Thông tư 56/2014/TT-BCT

Circular No. 56/2014/TT-BCT dated December 19, 2014, method of determination of electricity generation costs, sequence of inspection of power purchase agreement (PPA)

Nội dung toàn văn Circular No. 56/2014/TT-BCT method of determination of electricity generation costs


THE MINISTRY OF INDUSTRY AND TRADE
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.: 56/2014/TT-BCT

Hanoi, December 19, 2014

 

CIRCULAR

METHOD OF DETERMINATION OF ELECTRICITY GENERATION COSTS, SEQUENCE OF INSPECTION OF POWER PURCHASE AGREEMENT (PPA)

Pursuant to the Government’s Decree No. 95/2012/NĐ-CP dated November 12, 2012 defining the functions, tasks, entitlements and organizational structure of the Ministry of Industry and Trade;

Pursuant to Law on Electricity dated December 03, 2004 and the Law on Amendments and Supplements to a number of articles of Law on Electricity dated November 20, 2012;

Pursuant to the Government’s Decree No. 137/2012/NĐ-CP dated October 21,2013 detailing the implementation of a number of articles of Law on Electricity and the Law on Amendments and Supplements to a number of articles of Law on Electricity;

At the request of Director General of Electricity Regulatory Authority,

The Minister of Industry and Trade promulgates the Circular regulating method of determination of electricity generation costs and sequence of inspection of PPA.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular regulates:

a) Method of determination of electricity generation costs and specimen PPA applied to entities as prescribed in Clause 2 of this Article;

b) Sequence of inspection of PPA

2. This Circular applies to the following entities:

a) Generating units that own power plants connected with the national electricity system with total nominal capacity over 30MW, power plants with nominal capacity from 30MW and under volunteer to join electricity market except multi-target strategic hydroelectric plants, independent BOT power plants and power plants using renewable energy (wind, geothermy, tides and biomass);

Other power plants without a separate mechanism prescribed by the Ministry of Industry and Trade shall follow this Circular.

b) Other relevant organizations, individuals

Article 2. Interpretation of terms

In this Circular, some terms are construed as follows:

1.       Seller means electricity generating units that are granted the operation license in electricity generation.

2.       Buyer means Vietnam Electricity.

3.       Investor means organizations, individuals that are directly involved in managing and using capital to implement power plant project investment activities.

4.       Net capacity means nominal capacity converted into measurement positions to facilitate payment between the Seller and Buyer (kW).

5.       Delivered electricity energy means all the electricity energy delivered to the Buyer by the Seller at the measurement positions.

6.       Electricity generating units mean the units that own one or some power plants.

7.       National electricity system and market operator means National Load Dispatch Center of Vietnam (A0).

8.       Total first approved project investment capital means the investment capital accompanied by fundamental design approved for the first time by competent agencies according to the Government’s Decree No. 12/2009/NĐ-CP dated February 12, 2009 on management of construction investment management or replacement documents.

9.       Settled investment capital means the entire lawful budget that is implemented during investment process to put the project into operation, settled and audited in accordance with the state regulations. Lawful budget means the budget that is implemented within design scope, approved cost estimates including adjustments and supplements in accordance with the signed contract and law provisions. Settled investment capital must be within total investment capital (approved or revised) according to the decision by competent authorities.

10.   Fundamental year means the year for determination of total approved project investment capital or settled investment capital.

11.   New power plants mean power plants without a PPA signed for the first time.

12.   Other power plants include power plants that sell surplus production electricity energy to Vietnam Electricity, power plants that supply electrical system support services and thermal power plants that are restricted to supply of main fuel.

13.   The two parties mean Seller and Buyer in the PPA.

14.   Power purchase agreement (PPA) means a specimen contract for sale and purchase of electricity executed by each power plant as prescribed in Appendix 3 hereof.

15.    Net fuel loss rate means the amount of fuel consumed to produce one kWh of electricity energy at the time of delivery (kg/kWh).

16.   Net heat loss rate means the amount of heat consumed to produce one kWh of electricity energy at the time of delivery (BTU/kWh or kj/kWh or kcal/kWh).

Chapter II

METHOD OF DETERMINATION OF PPA PRICE0}

Section 1. METHOD OF DETERMINATION OF PPA PRICE FOR NEW POWER PLANT<0}

Article 3. Principles for determination of PPA price

1. PPA price of a power plant is constructed as follows:

a) The Investor shall pay appropriate expenses for the entire economic life of the project.

b) The internal rate of return (IRR) does not exceed 12%.

2. PPA price of a thermal power plant is calculated in VND/kWh including two components as follows:

a) Electricity generation cost shall be agreed upon by the two parties in the fundamental year and shall not exceed electricity generation cost frame of thermal power plants approved by the Minister of Industry and Trade in the fundamental year. Electricity generation cost is constructed in accordance with the method prescribed in Article 4 hereof;

b) Cost of main fuel transport shall be agreed upon by the two parties in the fundamental year and determined in accordance with the method prescribed in Article 8 hereof.

3. PPA price of hydroelectric plants is the electricity generation cost calculated in VND/kWh, agreed upon by the two parties in the fundamental year and does not exceed electricity generation cost frame of hydroelectric plants approved by the Minister of Industry and Trade in the fundamental year. PPA price of hydroelectric plants is determined in accordance with the method as prescribed in Article 9 hereof.

4. PPA price is not yet inclusive of value-added-tax (VAT), tax for consumption of natural resources of water, fees of forest environment service and environmental protection for solid waste (applied to thermal power plants), expenses for construction of transmission lines and other taxes, charges according to the State's regulations (except taxes and charges included in the electricity price plan).

5. After the settled investment capital is determined, the Seller shall send to the Buyer the set of documents concerning the settled investment capital. The Seller or Buyer has the right to ask for re-determination of PPA price according to the following principles:

a) The Seller or Buyer shall issue a written request to Electricity Regulatory Authority for advices on re-negotiation of electricity price and PPA according to the settled investment capital by the two parties. Documents submitted to Electricity Regulatory Authority are instructed in Article 22 hereof;

b) After receipt of advice from Electricity Regulatory Authority, the Seller and Buyer shall carry out re-negotiation of PPA price according to the following principles:

-   Method of PPA price determination is instructed in Article 4 (for thermal power plants) and Article 9 (for hydroelectric plants) hereof;

-   Factors for calculation of PPA price is instructed in Article 4 (for thermal power plants) and Article 9 (for hydroelectric plants) hereof and updated at the same time of determination of the settled investment capital;

-   Electricity generation cost is included in the electricity generation cost frame of the year when the settled investment capital is formed;

-   Electricity generation cost takes effect since commercial operation of power plants. Yearly price is instructed in Article 12 hereof and no revision should be made to yearly electricity price of the years prior to the time the two parties sign the amended and supplemented PPA with electricity price determined on the basis of settled investment capital.

Article 4. Method of PPA price determination for thermal power plants

PPA price of thermal power plants in the fundamental year is determined in the following formula:

PC = PG + PbVC

1. PG (VND/kWh) is the electricity generation cost in the fundamental year and determined in the following formula:

PG = FC + FOMCb + VCb

Where:

FC: Average fixed price is determined in accordance with Article 5 hereof (VND/kWh);

FOMCb: Fixed price for operation and maintenance in the fundamental year is agreed upon by the two parties in accordance with Article 6 hereof (VND/kWh);

VCb: Variable price is determined in accordance with Article 7 hereof (VND/kWh);

Electricity generation cost PG does not exceed electricity generation cost frame issued by the Minister of Industry and Trade. In case capacity of thermal power plants is different from capacity of standard power plants but within ± 10% of standard power plants, apply cost frame of nearest standard power plants of the same technology and assembly number;

As for thermal power plants with total capacity from 200 MW and under and thermal power plants with capacity beyond ± 10% of standard power plants, electricity generation cost shall be determined for each specific case in accordance with the method prescribed in this Chapter in proportion to the factors defined in Appendix 1 hereof.

2. PbVC (VND/kWh) is the cost for transport of main fuel in the fundamental year determined in accordance with the method prescribed in Article 8 hereof.

