The Ministry of Industry and Trade (MoIT) has approved the base price for liquefied petroleum gas (LNG)-fired power produced by combined cycle gas turbine thermal power plants at VNĐ0-2,590.85 per kWh for this year.

This price does not include VAT and at VNĐ2,590.85, is equivalent to 10.56 US cents as the ceiling price, according to the decision on approving the basic price for LNG-fired power issued by the ministry early this week.

Based on this price, Electricity of Vietnam (EVN) and power plants will negotiate power prices at power purchase contracts, the ministry highlighted.

The ministry noted parameters used to calculate this base price applied to gas-fired power plants, including net capacity of 1.58 million kWh, net heat consumption rate of 6,330.2 British thermal units (BTU) per kWh at an 85-per-cent load and LNG prices of $12.98 per million BTU. The exchange rate is VNĐ24,520 per US dollar.

The price is higher than the preferential feed-in-tariff (FiT) of 9.35 US cents per kWh for solar power, which was lowered to 7.09 US cents in June 2019. For wind power, the FiT is 8.5 US cents per kWh.

According to Việt Nam's Power Plan VIII, from now until 2030, the country must produce 30,424 MW of gas power, including 7,900MW from 10 approved projects under the plan using domestic natural gas, and 22,524 MW from 13 LNG projects that have to be imported LNG from abroad.

Việt Nam now has no operational LNG-to-power projects. Nhơn Trạch 3 and Nhơn Trạch 4, the first two projects in Việt Nam, are under construction in the southern province of Đồng Nai.

Meanwhile, Phú Mỹ 3 gas-fired power plant in the southern province of Bà Rịa-Vũng Tàu switched to using LNG for power generation in April.

As of May 22, most gas power projects are in the process of investment preparation. Especially, the three projects of Cà Ná, Nghi Sơn and Quỳnh Lập with a total capacity of 4,500 MW has not yet had an investor.

Other projects that are in the process of preparing for investment such as the first phase of Hải Lăng, Quảng Ninh have not yet completed their feasibility study. Bạc Liêu, the first phase of Hiệp Phước LNG, and Ô Môn 2 has not completed negotiation of power purchase agreement.

Long An I and II projects have not completed adjustment of the investment policy and not had the approved feasibility study. 

Meanwhile, the investors of BOT Sơn Mỹ 1 and BOT Sơn Mỹ 2 projects have not yet completed the feasibility studies to get approval.

The reason for this situation is the absence of the base price for LNG-fired power, leading to investors not being able to calculate the investment efficiency.

In addition, there are also delays in site clearance work in localities. — VNS