Eliminating the fixed-price mechanism
The Ministry of Industry and Trade (MOIT) is directing the Department of Electricity and Renewable Energy to coordinate with agencies, units and international organizations such as the World Bank (WB), Asian Development Bank (ADB) to do research thereon. The bidding mechanism for renewable energy development is expected to be applied after 2021. Accordingly, investors developing renewable energy projects will be selected in the form of bidding and the investors will set the price of selling power from renewable energy projects at the lowest level. The purpose of this bidding is to encourage people and businesses to install solar power for real use, not to "push all capacity to the grid" to sell it at the same price as before and the larger the project scale is, the lower the purchase price will be. It is expected that this scheme, if approved, may partially replace Decision No. 13 on the incentive mechanism for solar power development, which expired on 31 December 2020.
If this scheme is approved, after 2021, the solar power projects will be publicly auctioned.
Moving forwards to a market of equal power trading
The hot and massive development of solar power makes the management agency unforeseen. Recently, the Ministry of Industry and Trade has also issued an urgent dispatch requesting localities to review solar power projects. The purpose is for this agency to have a basis to work out and propose solutions to operate effectively in the future, to avoid damage to investors. This is the key issue that investors are concerned about.
The bidding to select investors will bring many impacts to the market in two aspects: price and quality. If any unit wants to bid for it, they will have to build a set of basic standards on technology, qualifications and quality, etc. The Bidding Council will be the evaluating agency, the unit with better quality, ensuring the technique and progress, more optimal in the schedule will be selected. Along with that, the competition on price also contributes to the establishment of a lower and more reasonable price rate, in line with the market demand.