3. Cost for trial operation and acceptance of thermal power plants:

a) As for the cost for trial operation and acceptance before the thermal power plant is put into commercial operation, the two parties shall carry out negotiation on the basis of total investment capital approved for the first time.

a) As for the cost for trial operation and acceptance arising after the thermal power plant is put into commercial operation, the Buyer shall be responsible for payment of fuel cost to the Seller as regulated.

Article 5. Method of determination of average fixed price for thermal power plants

1. Average fixed price for thermal power plants (FC) is determined on the basis of financial analysis of projects according to Forms 1 and 2 prescribed in Appendix 2 enclosed herewith with IRR not exceeding 12%. Input factors for the construction of average fixed price for thermal power plants (FC) is determined in accordance with the instructions set out in Clause 2 of this Article.

2. Main input factors used for calculation of average fixed price for thermal power plants (FC):

a) Total investment is determined on the basis of the total first investment capital or settled investment capital (VND); expenses for investment, upgrading of equipment to maintain operation of power plants after 20 years of commercial operation should not be included in the project’s total investment capital or settled investment capital.

b) Economic life is regulated in Appendix 1 hereof. In case a written approval of the project’s economic life issued by competent state agencies is different from the provisions set out hereof, the former shall be applied;

c) Average electricity energy annually generated at terminals is determined according to approved design terminal capacity and the number of hours of operation of the plant at average maximum capacity over years (Tmax). Tmax is determined on the basis of the approved design but not less than Tmax prescribed in Appendix 1 hereof. Proportion of power attenuation is averaged over the entire economic life of the power plant agreed by the two parties on the basis of the equipment manufacturer’s technical documents. Particular for gas turbine plants, gas supply capability is taken into account in the average electricity energy annually generated at terminals

d) Proportion of auxiliary power and losses to transformers of the power plant, losses to transmission lines (if any) is determined on the basis of approved fundamental design of the power plant or the equipment manufacturer’s technical documents (%);

dd) Time for depreciation of each group of main fixed assets is determined on the basis of average time for depreciation of each group of main fixed assets in accordance with time frame of main fixed asset depreciation as prescribed in the Circular No.45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance providing guidance on management, use and depreciation of fixed assets, or replacement documents. In case the time for fixed asset depreciation allowed by competent state agencies is different from that as prescribed by the Ministry of Finance, the former shall be applied.

e) Percentage of ownership capital and loan capital of the total first investment capital: ownership capital accounts for from 20 - 30 per cent and loan capital from 70 - 80 per cent. In case the percentage approved in writing by competent state agencies is different from that mentioned above, the former shall be applied;

g) Loan interests and period of repayment during the operation is based on loan contracts, or documents binding the Investor and credit institutions, lenders of which average interests of the loans do not exceed interest rate ceiling as regulated as follows:

Interests of loans in foreign currency are determined by adding mean value of US dollar swap rate for a ten-year term in 36 months close to the time of negotiation on LIBOR swaps carried out by the two parties to three per cent as annual average rate of bank service fees, guarantee fees and relevant charges, or the limit announced by The Ministry of Industry and Trade.- Interests of domestic currency are determined by adding average interest rate of deposits in Vietnam dong for a 12-month term (postpaid) intended for clients as individuals for five consecutive years preceding the year of negotiation, determined on September 30 annually by four commercial banks (Joint stock commercial Bank for Foreign Trade of Vietnam, Vietnam Bank for Trade and Industry, Joint Stock Commercial Bank for Investment and Development of Vietnam, Vietnam Bank for Agriculture and Rural Development or legal successors to these banks) to three per cent as average annual margin interest rate or the limit announced by the Ministry of Industry and Trade.

Total loan capital in the calculation of electricity price according to total first investment capital is determined by subtracting ownership capital from total investment capital. In case total loans from loan contracts or documents, agreements binding the investor and credit institutions, lenders are lower than total loans in electricity price calculation plan, the loan deficit during the operation is calculated as follows:

- Period of repayment is determined on the basis of repayment plan according to the financial analysis report in the approved fundamental design of which the period of repayment is at least ten years.

- Loan interest rate is determined on the basis of loan interest according to the financial analysis report in the approved fundamental design of which average loan interests do not exceed interest rate ceiling as mentioned above.

h) Enterprise income tax rate, other fees, charges are determined according to applicable regulations.

Article 6. Method of determination of fixed price for operation and maintenance of thermal power plants

Fixed price for operation and maintenance in the fundamental year FOMCb (VND/kWh) determined in the following formula:

FOMCb = FOMCbscl+ FOMCbnc

Where:

FOMCbscl: Fixed price for operation and maintenance according to major repair cost and other expenses in the fundamental year is determined according to Clause 1 of this Article (VND/kWh);

FOMCbnc: Fixed price for operation and maintenance according to workforce cost in the fundamental year is determined according to Clause 2 of this Article (VND/kWh);

1. Fixed price for operation and maintenance according to major repair cost and other expenses in the fundamental year is determined as follows;

Where:

TCscl: Total major repair cost and other expenses in the fundamental year consist of major repair cost, expenses for additional materials, outside services, and others.

In case total major repair cost and other expenses as mentioned above can not be determined, the two parties shall apply calculation method as prescribed in Clause 3 of this Article;

Pt: Generator terminal capacity according to approved design is determined on the basis of Point c, Clause 2, Article 5 hereof (kWh);

Tmax : Number of hours of operation at average maximum capacity over years are determined on the basis of Point c, Clause 25, Article 5 hereof (kWh).

ttd: Proportion of auxiliary power and losses to the plant is determined on the basis of Point d, Clause 2, Article 5 hereof (%);

kCS:  Proportion of power attenuation averaged over the entire economic life of the power plant is determined on the basis of Point c, Clause 2, Article 5 hereof (%).

2. Fixed price for operation and maintenance according to workforce cost in the fundamental year FOMCbnc (VND/kWh) is determined in the following formula:

Where:

TCnc: Total workforce cost in the fundamental year consists of payroll, social insurance cost, healthcare insurance cost, union funds and other attached allowances (VND).

In case total workforce cost as mentioned above can not be determined, the two parties shall apply calculation method as prescribed in Clause 4 of this Article;

Pt: Generator terminal capacity according to approved design is determined on the basis of Point c, Clause 2, Article 5 hereof (kWh);

Tmax : Number of hours of operation at average maximum capacity over years are determined on the basis of Point c, Clause 25, Article 5 hereof (kWh).

ttd: Proportion of auxiliary power and losses to the plant is determined on the basis of Point d, Clause 2, Article 5 hereof (%);

kCS: Proportion of power attenuation averaged over the entire economic life of the power plant is determined on the basis of Point c, Clause 2, Article 5 hereof (%).

1. Total major repair cost and other expenses TCscl (VND) are determined in the following formula:

TCcsl =VĐTXL+TB x kF,scl

Where:

VĐTXL+TB: Total investment capital for construction and equipment of a thermal power plant is determined on the basis of total investment capital as prescribed in Clause 2, Article 5 hereof (VND);

kF,scl:  Proportion of major repair cost and other expenses (%) of the thermal power plant kF,scl is regulated in Appendix 1 hereof.

2. Total workforce cost TCnc (VND) is determined in the following formula:

TCnd =VĐTXL+TB x kF,scl

Where:

VĐTXL+TB: Total investment capital for construction and equipment of a thermal power plant is determined on the basis of total investment capital as prescribed in Clause 2, Article 5 hereof (VND);

kF,scl: Proportion of workforce cost (%) of the thermal power plant kF,scl is regulated in Appendix 1 hereof.

