The Circular applies to power plants connected to the National Power Grid within Vietnam's territory, and other organizations and individuals involved are also subject to it. The Circular does not pertain to the following entities: multi-purpose strategic hydropower plants, small hydropower plants that employ the avoided cost tariff, independent power plants that invested in under the Build-Operate-Transfer (BOT) form, power plants and units that provide ancillary services, and power plants that operate under the electricity purchase price mechanism as specified in documents of competent levels.
The information clearly states that the electricity generation price of power plants is determined based on the project's reasonable and legitimate costs throughout its economic life. The internal rate of return (IRR) should be at most 12%.
As per regulations, the price of electricity generated by power plants consists of two components: the PPA price and the specific connection price (if applicable) as agreed upon by the buyer and seller by the methods outlined in this Circular. The price of electricity generation does not include taxes such as value-added tax, water resource tax, rights fee of water resource exploitation, forest environmental service fee, solid waste ecological protection fee, industrial wastewater fee (applicable to thermal power plants), and other taxes and fees as per regulations by competent state management agencies (excluding taxes and fees already included in the electricity generation pricing plan).
The base year of the PPA price should be the same or earlier than the base year of the electricity generation pricing framework of the power plant, as issued by the Minister of Industry and Trade. The PPA price of the power plant is calculated by comparing it to the base year of the electricity generation pricing framework based on the corresponding cost components, which are calculated similarly to the cost components in the electricity generation pricing framework. When the power plant's base year does not have an electricity generation pricing framework, the PPA price is calculated based on the corresponding cost components to compare with the framework of the most recent year of that type of power plant.
The Circular provides various methods to determine the base year of the PPA price for power plants. These methods include determining the average fixed price, operation and maintenance price, variable price for thermal power plants, specific connection price, and electricity generation price. Additionally, the Circular outlines PPAs for power plants that do not have an electricity purchase price mechanism set by the Government, the Prime Minister, or the Ministry of Industry and Trade, as well as temporary prices. Finally, the Circular describes the method for determining the electricity generation price for solar and wind power plants that have signed PPAs with Vietnam Electricity Group (EVN) but still need an official electricity generation price established.
In addition, The Circular guides determine the electricity generation price for commercially operated power plants. It also outlines the process for deciding the PPA price for each contract year, regulations on inspecting PPAs, and the responsibilities of all parties involved.