The Trung Nam side said that EVN’s halt in mobilizing 40% of the capacity of the Trung Nam – Thuan Nam solar power project was a non-compliance with the contract, and broke the commitment on the financial plan agreed upon by the credit institution, leading to the project insolvency of debt repayment.
On August 31, the Electricity Trading Company under the Electricity of Vietnam (EVN) issued Document No. 6082 announcing the cessation of exploitation for the capacity part without the electricity price mechanism of the solar power plant. Trung Nam – Thuan Nam has a capacity of 450MW. Accordingly, EVN stopped exploiting the 172.12MW capacity from 0:00 on September 1 because there is no electricity price mechanism.
In February 2022, EVN had a written notice that it would stop buying the capacity without electricity price (40% of the total project capacity) but then withdrew the document.
On the same day EVN announced the second stop of exploitation, the project investor – Trung Nam Thuan Nam Solar Power Company Limited (under Trung Nam Group) on August 31 sent a document to the Government, the Ministry of Industry and Trade, EVN and the Electricity Trading Company proposed to continue mobilizing capacity without electricity selling price.
According to the document, Trung Nam said that the 450MW Trung Nam – Thuan Nam solar power project has been in operation for more than 16 months, and has been mobilized by EVN with the capacity of the whole project, of which part of the project’s capacity is not yet available. determine the specific electricity selling price as a basis for payment to investors.
This is a conditional investment project organized by Ninh Thuan province to select investors in accordance with the law. In addition, the investor has built a transformer station, a 500kV Thuan Nam – Vinh Tan transmission line with a total cost of nearly VND 2,000 billion and will compensate by selling electricity from the exploitation of the entire 450MW project capacity.
Trung Nam said that due to the undetermined capacity, the electricity selling price has not been paid for about 22 months of exploitation, along with the COVID-19 pandemic that broke out in 2 years, the project has been cut off its generating capacity continuously for a long time. In parallel with the fact that the investor has to bear the transmission cost for renewable energy projects in Ninh Thuan province, it has had a very bad impact on the financial flow of the investor, making the investor not sufficient financial resources to fulfill the commitment obligations with the capital sponsoring unit.
“When stopping the mobilization of 40% of the project’s capacity according to the documents of the Power Trading Company, the project will only operate at 60% of the design, which will break the investor’s commitment on the financial plan. approved by credit institutions, leading to the project’s inability to repay loans, while other investors as well as EVN benefited from the 500kV transmission line due to Trung Nam’s own capital. spent to invest in building a transmission system to relieve capacity,” Trung Nam said.
The 500kV transformer station and transmission line with an investment capital of up to VND2,000 billion has been handed over VND0 to the State.Photo: Internet
On the other hand, according to the power purchase agreement signed with EVN, Trung Nam believes that stopping capacity mobilization without electricity price is not appropriate according to the terms agreed between Trung Nam and EVN. Specifically, according to Clause 5, Article 4 of the Power Purchase Agreement No. 5, in case the payment is due but there is no agreement from the Ministry of Industry and Trade on whether a part of the power plant or the whole power plant is entitled to electricity, the parties agree to record the delivered power output, the electricity bill will be paid after obtaining a written agreement from the Ministry of Industry and Trade.
“In addition, Article 9 of the contract clearly states that if EVN cuts capacity, it must notify 10 days in advance. However, the EVN side announced on August 31 that it will be cut off at 0:00 on September 1, which is less than 1 day, “said Trung Nam representative.
Besides, Trung Nam side also said that while waiting for handover of 500kV Thuan Nam substation to EVN, this project is bearing transmission costs for other renewable energy projects in Ninh Thuan with total output up to 4.2 billion kWh, equivalent to 360 billion VND, and bear the cost of management and operation of the 500kV Thuan Nam substation, causing investors to face many difficulties and under great pressure in repaying bank loans according to the plan. finance.
Therefore, the Central South has asked EVN to consider continuing to mobilize and record output for the part of the project’s capacity without electricity price. “The company is committed to strictly complying with the regulations and requirements of the competent state agencies related to the payment implementation after the price mechanism is applied, without any complaints or lawsuits” Trung Nam confirmed.
Regarding the project, on September 15, 2021, Deputy Prime Minister Le Van Thanh chaired a meeting with Ministries, sectors and People’s Committee of Ninh Thuan province to resolve recommendations from the project investor. The Deputy Prime Minister asked EVN to consider prioritizing the mobilization of the plant’s capacity because this is a project that has participated in the investment in transmission infrastructure and is transmitting on behalf of other projects in the region. At this meeting, the representative of EVN confirmed that specifically for the Trung Nam Thuan Nam Solar Power Project, EVN will prioritize reducing the project’s generating capacity by less than 3% because the project has supported transmission for many other projects in the area.