Article 7. Method of determination of variable price of thermal power plants

Variable price of a thermal power plant in the fundamental VCb (VND/kWh) is determined in the following formula:

Where:

VCbnlc: Components of variable price revised on the basis of changes to cost of main fuel (coal, gas) for the thermal power plant in the fundamental year is determined according to the method prescribed in Clause 1 of this Article (VND/kWh);

VCbnlb: Components of variable price revised on the basis of changes to cost of secondary fuel (oil) for the thermal power plant in the fundamental year is determined according to the method prescribed in Clause 2 of this Article (VND/kWh);

VCbk: Components of variable price revised on the basis of other changes in the fundamental year is determined according to the method prescribed in Clause 3 of this Article (VND/kWh);

1. Components of variable price revised on the basis of changes to cost of main fuel in the fundamental year are determined in the following formula:

Where:

HRbqnlc: Average net fuel loss rate of main fuel agreed by the two parties on the basis of the equipment manufacturer’s specifications and calculated in proportion with loading level as prescribed in Appendix 1 hereof (kg/kWh or BTU/kWh);

Pbnlc: Cost of main fuel in the fundamental year is regulated as follows:

-   For domestic coal: Price of coal is the price at the coal supplier’s loading point including losses, management fee and insurance (if any) but not including transport cost (VND/ton). In case the cost for transport of fuel can not be separated from the coal purchase contract, the cost of fuel in the fundamental year is determined as the price of the coal purchase contract (VND/ton);

-   For imported coal: Price of coal is the price at the exporter’s port (VND/ton);

-   For gas: Price of gas is the price at the mine (VND/ton);

2. Components of variable price revised on the basis of changes to cost of secondary fuel in the fundamental year VCbnlp (VND/kWh) is determined in the following formula:

Where:

HRbqnlp: Average net fuel loss rate of secondary fuel (oil) agreed by the two parties on the basis of the equipment manufacturer’s specifications;

Pbnlp: Cost of secondary fuel in the fundamental year consists of transport cost and other charges as regulated (VND/kg).

3. Components of variable price revised on the basis of other changes in the fundamental year VCbk (VND/kWh) is determined in the following formula:

Where:

Cvlp:  Total annual cost of secondary materials of the power plant is determined on the basis of quantity and unit price of secondary materials used for generation of electricity in the fundamental year (VND);

Ckd: Total cost for starting operation consists of fuel cost and other costs (VND); as for coal-fired thermal power plant, permissible number of starts is calculated as once a year corresponding to each state of starting; as for gas turbine power plant, permissible number of starts shall be negotiated by the two parties on the basis of demand for electricity system and characteristic performance of the power plant.

Ck:  Annual cost for repair and maintenance is calculated on the basis of total capital for construction and equipment of the power plant; proportion of regular repair cost is regulated in Appendix 1 hereof (VND);

P:  Total net capacity of the power plant (kW);

kCS: Proportion of power attenuation averaged over the entire economic life of the power plant is determined on the basis of Point c, Clause 2, Article 5 hereof (%);

Tmax: Period of operation of the plant at maximum capacity is averaged over years throughout the life of the power plan project (hours) (Tmax) and regulated in Appendix 1 hereof.

Article 8. Method of determination of cost for transport of main fuel with respect to thermal power plant

Cost of main fuel transport of a thermal power plant in the fundamental Pbvc determined in the following formula (VND/kWh):

Where:

HRbqnlc: Average fuel loss rate of main fuel for coal-fired thermal power plant (kg/kWh) or average heat loss rate of main fuel for gas turbine plants (BTU/kWh), and determined on the basis of Clause 1, Article 7 hereof;

Pbv/c: Cost for transport of main fuel for generation of electricity in the fundamental year is calculated in VND/kg with respect to coal fuel or in VND/BTU with respect to gas fuel.

Article 9. Method of determination PPA price for hydroelectric plants

PPA price of hydroelectric plants Pbvc (VND/kWh) is determined in the following formula:

Where:

FC: Average fixed price of the plant is determined according to the method regulated in Article 10 hereof (VND/kWh);

FOMCb: Cost for operation and maintenance of the plant is determined according to the method regulated in Article 11 hereof (VND/kWh);

Article 10. Method of determination of average fixed price for hydroelectric plants

1. Average fixed price for hydroelectric plants (FC) is determined on the basis of financial analysis of projects according to Forms 1 and 2 prescribed in Appendix 2 enclosed herewith with IRR not exceeding 12% and input factors as instructed in Clause 2 of this Article.

2. Input factors are used for calculation of electricity price:

a) Total investment cost, economic life, proportion of auxiliary power and losses to transformers (not including losses to transmission lines if any), proportion of ownership capital, loan capital, time of depreciation, loan interests, term of repayment during operation, enterprise income tax and other taxes and charges are determined according to provisions set out in Clause 2, Article 5 hereof;

b) Average electricity energy annually generated at terminals of hydroelectric plant is determined according to approved fundamental design (kW). In case a written approval is issued by the competent agency, such written approval shall be applied.

Article 11. Method of determination of cost for operation and maintenance of hydroelectric plants

Cost for operation and maintenance in the fundamental year FOMCb is determined by the following formula (VND/kWh):

Where:

FOMCbscl: Fixed price for operation and maintenance according to major repair cost and other expenses in the fundamental year is determined according to Clause 1 of this Article (VND/kWh);

FOMCbnc: Fixed price for operation and maintenance according to personnel cost in the fundamental year is determined according to Clause 2 of this Article (VND/kWh);

1. Fixed price for operation and maintenance according to major repair cost and other expenses in the fundamental year FOMCbscl is determined in the following formula;

Where:

TCscl: Total major repair cost and other expenses in the fundamental year consist of major repair cost, expenses for secondary materials, outside services, and others (VND). In case total major repair cost and other expenses as mentioned above can not be determined, the two parties shall apply calculation method as prescribed in Clause 3 of this Article;

Abq : Electricity energy annually generated at the terminals is determined according to Point a, Clause 2, Article 10 hereof (kWh);

ttd :  Proportion of auxiliary power and losses to transformers of the power plant is determined according to Point a, Clause 2, Article 10 hereof (%).

2. Price for operation and maintenance according to workforce cost in the fundamental year FOMCbnc is determined in the following formula:

Where:

TCnc: Total workforce cost in the fundamental year consists of payroll, social insurance cost, healthcare insurance cost, union funds and other attached allowances (VND). 

In case total workforce budget as mentioned above can not be determined, the two parties shall apply calculation method as prescribed in Clause 4 of this Article;

Abq : Electricity energy annually generated at the terminals is determined according to Point a, Clause 2, Article 10 hereof (kWh);

ttd : Proportion of auxiliary power and losses to transformers of the power plant is determined according to Point a, Clause 2, Article 10 hereof (%).

3. Total major repair cost and other expenses TCscl  are determined in the following formula:

TCcsl =VĐTXL+TB x kF,scl

Where:

VĐTXL+TB: Total capital for construction and equipment of a hydroelectric plant is determined on the basis of total investment capital as prescribed in Clause 2, Article 10 hereof (VND);

kscl:  Proportion of major repair cost and other expenses (%) of the hydroelectric plant is regulated in Appendix 1 hereof.

4. Total workforce cost (TCnc ) is determined in the following formula:

TCnd =VĐTXL+TB x kF,scl

Where:

VĐTXL+TB: Total capital for construction and equipment of a hydroelectric plant is determined on the basis of total investment capital as prescribed in Clause 2, Article 10 hereof (VND);

knc:  Proportion of workforce cost (%) of a hydroelectric plant is regulated in Appendix 1 hereof.

Section 2. METHOD OF DETERMINATION OF ELECTRICITY GENERATION COST BY YEAR IN THE PPA

Article 12. Principles for determination of electricity generation by year in the PPA

1. The two parties have the right to apply average fixed price agreed annually during the PPA

In case the two parties agree to convert average fixed price as agreed into the yearly price of the PPA, the determination of this price must conform to the principles as regulated in Clause 2 of this Article.

2. Based on conditions for actual loans and project's financial capability, fixed price of thermal power plants or hydroelectric plants is converted into yearly price of the PPA ( yearly price j) provided that the average fixed price remains unchanged in comparison with the price agreed by the two parties and conforms to the following principles:

a) Financial discount rate in the calculation of yearly price is 10%;

b) The investor must perform repayment of loans for the construction of a power plant according to the term of repayment; highest proportion of revised fixed price since the date of commercial operation of the first assembly in comparison with average fixed price of thermal power plant or hydroelectric plants as agreed by the two parties does not exceed 1.2 times.

