Viet Nam Energy Partnership Group

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

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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



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

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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





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






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





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.

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6

23/04/2021






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.





8

THANKS FOR YOUR

ATTENTION

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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

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2

23/04/2021

2

OPERATIONAL RESULT OF

2020 & Q1/2021

01

OPERATIONAL RESULT OF 2020

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4

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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


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%

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4


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%).

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5


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

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/20

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/20

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/20

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/20

19

09

/20

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/20

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/20

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/20

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01

/20

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02

/20

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/20

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/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

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6


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


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

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7


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

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8


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



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

16

23/04/2021

9


➢ 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 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


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

20

23/04/2021

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

[email protected] | www.deloitte.com

Viet Nam Energy Partnership Group

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