar Power Plant project (450 MW) combining 220/500 kV transformer station and 500 kV, 220 kV transmission line in Phuoc Minh commune (Thuan Nam district), with a total investment of 12,000 billion VND. The completion of this project will release the capacity of renewable energy plants in Ninh Thuan and Binh Thuan areas, adding more than 1 billion kWh of electricity per year to the national electricity system.

In order to create a breakthrough, to develop quickly and sustainably, with the permission of the Prime Minister, Ninh Thuan province is the first province in the country to hire the Monitor Group of the US to formulate the provincial socio-economic development master plan of Ninh Thuan province in the period of 2011 – 2020 and vision to 2030. At the same time, hired the British Arup Group to formulate a master plan for Phan Rang -Thap Cham city development and coastal planning of the province.

According to the provincial socio-economic development master plan already approved by the Prime Minister. The province’s economic development orientation in the coming time is to build Ninh Thuan into a high quality tourist center and clean energy center of the country. In particular, priority should be given to the development of six key groups of industries, including: Energy, Tourism, Agriculture, Forestry and Fisheries, Industry, Construction and Real Estate Business, Education and Training.

Regarding energy development, Ninh Thuat province has achieved great results. The province has taken the initiative in developing the approval of the provincial Electricity Development Plan for the 2016 – 2025 period, with a vision to 2035; Ninh Thuan solar power development plan for the period of 2016 – 2020, vision to 2030 with the scale of 10,476 MW.

Especially in 2018, the province proposed and was issued a Resolution No. 115/NQ-CP by the Government on specific mechanisms and policies to support Ninh Thuan province. This is a policy of great importance to the socio-economic development of the province in the period to 2023 and the following years, with many new policy mechanisms, focusing on breakthrough industries of the province, especially the policy of building Ninh Thuan to become the center of renewable energy of the whole country.

This policy allows Ninh Thuan to enjoy the preferential electricity price mechanism of 9.35 Uscent/Kwh with a capacity of 2,000 MW until the end of 2020; developing Bac Ai accumulating hydroelectricity (capacity of 1,200 MW); Ca Na electrification center (LNG) (scale of 1,500 MW) …

Thanks to the large investment capital poured into renewable energy projects, Ninh Thuan’s GRDP in the first 6 months of 2020 reach 8,967 billion VND, increase by 8.46% over the same period; State budget revenue reached 1,770 billion VND; total investment capital of the whole society is estimated at 18,450 billion VND…

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Wind Power: The Inevitable Trend of Sustainable Development

With the increasing demand for electricity, Vietnam is also gradually considering investing in renewable energy, including wind power as the key to addressing energy security, contributing to the realization of the country’s green development strategy.

Energy is one of essential human needs and an indispensable input of economic activity. As the living standards of the people are improving, the level of production of the economy is more modern, the demand for energy is also growing, and satisfying this demand is a real challenge for almost every country.

The race to exploit fossil fuels at all costs of human beings is reaching the limits of nature’s endurance, causing polluted living environments, climate change, causing unrest for the welfare of the community and become one of the global non-traditional security issues, threatening the survival of humanity.

Being aware of that, many countries around the world have been switching from fossil fuel to renewable energy for sustainable development. In many areas, power source from renewable energy projects is equivalent to those from fossil fuel projects, breaking the threshold that we believed to be impracticable.

Currently, in Europe, nearly 50% of new power development projects are wind power projects. In China – the most populous country, in March 2017, the Government shut down its last coal-fired power plant in Beijing to switch to renewable and gas electricity and.

According to the IEA latest report, globally, in 2016, investments in wind and solar power have doubled investments in fossil-fuel power. Furthermore, it is estimated that wind, solar and gas powers will completely replace coal power in the next 25 years.

In Vietnam, the development of the economy has made demand for electricity surge while supply capacity has not developed in time. The Ministry of Industry and Trade has forecasted that average electricity production growth rate of Vietnam in the period 2016 – 2020 is 10.7% per year and the period 2021 – 2025 is 8.6% per year.

Therefore, the Government of Vietnam considers the exploitation and utilization of renewable energy resources have special and strategic meaning in terms of socio-economic, national security and defense, energy security, sustainable development and minimizing environmental impact.

Most experts said that Vietnam has enormous potential for wind power. According to a study by the World Bank, Vietnam has the largest wind energy potential in the region, surpassing Laos, Cambodia and Thailand.

Accordingly, Vietnam’s wind reserve is estimated at 513,360 MW, more than 6 times the estimated total capacity of the electricity sector by 2020. The World Bank study also showed that 8.6% of Viet Nam’s land area is very potential, convenient for the installation of large wind turbines. The corresponding figure of Cambodia is 0.2%, Laos is 2.9% and Thailand is 0.2%.

Understanding the general trend of the world as well as encouraging investment incentives of the Government, about 50 wind power projects have been registered for investment in Vietnam and there are 4 projects with total capacity of 159.2 MW has gone into commercial operation.

Most recently, the Phuong Mai 3 Wind Power Project in Nhon Hoi Economic Zone (Quy Nhon – Binh Dinh), has a capacity of 21 MW – 28 MW, including 14 turbines with a total investment of 40 – 50 million USD are invested by HALCOM Company and its international partners. With an area of 140 hectares, the project is expected to supply about 72 million kWh of electricity per year and reduce emissions by 40,000 tons of CO2 per year. According to representatives of HALCOM, the project will be implemented in 2017 – 2018. Once completed, the estimated revenue can reach 150 billion VND per year.

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Exxon Mobil Wants to Participate in Series of LNG Gas Power Projects in Vietnam

Exxon Mobil wants to invest in Vietnam, specifically invest in Vietnam energy sector.

The chain of ports, depots and LNG gas plant in Hai Phong has a scale of 4,000 MW and in Long An has a scale of about 3,000 MW.

In a conversation with Vietnam Prime Minister in June 2020, Global President of Exxon Mobil said that the Group wants to take advantage of opportunities and invest in the energy sector in Vietnam.

Accordingly, Exxon Mobil wants to invest in the chain of port, LNG gas storage and LNG power plants with the most modern technology in Hai Phong. The scale of the electricity production project from LNG is up to over 4,000 MW, expected to go into operation in the period of 2025 – 2030.

As for the current gas-electric chain with a capacity of about 3,000 MW in Long An, Exxon Mobil will ensure continuous supply of LNG directly from the United States and from some other countries. The import of LNG will contribute to creating a harmonious trade balance between Vietnam and the United States.

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