Article 13. Principles for revision of yearly price of the PPA

1. Annually, based on foreign currency loans, plan for repayment of foreign currency loans, actual figures about repayment of principals, exchange rate agreed by the two parties in the electricity price plan, exchange rate applied in the preceding year, the two parties must carry out calculation of difference of exchange rates and propose payment plan to Electricity Regulatory Authority of Vietnam for inspection and making submission to The Ministry of Industry and Trade for consideration and decision on the payment plan.

2. Components of the fixed price for operation and maintenance of thermal power plants and hydroelectric plants are revised in the following principles:

a) Price components by major repair cost and other expenses are revised on the basis of average cost slippage rate as prescribed in Appendix 1 hereof. The two parties shall study and propose mechanism of revision of price components by major repair cost and other expenses for foreign currency based items.

b) Price components by workforce cost are revised on the basis of changes to regional minimum wages at the date of payment.

Article 14. Method of determination of PPA price for thermal power plants at the date of payment

PPA price of a power plant at the time of payment for electricity bills in month t, year j PC,j,t (VND/kWh) is determined in the following formula:

Where:

: Fixed price in year j is determined according to Clause 1 of this Article (VND/kWh);

: Fixed price for operation and maintenance in month t, year j is determined according to Clause 2 of this Article (VND/kWh);

: Variable price in month t, year j is determined according to Clause 3 of this Article (VND/kWh);

: Cost for transport of main fuel in month t, year j is determined according to Clause 4 of this Article (VND/kWh);

1. Fixed price in year j (FCJ) is determined according to Article 12 hereof.

2. Fixed price for operation and maintenance in month t, year j is determined in the following formula:

Where:

: Components of the fixed price for operation and maintenance by major repair cost and other expenses in year j (VND/kWh);

: Components of the fixed price for operation and maintenance by workforce cost in month t, year j (VND/kWh);

a) Components of the fixed price for operation and maintenance by major repair cost and other expenses are determined in the following formula (VND/kWh):

Where:

: Fixed price for operation and maintenance according to major repair cost and other expenses in the fundamental year is determined according to the method as prescribed in Clause 1, Article 6 hereof (VND/kWh);

i: Slippage rate of components of the fixed price for operation and maintenance by major repair cost and other expenses as prescribed in Appendix 1 hereof;

I: Ordinal numbers of payment years starting from the fundamental year (for the fundamental year I=1).

b) Components of the fixed price for operation and maintenance by workforce cost (month t, year j) ( FOMCJscl) is determined in the following formula (VND/kWh):

Where:

FOMCbscl: Fixed price for operation and maintenance by workforce cost is determined according to the method as prescribed in Clause 2, Article 6 hereof (VND/kWh);

Lmin,j, t: Regional minimum wages at the time of payment in month t, year j (VND/person/month);

Lmin,b: Regional minimum wages in the fundamental year (VND/person/month);

1. Variable price in month t, year j VCj,t (VND/kWh) is determined in the following formula:

Where:

VCj,tnlc: Components of variable price revised on the basis of changes to cost of main fuel (coal, gas) of the power plant in month t, year j is determined according to Point a of this Clause (VND/kWh);

VCj,tnlc: Components of variable price revised on the basis of changes to cost of main fuel (coal, gas) of the power plant in month t, year j is determined according to Point a of this Clause (VND/kWh);

VCjk: Components of variable price revised on the basis of other changes in year j is determined according to Point c of this Clause (VND/kWh);

a) Components of variable price revised on the basis of changes to cost of main fuel (coal, gas) of the power plant in month t, year j is determined in the following formula:

Where:

VCbnlc: Components of variable price revised on the basis of changes to cost of main fuel (coal, gas) of the power plant in the fundamental year is determined according to the method as prescribed in Clause 1, Article 7 hereof (VND/kWh);

kHS,j :  Proportion of performance attenuation in year j (%);

Pj,tnlc: Price of main fuel (coal, gas) for generation of electricity at the time of payment in month t, year j is calculated in VND/ton for coal and VND/BTU for gas;

Pbnlc : Price of main fuel (coal, gas) for generation of electricity in the fundamental year is determined according to Clause 1, Article 7 hereof, calculated in VND/ton for coal and VND/BTU for gas.

b) Components of variable price revised on the basis of changes to cost of secondary fuel (oil) of the power plant in month t, year j is determined in the following formula:

Where:

VCbnlp: Components of variable price revised on the basis of changes to cost of secondary fuel (oil) of the power plant in the fundamental year is determined according to the method as prescribed in Clause 2, Article 7 hereof (VND/kWh);

Pj,tnlp: Price of secondary fuel (oil) for generation of electricity at the time of payment in month t, year j (VND/kg);

Pbnlp: Price of secondary fuel (oil) for generation of electricity in the fundamental year (VND/kg).

c) Components of variable price revised on the basis of other changes in year j (VND/kWh) are determined in the following formula:

Where:

VCbk: Components of variable price revised on the basis of other changes of the power plant in the fundamental year is determined according to the method as prescribed in Clause 3, Article 7 hereof (VND/kWh);

i: Slippage rate of components of variable price revised on the basis of other changes as prescribed in Appendix 1 hereof;

I: Ordinal numbers of payment years starting from the fundamental year (for the fundamental year I=1).

2. Cost of main fuel transport of thermal power plant in month t, year j (VND/kWh) is determined in the following formula:

Where:

Pbvc: Cost for transport of main fuel of the power plant in the fundamental year is determined according to the method as prescribed in Article 9 hereof (VND/kWh);

Pj,tv/c: Cost for transport of main fuel (coal, gas) at the time of payment in month t, year j is calculated in VND/ton for coal or in VND/BTU for gas;

Pbv/c : Cost of transport of main fuel (coal, gas) in the fundamental year is calculated in VND/ton for coal or VND/BTU for gas.

3. Total cost for starting in month t of power plant is determined in the following formula:

Where:

u: Order of assembly of the power plant;

U: Number of assemblies of the power plant;

F: Type of fuel (main fuel f =1, secondary fuel f=2);

S: State of starting of assembly;

S: Number of states of starting of assembly;

pu,f,s: Number of starts of assembly u, using fuel f in the state of starting s in the month;

Mu,f,s:  Quantity of lost coal (kg) for coal-fired power or quantity of lost heat for gas-fired power for a starting of the assembly u, using fuel f, in the state of starting s;

Du,f,s: Unit price for a starting of the assembly u, using fuel f, in the state of starting s is calculated in VND/kg for coal and in VND/BTU for gas.

Ckdk : Total of other costs for a starting is calculated in Vietnam dong.

Payment of the cost for starting the plant is made in accordance with the Circular No. 30/2014/TT-BCT dated October 02, 2014 of The Ministry of Industry and Trade regulating operation of competitive electricity market or replacement documents.

Article 15. Method of determination of PPA price for hydroelectric plants at the time of payment

PPA price of a hydroelectric plant at the time of payment in month t, year j is determined in the following formula:

Where:

: Fixed price in year j is determined according to Clause 1 of this Article (VND/kWh);

FOMCj,t: Price for operation and maintenance in month t, year j is determined according to Clause 2 of this Article (VND/kWh);

1. Fixed price in year j (FCJ) is determined according to Article 12 hereof.

2. Price for operation and maintenance in month t, year j is determined in the following formula:

Where:

FOMCjscl: Components of the price for operation and maintenance by major repair cost and other expenses in year j (VND/kWh);

FMOCjnc: Components of the fixed price for operation and maintenance by workforce cost in month t, year j (VND/kWh);

a) Components of the price for operation and maintenance by major repair cost and other expenses are determined in the following formula:

Where:

FOMCbscl: Components of the price for operation and maintenance by major repair cost and other expenses in the fundamental year is determined according to Clause 1, Article 11 hereof (VND/kWh);

i: Slippage rate of components of the price for operation and maintenance by other costs as prescribed in Appendix 1 hereof;

I: Ordinal numbers of payment years starting from the fundamental year (for the fundamental year I=1).

b) Components of the price for operation and maintenance by workforce cost in month t, year j is determined in the following formula (VND/kWh):

Where:

FOMCbnc: Components of the price for operation and maintenance by workforce cost in the fundamental year is determined according to Clause 2, Article 11 hereof (VND/kWh);

Lmin,j, t: Regional minimum wages at the time of payment in month t, year j (VND/person/month);

Lmin,b: Regional minimum wages in the fundamental year (VND/person/month);

Section 3. Method of determination of electricity price of power plants put into commercial operation

Article 16. Method of determining electricity price for power plants with PPA expired but economic life unexpired

1. As for power plants that have average price for the entire life, PPA price shall be applied to the following years to the end of economic life.

