20230418 What Goes Around... Comes Around
and the story of how wrong policy ruin an industry
Renewable energy in danger of recession
As of April 14, 2023, there were 20 projects submitted to the electricity buyers. In which, 4 projects have basically enough documents to be able to proceed to the negotiation of power purchase and sale contracts; Another 16 projects were asked to supplement the missing documents. This is a more positive signal than only 4-5 applications were sent as of March 31, 2023.
…It is known that the above unfinished project has an EPC contract value equivalent to about VND 3,000 billion, with a loan of 80%. More than 2 years have passed, even if not operating, the project has also had to bear an additional interest rate of 12%/year. Meanwhile, if it goes into operation and calculates the new price bracket, the revenue from electricity sales will be about 300 billion VND/year, while paying interest on bank loans is about 360 billion VND/year. “we want to sell ASAP for good”, Mr. TL admitted.
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The end of high prices, wind power worries about the future "Gone with the wind"
Chat with PV. VietNamNet, Mr. Vu Van Ngoc - Deputy General Director of AMACCAO Group Joint Stock Company, General Director of Khe Sanh Wind Power Project - listed a series of project operating costs after the preferential price (FiT).
First of all, the investment cost is 40 billion VND/MW, depreciation divided by 20 years. Thus, each year, depreciation must be collected at 2 billion/MW.
Meanwhile, this 40 billion dong, enterprises have to borrow 65% from banks, ie about 26 billion dong, with interest rate of 9-10% per year. Thus, interest expense is about 2.4-2.6 billion for 1 MW. It takes about 12 years for a project to pay off this part.
“A year to operate a turbine is $60,000. The project of 50 turbines is 3 million USD, the project of 20 turbines is 1.2 million USD. Thus, it takes tens of billions of dollars per year and must be signed within 10 years. Operating costs are extremely expensive, accounting for 6-8% of revenue", Mr. Ngoc calculated and added, not to mention the cost of operating substations, lines and regional infrastructure, and also losing security. about 20,000 USD/year/MW”.
In addition, insurance is also an amount that the investor is forced to buy because there is also a reserve for storms, earthquakes, landslides ... and also partly because the lending bank "forces" to buy this insurance when signing the contract. loans. Each year the insurance money is about 0.5-1% of the revenue/year (depending on the insurer), a project takes about 1.5-6 billion insurance/year
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Cancelling Quang Tri thermal ppt
In an online meeting on April 11, 2023, the two sides agreed to suspend investment procedures for the Quang Tri Thermal Power Plant Project.
Previously, Quang Tri Thermal Power Plant project with a capacity of 1,200 MW was approved by the Prime Minister for investment by EGATi in Document No. 6637/VPCP-KTN dated 12/8/2013. The project has a total investment of more than 55,000 billion VND, equivalent to 2,516 billion USD.
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Quang Ngai: Impersonating the investor to perform the groundbreaking ceremony of the Son Nham hydropower project
The investor of Son Nham hydroelectricity "fired" when he heard that another unit impersonated this company to organize the groundbreaking ceremony of the project.
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