From June 1, 2024, how are the prices in electricity purchase and sale contracts compared to the Base Year power generation price framework regulated?
From June 1, 2024, what components are included in the electricity generation price of a power plant?
Clause 1, Article 3 of Circular 07/2024/TT-BCT stipulates the principles for determining the electricity generation price as follows:
Principles for determining the electricity generation price
- The electricity generation price of a power plant is constructed based on:
a) Reasonable and legitimate costs of the Investor throughout the economic life of the project;
b) The internal rate of return (IRR) should not exceed 12%.
2. The electricity generation price of a power plant includes the following components:
a) The electricity purchase contract price: Determined by mutual agreement between the Seller and the Buyer and built according to the methods specified in Article 4 of this Circular;
b) Special connection price (if any): Determined by mutual agreement between the Seller and the Buyer and identified according to the methods specified in Article 8 of this Circular.
The electricity generation price does not include value-added tax, water resource tax, water resource exploitation right fees, forest environment service fees, environmental protection fees for solid waste and industrial wastewater (applicable to thermal power plants), and other taxes, fees, and payments as prescribed by competent state management agencies (except for taxes and fees already included in the electricity generation price plan).
The electricity purchase contract price to compare with the base year electricity generation price framework:
a) The base year electricity purchase contract price must not exceed the base year electricity generation price framework of the power plant issued by the Minister of Industry and Trade, wherein the electricity purchase contract price of the power plant to compare with the base year electricity generation price framework is calculated based on the cost components corresponding to the cost components used to calculate the electricity generation price framework;
b) If the base year of the power plant does not have an electricity generation price framework, the electricity purchase contract price of the power plant is calculated and converted based on the corresponding cost components to compare with the nearest year's electricity generation price framework of that type of power plant.
Thus, from June 1, 2024, the electricity generation price of a power plant includes the following components:
- The electricity purchase contract price: Determined by mutual agreement between the Seller and the Buyer and built according to the method for determining the base year electricity purchase contract price of the power plant;
- Special connection price (if any): Determined by mutual agreement between the Seller and the Buyer and identified according to the method for determining the special connection price.
From June 1, 2024, how is the electricity purchase contract price compared to the base-year electricity generation price framework regulated? (Image from the Internet)
From June 1, 2024, how is the electricity purchase contract price compared to the base year electricity generation price framework regulated?
Clause 4, Article 3 of Circular 07/2024/TT-BCT stipulates the electricity purchase contract price compared to the base year electricity generation price framework as follows:
- The base year electricity purchase contract price must not exceed the base year electricity generation price framework of the power plant issued by the Minister of Industry and Trade, wherein the electricity purchase contract price of the power plant to compare with the base year electricity generation price framework is calculated based on the cost components corresponding to the cost components used to calculate the electricity generation price framework;
- If the base year of the power plant does not have an electricity generation price framework, the electricity purchase contract price of the power plant is calculated and converted based on the corresponding cost components to compare with the nearest year's electricity generation price framework of that type of power plant.
What is the method for determining the special connection price?
Article 8 of Circular 07/2024/TT-BCT stipulates the method for determining the special connection price as follows:
- The special connection price (PDT) to recover the special connection costs invested or allocated by the Investor and agreed upon with the Buyer based on the investment capital, loan interest during the operation period under the loan agreement, management, operation, and maintenance costs, and other factors as agreed upon by the Seller and the Buyer to ensure the Investor recovers the construction, management, operation, and maintenance costs according to legal regulations. The unit for determining this special connection price is VND/kWh or VND/kW or VND/month.
- After the special connection costs are settled, the Seller and the Buyer will recompute the special connection price according to the above method.
- Special connection costs are considered reasonable and legitimate expenses and are included in the electricity purchase cost in the calculation of the average electricity retail price of the Vietnam Electricity Group.
Note: Circular 07/2024/TT-BCT is effective from June 1, 2024.
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