2. As for power plants that have no average price for the entire project life, the two parties shall negotiate on average price, yearly price since the effective year of the PPA to the end of economic life of the plant, PPA as prescribed hereof.

3. As for equitized power plants affiliated to Vietnam Electricity, apply provisions set out in Clauses 1, or 2 of this Article and the effective year shall be from the time of equitization.

Article 17. Method of determining electricity price for power plants with expired economic life or under upgrading, replacement of equipment after 20 years of commercial operation

1. Price of hydroelectric plants and fixed price of thermal power plants with economic life expired are determined on the principle ensuring that the plant recovers all the expenses serving electricity production and business activities and the time for price calculation shall follow cycle of major repair of main equipment. In case a written approval of price calculation time issued by the competent state agency, this written approval shall be put into practice. The two parties negotiate and make the report to the Ministry of Industry and Trade, Electricity Regulatory Authority for consideration.

2. Variable price of thermal power plant with economic life expired is determined according to Article 7 hereof.

3. In case the power plant is brought into upgrading or replacement of equipment to maintain operation after 20 years, PPA price shall be considered and revised appropriately upon receipt of adequate documents.

Article 18. Method of determining electricity price for other plants

1. Based on this Circular, Vietnam Electricity and generating units shall construct the method of determining PPA price, separate mechanisms in conformity with the plant and make the submission to Electricity Regulatory Authority for inspection and making the report to the Ministry of Industry and Trade for consideration and approval.

2. After written instructions are issued by the Ministry of Industry and Trade, Vietnam Electricity and generating units shall carry out negotiation to reach an agreement and make the submission to Electricity Regulatory Authority for inspection as prescribed in Articles 20, 21, 22 and 24 hereof.

Chapter III

SEQUENCE OF NEGOTIATION AND INSPECTION OF PPA

Article 19. Application of specimen PPA

1. As for new power plants, in reliance on specimen PPA as prescribed in Appendix 3 enclosed herewith, Vietnam Electricity and generating units shall carry out negotiation on the PPA between the two parties.

2. As for power plants with a PPA signed, in case either of the two parties wishes to make amendments according to the specimen PPA as prescribed in Appendix 3 enclosed herewith, the two parties shall negotiate and reach agreement and make the report to Electricity Regulatory Authority for consideration, inspection and advices as prescribed hereof.

Article 20. Sequence of negotiation on PPA

1. The investor of the power plant project shall be responsible for sending documentary requests for negotiation on PPA to the Buyer for negotiation and fulfillment of procedures for appraisal and approval for the signing of PPA before the project starts.

2. Within 15 working days since the receipt of documentary requests for negotiation on PPA from the investor, the Buyer shall be responsible for organizing negotiation with the investor on PPA. When the process of negotiation closes, the two parties must initial the draft PPA.

3. Within five working days since the draft PPA is initialled, the Buyer shall be responsible for establishing the documents for approval of the PPA and making submission to Electricity Regulatory Authority for inspection.

4. After six months since the Buyer receives documentary requests for negotiation on PPA without any agreement reached, the Buyer shall be responsible for making the report on the matters not yet agreed to Electricity Regulatory Authority for consideration and advice. As for matters beyond authority, Electricity Regulatory Authority shall be responsible for making the report to the Ministry of Industry and Trade for consideration and advice.

Article 21. Documentary requests for negotiation on PPA

1. Documentary requests for negotiation on PPA of power plants include:

a) Written request for negotiation on PPA;

b) Draft PPA as prescribed in Appendix 3 enclosed herewith;

c) Decision on project investment and construction accompanied by explanations and investment project assessment report by independent consultants and other relevant documents;

d) Decision on approval of total first investment capital of the project and main issues in fundamental design of the investment project relating to PPA negotiation, fundamental design assessment report; reports on investment capital settlement and audits; the competent agency’s decision on approval of results of settlement and auditing of investment capital (after the project is completed).

dd) Agreement on connection of the power plant to the national electricity system according to the connection plan of the power plant; agreement on SCADA/EMS, automatic protection relay system;

e) Loan contracts or any document legally binding the investor and lenders, plans or reality of disbursement of loans;

g) Contract for supply of fuel to power plants specifying cost of fuel for generation of electricity, cost for transport of fuel and other charges, point of delivery and receipt of fuel, time limit for supply of fuel.

h) Documentary calculations about losses to transformer capacity and energy, transmission lines from the power plant to the point of connection with the national electricity system; calculations about auxiliary power in the power plant;

i) Documentary calculations about fuel loss rate of coal-fired power plant or heat loss rate of gas turbine power plant;

k) Electricity price plan is determined according to Sections 1 and 2, Chapter II hereof.

l) Other relevant documents;

2. Documentary requests for negotiation on PPA of existing power plants include:

a) Written request for negotiation on PPA;

b) Draft PPA as prescribed in Appendix 3 enclosed herewith;

c) Existing documents of PPA;

d) Technical documents of the plant, technical figures of SCADA/EMS, automatic protection relay system, characteristic performance (PQ) of the assemblies till present time;

dd) Contracts for supply of fuel to power plants;

e) Electricity price plan is determined according to Sections 1 and 2, Chapter II hereof.

g) Audited financial statement of the power plant of the most recent year till the date of PPA negotiation;

Article 22. Documentary requests for re-negotiation on electricity price, PPA and documents submitted for inspection of PPA

1. Documentary requests for re-negotiation on electricity price and PPA according to settled investment capital include:

a) Written request for re-negotiation on electricity price and PPA;

b) Decision on approval of total final investment capital of the project; reports on the project’s financial settlement and audits; the competent agency’s decision on approval of financial settlement and audits of investment capital;

2. Documents submitted for inspection of PPA:

a) Written request for inspection of PPA;

b) Draft PPA initialled by the two parties;

c) Tabular calculations of PPA price prepared in excel format;

d) Documentary calculations of PPA price as prescribed in Article 21 hereof;

dd) Documentary explanations about amendments, supplements outside specimen PPA agreed by the two parties to be included in the PPA;

Article 23. Sequence of inspection of PPA

After the negotiation on PPA closes, the Buyer shall be responsible for establishing documentary requests for inspection of PPA as prescribed in Article 22 hereof and making the submission to Electricity Regulatory Authority for inspection.

The Seller and Buyer shall be responsible for making reports and relevant explanations.

2. Within five working days since receipt of documentary requests for inspection of PPA, Electricity Regulatory Authority shall be responsible for inspecting eligibility of the documentary requests and issuing a written request to the Buyer and Seller for supplements (if any) as prescribed.

3. Within 30 working days since receipt of documentary requests for inspection of PPA, Electricity Regulatory Authority shall be responsible for inspection and providing advice on PPA.

4. Within 30 working days since receipt of advice on inspection of PPA, the two parties shall be responsible for executing the PPA officially. In case Electricity Regulatory Authority is yet to give official advice on the PPA after the time limit as prescribed in Clause 3 of this Article, the two parties shall be allowed to sign the PPA officially according to agreed terms and conditions. The Buyer shall be responsible for sending 01 (one) copy of the signed PPA to Electricity Regulatory Authority for filing and monitoring the implementation.

5. PPA is deemed as inspected when the following requirements are met:

a) Electricity generation cost of the power plant is within the cost frame promulgated by the Ministry of Industry and Trade;

b) Yearly price in the PPA is determined as conformable to the principles as prescribed in Article 12 hereof;

c) Subject matters of the PPA is conformable to those of specimen PPA promulgated by the Ministry of Industry and Trade;

d) Amendments or supplements to the PPA are adequately explained in writing.

