Offshore Wind Worldwide Regulatory Framework in Selected Countries 5th Edition 2024 - Flipbook - Page 375
Offshore Wind Worldwide 2024
4. OFFTAKE ISSUES
4.1 Offtake, remuneration and
tariff scheme
Under the PPA template, previously EVN
had an offtake obligation to purchase all
on-grid wind power produced for 20 years
from the date of commencement of commercial operation of the plant (provisions
are included by which these terms may be
extended). However, on 19 January 2023,
the MOIT amended the PPA template and
removed provisions allowing for extension.
The latest fixed electricity tariff for offshore
wind projects which have been "partially or
fully operational" before 1 November 2021 is
VND 2,223 per kWh (or USD0.098 per kWh)
and is adjusted in line with the VND/USD exchange rate to protect offshore wind power
developers from the depreciation of VND.
As for the portions of offshore wind projects
which have signed a PPA with EVN before 1
November 2021 but were not operational
before 1 November 2021, the ceiling price
of the electricity generation price range is
set at VND 1,816 per kWh (approximately
USD0.075 per kWh).
There is no "take or pay" commitment under
the template PPA, and the template PPA also
includes insufficient protection for curtailment risk or changes of law affecting the
investment.
375
4.2 Consequences of a project delay
Under the PPA template, if the commercial
operation date is delayed, the seller must
inform the buyer of the revised COD at least
six to 12 months before the estimated COD.
The buyer may not refuse to accept the revised COD without a legitimate reason.
The seller will breach the terms of the PPA if
it fails to achieve COD within three months
of the estimated COD (except for force
majeure events, change of COD as mentioned above or approval by the competent authority for extension of the project
schedule). In such circumstances, the seller
is liable for damages to the buyer, including
actual and direct loss suffered and the direct
benefits lost due to the breach. If the breach
cannot be resolved, the buyer has the right
to terminate the PPA.
4.3 Examples of actual and future tariffs
The latest feed-in-tariff for offshore wind
power projects is not determined by auctions but by wind regulations. An auction
scheme will likely be issued by the Government and implemented. The latest tariff
applies to projects that have been "partially
or fully operational" before 1 November
2021 and is adjusted according to the VND/
USD exchange rate. The ceiling price of the
electricity generation price range issued by
the MOIT on 7 January 2023 applies to the
portions of the projects which have signed a
PPA with EVN before 1 November 2021 but
were not operational before 1 November
2021.
