Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 315
Offshore Wind Worldwide 2023
the marine space for the construction
and operation of the OWF;
(b) a land lease decision and certificate of
land use rights for the onshore land from
the relevant provincial People’s Committee for the construction and operation
of onshore grid connection;
(c) approval of the environmental impact
assessment report from MONRE (for
projects which must obtain in-principle
investment approval from the National
Assembly, the Government, or the Prime
Minister) or the relevant provincial People’s Committee;
(d) a construction permit from the provincial Department of Construction; and
(e) an electricity operating licence from
MOIT (for electricity generation of large
plants, with special socio-economic, national defence and security importance;
electricity transmission activities) or the
Electricity Regulatory Authority.
The project company must sign a PPA with
EVN, and the grid-connection agreement
with the power distribution company (if
connected to the power distribution system) or the power transmission company
(if connected to the power transmission
system) under EVN. The above permits are
generally binding from their issuance date
unless the permit provides for a different
effective date.
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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
USD0.077 per kWh).
It should be noted that 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.