6. In case negotiated price of the power plant exceeds the cost frame promulgated by the Minister of Industry and Trade, the two parties shall be responsible for explaining items and expenses agreed during the negotiation to Electricity Regulatory Authority. Electricity Regulatory Authority shall be responsible for making the report to the Minister of Industry and Trade for consideration and handling issues beyond authority.

Article 24. Supplements and amendments to PPA

1. In case changes to regulations and policies promulgated by competent state agencies have caused adverse effects on legitimate interests of the Buyer and Seller, in reliance on proposals from the Seller or written requests from the Buyer, Electricity Regulatory Authority shall be responsible for granting permission to the two parties for re-negotiation on electricity price. As for issues beyond authority, Electricity Regulatory Authority shall be responsible for making the report to the Minister of Industry and Trade for consideration and handling. After receipt of written approval from the Ministry of Industry and Trade, Electricity Regulatory Authority, the two parties shall carry out negotiation to reach agreement and initialling the amendments and supplements to the previously signed PPA.

2. After the negotiation on the amendments and supplements closes, the Buyer shall be responsible for establishing and making submission of documentary requests to Electricity Regulatory Authority for inspection. The documentary requests for inspection of amended and supplemented PPA include:

a) Initialled amended and supplemented PPA;

b) Documentary explanations about amendments and supplements to the PPA, and accompanied documentary evidence;

c) Tabular calculations about new PPA price prepared in excel format (in case of changes made to PPA price)

3. Time limit for negotiation and inspection of amended and supplemented PPA is instructed in Article 20, Article 23 hereof.

Chapter IV

IMPLEMENTATION

Article 25. Responsibilities of Electricity Regulatory Authority

1. Carry out inspection, give advice on PPA and supplements to PPAs of power plants;

2. Provide instructions and handle difficulties arising during the negotiation on PPA between the two parties

3. Annually, calculate PPA price as prescribed in Appendix 1 hereof in reliance on opinions from the units on input factors, make the submission to the Minister of Industry and Trade for consideration and decision on amendments or supplements (if any);

4. Settle disputes arising during the implementation of PPA in case the two parties agree settlement of the dispute take place at Electricity Regulatory Authority;

5. After receipt of the report from Vietnam Electricity, Electricity Regulatory Authority shall carry out inspection, working out and making the report to the Ministry of Industry and Trade for consideration and decision on payment of exchange differences of the power plant.

6. Before January 31 annually, summarize the implementation of PPA in the preceding year between Vietnam Electricity and generating units, difficulties arising during the implementation of PPA, and make the report to the Minister of Industry and Trade for consideration and decision on handling of such difficulties;

Article 26. Responsibilities of Vietnam Electricity

1. Make submission to Electricity Regulatory Authority for inspection of PPA as prescribed, be responsible for ensuring accuracy, appropriateness and eligibility of provided figures and documents;

2. Before January 31 annually, take the initiative in cooperating with the investor in calculating exchange differences during the implementation of PPA in the preceding year as prescribed in Clause 1, Article 13 hereof and make the report to Electricity Regulatory Authority for inspection;

3. Annually, carry out considerations and make proposals to Electricity Regulatory Authority for revising input factors for calculation of PPA price as prescribed in Appendix 1 hereof and other subject matters hereof (if any);

4. Before January 15 annually, make the report to Electricity Regulatory Authority on the implementation of PPA in the preceding year with generating units, difficulties arising during the implementation of PPA, and propose handling solutions (if any)

Article 27. Responsibilities of the Investor

1. The Investor shall be responsible for:

a) Carrying out negotiation and signing PPA as prescribed hereof;

b) Providing adequate information, ensuring accuracy, appropriateness and eligibility of figures and documents provided to relevant units, agencies during the negotiation and inspection of PPA;

2. Since the first assembly is put into commercial operation, on a quarterly basis, the Investor shall make the report to Electricity Regulatory Authority on the implementation of payment of electric bills according to the form prescribed in Appendix 4 hereof;

3. Before January 15 annually, the Investor of power plants shall make the report to Electricity Regulatory Authority on the implementation of PPA in the preceding year with Vietnam Electricity, difficulties arising during the implementation of PPA, and propose handling solutions (if any);

4. Before January 31 annually, the Investor shall take the initiative in cooperating with Vietnam Electricity in calculating exchange differences during the implementation of PPA in the preceding year as prescribed in Clause 1, Article 13 hereof and make the report to Electricity Regulatory Authority for inspection;

Article 28. Implementation

1. This Circular takes effect since February 03, 2015 and replaces the Circular No. 41/2010/TT-BCT dated December 14, 2010 of the Ministry of Industry and Trade regulating method of electricity price determination; sequence and procedures for construction and promulgation of electricity generation cost frame and approval of PPA.

2. As for PPA price of the power plant that is still under negotiation before the effective date of this Circular according to the method as instructed in the Circular No. 41/2010/TT-BCT dated December 14, 2010 of the Ministry of Industry and Trade regulating method of electricity price determination; sequence and procedures for construction and promulgation of electricity generation cost frame and approval of PPA, the two parties shall the report to the Ministry of Industry and Trade, Electricity Regulatory Authority for consideration and specific instructions.

3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Industry and Trade for consideration and supplements as appropriate./.

 

 

PP THE MINISTER
DEPUTY MINISTER




Cao Quoc Hung

 

APPENDIX 1

PARAMETERS FOR THE CALCULATION OF POWER PURCHASE CONTRACT VALUE
(Enclosed to the Circular No. 56/2014/TT-BCT dated 19 December 2014 by Minister of Industry and Trade)

No.

Entry

Parameter

I

Economic life

 

1

Coal-fired thermal power station

30 years

2

Gas turbine power plant

25 years

3

Hydroelectric plant

40 years

II

Proportion of thermal power station's operational and maintenance costs (%)

 

1

Proportion of major repair cost and other expenses (kF,scl)

 

1.1

Coal-fired thermal power station

2.5%

1.2

Gas turbine power plant

4.37%

2

Proportion of workforce cost (kF,nc)

 

2.1

Coal-fired thermal power station

1.5%

2.2

Gas turbine power plant

1.9%

III

Proportion of hydroelectric plant’s operational and maintenance costs (%)

 

1

Proportion of major repair cost and other expenses (kscl)

 

1.1

Output scaled at 150 MW or lower

1.2%

1.2

Output scaled from 151 MW to 300 MW

0.9%

1.3

Output scaled at 301 MW or higher

0.6%

2

Proportion of workforce cost (knc)

 

2.1

Output scaled at 150 MW or lower

0.8%

2.2

Output scaled from 151 MW to 300 MW

0,5%

3.3

Output scaled at 301 MW or higher

0,3%

IV

Number of hours of yearly operation at maximum capacity averaged over the project’s entire life - Tmax (hours)

 

1

Coal-fired thermal power station

6.500

2

Gas turbine power plant

6.000

V

Proportion of performance attenuation averaged over the entire economic life of a thermal power station (%)

 

1

Coal-fired thermal power station

1.3%

2

Gas turbine power plant

3%

VI

Proportion of annual cost for repair and regular maintenance (%)

 

1

Coal-fired thermal power station

0.8%

2

Gas turbine power plant

0.8%

VII

Loan interest rate range (% per year)

 

1

Interest rate range of loans in foreign currency

3% per year

2

Interest rate range of loans in domestic currency

3.5% per year

VIII

Average cost slippage rate (% per year)

 

1

Slippage rate of components of the price for operation and maintenance by major repair cost and other expenses

2.5% per year

2

Slippage rate of components of variable price revised on the basis of other changes

2.5% per year

XI

Average load of thermal power station

85%

 

APPENDIX 2

PROJECT FINANCE ANALYSIS TABLES
(Enclosed to the Circular No. 56/2014/TT-BCT dated 19 December 2014 by Minister of Industry and Trade)

Table 1 – Business results forecast

Unit: …

No.

