Ministry of Industry and Trade (MoIT) Presses Electricity generation and transmission of Vietnam (EVN) to Resolve Issue related to Feed-in Tariff (FIT) Pricing

What Sparks the Clashes

Ministry of Industry and Trade (MoIT) Presses Electricity generation and transmission of Vietnam (EVN) to Resolve Issue related to Feed-in Tariff (FIT) Pricing

The Feed-in Tariff (FiT) squabbles in Vietnam can be traced back to clashes over pricing and eligibility for renewable energy projects. Bedeviling matters comprise:

• Investment Dangers: Foreign parties, like those from EuroCham and ThaiCham, voice worries about investment hazards and potential legal squabbles due to uncertain or unfavorable FiT rates [1].
• Eligibility Criteria: Disputes brew over the eligibility standards for projects, particularly those disturbed by COVID-19 difficulties or constructed on agricultural land [1].
• Pricing Plans: EVN's proposed FiT compensation solutions have been outright rejected by investors, creating an impasse in negotiations [1].

What's At Stake

These clashes have far-reaching consequences for Vietnam's renewable energy sector:

• Investment Climate: Persistent squabbles might deter foreign investors, tarnishing Vietnam's investment climate [1].
• Green Energy Progress: Delays and uncertainties impede the advancement of renewable energy projects, jeopardizing the sector's growth and Vietnam's energy transformation ambitions [1].
• Litigation Hazards: Protracted legal battles may consume resources and pose risks for both investors and state-owned utility EVN [1].

Paving the Way Forward

To ease these disputes and foster a more inviting environment for renewable energy projects, several measures can be adopted:

1. Clarified Pricing Policy
2. Standardized FiT Rates: Implement clear, stable, and appealing FiT rates that inspire investment and minimize risks [5].
3. Periodic Reviews: Regularly assess and fine-tune FiT rates in alignment with market variables and to boost the expansion of renewable energy [5].
4. Transparent Eligibility Criteria
5. Unified Guidelines: Formulate and disseminate coherent directives for project eligibility, addressing issues regarding agricultural land and COVID-19 impacts [1].
6. Smooth Approval Process: Simplify the approval procedure for green energy projects to buckle the bureaucratic impediments and delays [5].
7. Dialogue and Negotiation
8. Interplay of Voices: Foster dialogues between EVN, investors, and government agencies to negotiate advantageous deals and resolve disputes amicably [1].
9. Global Collaboration: Leverage international partnerships and rules to guarantee Vietnam's green energy policy syncs with global norms and investor expectations [4].
10. Legal Structure
11. Sound Legal Support: Bolster legal structures to instill confidence in the steadfastness and predictability of Vietnam's renewable energy sector [3].
12. Arbitration System: Implement efficient and fair arbitration systems to settle disputes swiftly and fairly, shielding both investors and national interests [1].

[1] https://www.mofre.vn/Pages/Public/en-GB/Home--English/TabID/9918/ContentPageID/2423/NewsItemID/11870/Official-moIT-considers-urgent-EVN-to-address-feed-in-tariff-disputes-of-renewable-energy-projects.aspx

[2] https://www.vietnam laws.com/2020/08-03/decision-25a-nd-idesc-2020-on-developing-renewable-energy-in-viet-nam/

[3] https://www.vietnam.com/vietnam-biz/article/New-Law-Enhances-Energy-Security-for-Viet-Nam/13844.html

Wind turbines seen at a power plant in the southern province of Bạc Liêu. - VNA/VNS Photo

[4] https://www.vietnaminsider.vn/government/policy/606746-vietnam-becomes-the-new-laos-for-green-energy/

[5] https://www.reuters.com/article/us-vietnam-renewables-idUSKCN2OK0P6

1. The government of Vietnam needs to address the ongoing clashes regarding the Feed-in Tariff (FiT) for renewable energy projects, as these disputes are causing concerns among foreign investors, particularly those from EuroCham and ThaiCham, due to uncertain or unfavorable FiT rates.
2. The eligibility criteria for renewable energy projects in Vietnam have been a contentious issue, with disputes arising over projects affected by COVID-19 difficulties or built on agricultural land.
3. The Vietnam Electricity Corporation (EVN) has proposed FiT compensation solutions that have been outright rejected by investors, creating a stalemate in negotiations.
4. Protracted disputes and legal battles may deter foreign investments, resulting in a negative impact on Vietnam's investment climate.
5. Delays and uncertainties in renewable energy projects hinder their growth and Vietnam's energy transformation ambitions, jeopardizing the overall progress of the sector.
6. In order to promote a conducive environment for renewable energy projects, the government should implement clear, stable, and appealing FiT rates that inspire investment and minimize risks.
7. To ensure a smooth approval process, the Vietnamese government must simplify the procedure for green energy projects and eliminate bureaucratic impediments and delays.
8. Dialogues between EVN, investors, and government agencies are essential for negotiating advantageous deals and resolving disputes amicably, while also fostering a sense of collaboration.
9. Leveraging international partnerships and adhering to global norms and investor expectations can guarantee that Vietnam's green energy policy aligns with the expectations of foreign investors.
10. A strengthened legal structure is necessary to instill confidence in the steadfastness and predictability of Vietnam's renewable energy sector.
11. Implementing efficient and fair arbitration systems is crucial for resolving disputes swiftly and fairly, protecting both investors and national interests.
12. To keep up with the evolution in the renewable energy industry, periodic reviews and adjustments of FiT rates should be carried out in accordance with market variables and to support the expansion of renewable energy.

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