Inspectors have uncovered that the capacity of solar power projects in Vietnam exceeds the government-approved plan by tenfold.
The Ministry independently approved 114 projects and sought approval for an additional 54 projects from the Prime Minister’s Office to be included in Power Development Plan VIII (PDP).
However, the Government Inspectorate revealed in a report on Monday, following an investigation into the management of solar power plants by the industry ministry, that none of these 168 projects has a legal basis to be added to the plan.
These violations have led to the connection of 8,600 MW of solar power to the grid by the end of 2020, surpassing the approved plan by ten times. Similar violations were identified in rooftop solar power, with the total capacity exceeding 16,500 MW by the end of 2020, 19 times the approved plan.
Despite being approved on invalid legal grounds, these projects were still eligible for the incentive feed-in tariff (FiT) of 8.38 U.S. cents per kilowatt-hour for 20 years.
The surge in solar power capacity in the central and central highlands regions outpaced the improvement in transmission capacity, causing an overload of power in certain localities such as Ninh Thuan, Binh Thuan, Phu Yen, Gia Lai, and Dak Lak. As a result, solar power plants were compelled to operate below capacity.
“The imbalance between installed capacity and transmission capacity has caused inefficiency in the grid and broke the PDP,” stated the inspectors.
The industry ministry also committed violations by granting 14 projects an incentive FiT of 9.35 cents per kilowatt-hour for 20 years, even after the incentive mechanism had expired. This led the national power monopoly, Vietnam Electricity, to incur an additional VND1.48 trillion in purchasing electricity from these projects from 2020 to June 2022.
The ministry also provided unreasonable consultation by proposing a 20-year timeframe for the incentive price period, deemed “too long” and unsuitable for establishing a competitive market, as per the inspectors. It recommended the government buy the electricity in U.S. dollars, posing implementation challenges due to exchange rate fluctuations.
“The industry ministry has exhibited lax management and irresponsibility, resulting in severe consequences,” noted the inspectors, who have proposed a further investigation by the police. They also suggested that individuals and units responsible should face appropriate penalties.