Entry

Year N

Year N+1

Year N+2

Total

I

Total income

 

 

 

 

 

1

Electricity sales income

 

 

 

 

 

2

Other benefits gained from the project (if any)

 

 

 

 

 

3

Subsidy (if any)

 

 

 

 

 

II

Total cost

 

 

 

 

 

1

Fixed asset depreciation cost

 

 

 

 

 

2

Operational and maintenance cost

 

 

 

 

 

3

Other costs (if any)

 

 

 

 

 

4

Interest cost

 

 

 

 

 

III

Gross profit (I)-(II)

 

 

 

 

 

IV

Corporate income tax

 

 

 

 

 

V

Net profit (III)-(IV)

 

 

 

 

 

Notes:

- Electricity sales income has not incurred value added tax, water resource tax, forest environment fee and other taxes and fees (if any).

- Table 01 is executed from the year when incomes arise.

 

Table 2 – Financial accumulation flow and financial norms

Unit: …

No.

Entry

Year N-1

Year N

Year N+1

Total

I

Source

 

 

 

 

 

 

1

Electricity sales income

 

 

 

 

 

 

2

Other benefits gained from the project (if any)

 

 

 

 

 

 

3

Subsidy (if any)

 

 

 

 

 

 

4

Remaining value of fixed assets (in the final year of the project)

 

 

 

 

 

 

5

Recovery of working capital (in the final year of the project)

 

 

 

 

 

 

II

Spending

 

 

 

 

 

 

1

Equity and loan capital (allocated according the project's progress

 

 

 

 

 

 

2

Other expenses (if any)

 

 

 

 

 

 

3

Repayment of original loan

 

 

 

 

 

 

4

Interest cost

 

 

 

 

 

 

5

Corporate income tax

 

 

 

 

 

 

III

Financial accrual (I)-(II)

 

 

 

 

 

 

IV

Accrual of financial discounts

 

 

 

 

 

 

V

Accrual of cumulative financial discounts

 

 

 

 

 

 

Notes:

- Electricity sales income has not incurred operational and maintenance expense, value added tax, water resource tax, forest environment fee and other taxes and fees (if any)/

- Table 02 is executed from the year when constructional works commence.

 

APPENDIX 3

SAMPLE AGREEMENT FOR PURCHASE OF POWER
(Enclosed to the Circular No. 56/2014/TT-BCT dated 19 December 2014 by Minister of Industry and Trade)

 

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Vietnam
---------------

 

 

 

 

 

POWER PURCHASE AGREEMENT

POWER PLANT OF …

 

 

 

Between

 

COMPANY [Name of the company]

(VENDOR)

 

- and -

 

VIETNAM ELECTRICITY CORPORATION

(BUYER)

 

 

 

 

 

CONTRACT NO. … /20…/HD-NMD-[Power plant’s name]

 

 

 

 

 

 

 

 

 

 

Hanoi, … [month[/ 20 ...

 

TABLE OF CONTENTS

Article 1. Definitions

Article 2. Effect and term of contract

Article 3. Sale and purchase of electricity

Article 4. Commitments

Article 5. Vendor’s duties prior to the date of commercial operations  

Article 6. Responsibilities for establishing connections and electricity measurement system

Article 7. Power plant dispatch and operation

Article 8. Invoicing and payment

Article 9. Breach of contract and legal remedies

Article 10. Termination and suspension of contract

Article 11. Legal liability limit and compensation for damages

Article 12. Indemnity

Article 13. Settlement of disputes

Article 14. Restructuring of electricity sector and transfer of rights and duties

Article 15. Retention of documents and provision of information

Article 16. Other expenses

Article 17. Authorized representatives and exchange of information

Article 18. Confidentiality

Article 19. Other stipulations

Appendix I. PRIMARY PARAMETERS OF THE POWER PLANT

Appendix II. MEASUREMENT SYSTEM AND COLLECTION OF DATA

Appendix III. AGREEMENT ON OPERATIONAL CHARACTERISTICS

Appendix IV. AGREEMENT ON SCADA/EMS SYSTEM, COMMUNICATION, PROTECTIVE AND AUTOMATIC RELAYS

Appendix V. SELLING PRICE AND PAYABLES FOR ELECTRICITY

Appendix VI. MAIN PARAMETERS FOR PRICING OF ELECTRICITY  

Appendix VII. TIME POINTS IN PROJECT SCHEDULE  

Appendix VIII. PROCEDURE FOR RELIABLE OUTPUT TEST

 

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
---------------

POWER PURCHASE AGREEMENT

 

Pursuant to the Law on electricity dated 03 December 2004 and the Law on amendments to Electricity Law dated 20 November 2012;

Pursuant to the Commercial Law dated 14 June 2005;

Pursuant to the Government’s Decree No. 137/2013/NĐ-CP dated 21 October 2013 on detailing the enforcement of certain articles of the Law on electricity and the Law of amendments to Electricity Law

Pursuant to the Circular No. 30/2014/TT-BCT dated 02 October 2014 by Minister of Industry and Trade on regulating the operation of the competitive power generation market;

Pursuant to the Circular No. …./2014/TT-BCT dated … by Minister of Industry and Trade on regulating the method for pricing of power generation and the procedure for inspection of power purchase agreements;

As per the parties' demands for sale and purchase of electricity,

As of … , at … .

The parties include:

Vendor: …

Address: …

Telephone: …                                   Fax: …

Tax code: …

Account: ...                                       Bank: ...

________________________________________________________

Represented by: …

Position: …                                                     as authorized by …

… according to the letter of authorization

no … dated …

Buyer: Vietnam Electricity Corporation

Address: ...

Telephone: …                                   Fax: …

Tax code: …

Account: ...                                       Bank: ...

________________________________________________________

Represented by: …

Position: …                                                     as authorized by …

… according to the letter of authorization

no … dated …

The parties agree to enter the Agreement for purchase of power from the power plant on the following terms:

Article 1. Definitions

In this contract, the following phrases and words are construed as follows:

1. Vendor refers to … [Company] that owns the Power plant of …

2. Buyer refers to Vietnam Electricity Corporation.

3. Trading cycle refers to a 1-hour cycle for calculation of market electricity price, starting from the first minute of each hour.

4. The available output announced by the Vendor is the readily attainable output of a generator or power plant at a definite point of time.

5. Connection point is a site for the power generation company’s connection of equipment, power grids and power plant's facilities to the National power system.

6. Point of electricity delivery is a site for the measurement of the amount of Vendor's electricity delivered to the Buyer.

7. The operator of national electric power system and electricity market commands and controls the processes of generation, transmission and distribution of electricity in the national power system and manages transactions in the electricity market.

8. Market power output price refers to the price of a unit of active power output in a trading cycle, for the calculation of the payables for power outputs by power generation companies in the electricity market.

9. Market electricity price is the price of a unit of electricity in each trading cycle, for the calculation of payables for electricity produced by power generation companies in the electricity market.

10. National power system consists of electric power generation equipment, power grids and ancillary equipment jointly connected and unanimously controlled on nation-wide scale.

11. Primary measurement system is composed of measurement equipment (meters, measurement current transformers, measurement transformers) and secondary circuits connected to the said equipment. The system is installed at the parties' agreed locations to set firm basis for the calculation of the production of electricity delivered.

12. Backup measurement system comprises every measurement equipment (meters, measurement current transformers, measurement transformers) and secondary circuits connected to the said equipment. The system is installed at the parties’ agreed locations for testing and backing up the primary measurement system. It comprises equipment independent from but technically equivalent to those of the primary measurement system.

13. Contract refers to this power purchase agreement and its appendices and amendments.

14. Dispatching order is an order for real-time steering and control of electric power system’s operations.

15. Day refers to a day in Gregorian calendar.

16. The generator's date of commercial operation means the date when the power plant's generator is ready to sell electricity to Buyer upon the fulfillment of the following requirements:

a) The power plant completes the initial reliable output test on electricity generators of a thermal power station or the acceptance test of full-load power output of generators in a hydroelectric plant;

b) The power plant is licensed to conduct electricity-related activities in the sector of power generation;

c) The parties calibrate meters to enable price-based gross payments in the competitive power generation market.

17. The power plant’s date of commercial operation refers to the date when the last generator starts commercial operations and the power plant is licensed to conduct electricity-related activities for all generators in the power generation market.

18. Power plant refers to the Power plant [name of Power plant] with the maximum established output of … MW, including … generators at [power plant's location], each of which has an output of … MW.

19. The electricity sector’s technical regulations and standards include obligatory technical regulations issued by Vietnam's competent authorities and rules, standards and practices observed by international organizations and enforced by other nations in correspondence in line with the laws of Vietnam.

20. Connection equipment refers to power transmission lines, measurement equipment system, control devices, protective relay, circuit breakers, information and communication system and buildings synchronized for power plants' linkage with points of connection.

21. Competitive power generation market is the first-level electricity market as defined in point a, section 1, Article 18 of the Electricity Law and operates according to the Ministry of Industry and Trade’s regulation on the operation of the competitive power generation market.

Article 2. Effect and term of contract

1. Effect of contract

This contract comes into force upon the parties’ authorized representatives’ official signing of the contract, unless otherwise stated.

2. Term of contract

The term of the contract, unless extended or terminated early, is stipulated as follows:

a) The contract, for power plants newly established or bearing duties to settle long-term debts from investments in their construction, commences upon its effect and expires after one of the following points of time:

(i) The closing date of the competitive power generation market as per competent governmental authorities’ decisions;

(ii) 10 years from the initial date of the power plant’s commercial operations, notwithstanding the duration of force majeure, save events defined in section 4, Article 12 of the contract.

b) The contract, for power plants bearing no repayment duty over long-term debts from investments in their construction, commences upon its effect and expires on the closing date of the competitive power generation market according to competent governmental authorities’ decisions.

Article 3. Sale and purchase of electricity

1. The contract price is defined in clause I, Appendix V of the contract.

The parties agree to set the annual fixed price FCj (VND/kWh) upon the expiration of contract to the end of the economic life of a thermal power station or a hydroelectric plant, according to  section 1.2 or section 2.2, respectively, in clause I, Appendix V of the contract. Such fixed price is a basic factor for the pricing of power plant’s electricity in subsequent power purchase agreements.

2. The contracted production of electricity produced is defined in clause II, Appendix V of the contract.

3. Buyer's duty is making following payments to Vendor for electricity on monthly basis:

a) The sum of differences as computed by Vendor according to clause III, Appendix V of the contract;

b) Total market-based payables as per the monthly payment list (including payments for market electricity, market power output and other market-based payables) as released by the operator of national electric power system and electricity market;

c) All other payables such as deferral interest and payment adjustments (if any);

d) Regulated taxes and fees, including those arising due to competent governmental authorities' amendments to laws and regulations (if any).

The parties agree to settle payables arising owing to the adjudication of disputes according to section 4, Article 8 of the contract.

4. During the intermission of the electricity market or the power plant's seclusion from the electricity market, the payables for electricity during the interruption of market-related activities are specified subject to the contract price according to clause I, Appendix V of the contract.

Article 4. Commitments

The parties undertake that:

1. Each party is legally established to operate under the laws of Vietnam and has sufficient power to enter and execute the contract and posses adequate business capacities and assets to execute its contracted duties.

2. Each party's signing and execution of the contract do not violate its corporate regulations, the laws, other agreements that it engages in, and a court's rulings or verdicts against such party.

3. The parties’ signing and execution of the contract abide by their electrical operating licenses as issued by competent authorities and relevant laws.

4. The parties are not defendants in a lawsuit, whose result may remarkably alter contract parties’ financial capacities or ability to execute their contracted duties or the validity and effect of contract, in a court, commercial arbitration or before a competent governmental authority.

5. The parties undertake to execute precisely the duties and contents in this contract.

Article 5. Vendor’s duties prior to the date of commercial operation

1. Requirements on licenses and written approvals

a) Vendor is responsible for going through regulated formalities for competent authorities’ issuance of licenses and written approvals necessary for the construction and operation of the power plant. Vendor undertakes to maintain compliance and conditions of such licenses according to the laws during the effective term of the contract;

b) In 30 days’ time upon the initial date of commercial operations of the generators and power plant, Vendor bears the duty to provide Buyer with valid copies of licenses and documents as defined in clause II, Appendix VII of the contract.

2. Reporting of time points in the project schedule

a) Vendor guarantees time points in the project schedule according to clause I, Appendix VII of the contract;

b) By the 05th of the first month of a quarter, Vendor bears the duty to make and send the report on the power plant's building progress with valid copies to Buyer to evidence and assess the advancement of the project as per commitments and to propose solutions on maintaining time points of the project.

3. Connection, test and operation

Prior to the date of commercial operation, Vendor bears the duty to connect, test and operate the power plant and connection equipment according to the electricity sector’s technical regulations and standards and Ministry of Industry and Trade's regulation on power transmission system. Moreover, Buyer shall be given valid copies of the test results of the power plant.

4. Date of commercial operation

a) Vendor bears the duty to realize the date of commercial operation according to the project's time points as per the parties' stipulations in Appendix VII of the contract or subsequent amendments. Vendor bears the duty to inform Buyer officially in writing of the former's ability to realize the date of commercial operation no later than 03 months prior to the date of each generator's commercial operation. Subsequently, Vendor must inform Buyer in writing of the former's realization of the date of commercial operation. Vendor is deemed to fail the date of commercial operation if Buyer does not receive a written notice of the realization of the commercial operation date and documents as stated in Appendix VII of the contract;

b) If a generator's date of commercial operation fails, Vendor is allowed to propose Buyer in writing to reschedule such date. Such proposal must specify reasons for rescheduling. Buyer must respond in writing to Vendor about rescheduling no later than 10 days upon the former's receipt of the written proposal for rescheduling. Buyer, if rejecting Vendor’s rescheduling proposal, must specify reasons.

Article 6. Responsibilities for establishing connections and electricity measurement system

1. Responsibilities for establishing connections

Vendor is responsible for:

a) Negotiating, investing, managing and operating the equipment for connection, transmission and delivery of electricity to Buyer at points of delivery according to Ministry of Industry and Trade’s regulation on power transmission system and relevant technical regulations and standards of the electricity sector;

b) Investing, installing, managing, operating and maintaining the power plant’s system equipment for collection, transmission of data, automatic control and protective relays for the power plant’s connection to SCADA/EMS system of the operator of national electric power system and electricity market. Such connection facilitates the operation of the power plant in the electricity market.

2. Measurement system

a) Vendor is responsible for investing, installing, managing, operating, maintaining and inspecting the equipment of the primary and backup measurement systems on annual basis according to Ministry of Industry and Trade’s regulation on electricity measurement. Competent or authorized organizations shall inspect the measurement equipment or verify the precision of such equipment. The measurement equipment must be secured with lead seal after the inspection;

b) Each party can request additional or random inspection of measurement equipment and system, if necessary. Vendor is responsible for organizing inspections at Buyer’s request. If random inspection detects measurement equipment’s deviations higher than the permissible limit, Vendor must pay for the random inspection. If deviations fall within the permissible limit, the requesting party incurs inspection fees;

c) Vendor's duty is to inform Buyer of the result of the inspection of measurement equipment. Vendor's duty is to inform Buyer in advance of the inspection of measurement equipment. Buyer is responsible for assigning its witness of the process of seal removal, inspection and lead sealing of the meters;

d) If measurement equipment's deviations exceed the permissible limit according to the Ministry of Industry and Trade’s regulation on electricity measurement, Vendor is liable for adjusting or replacing such equipment. If one of the parties considers a meter damaged or not functional, it must promptly inform the other party. Vendor bears the duty of inspection and repair;

dd) The production of electricity traded by Buyer and Vendor is defined according to the method of delivery in Appendix II of the contract.

If the primary measurement system does not function properly or its deviations, as found by an inspection, exceed the regulated precision level, the production of electricity traded during such events is defined by the backup measurement system. If the backup measurement system fails or generates deviations, during an inspection, higher than the permissible limit, the production of electricity traded is calculated as follows:

(i) If the primary measurement system functions but generates deviations higher than the regulated precision level, the production of electricity traded is determined by the primary measurement system and interpreted to an equivalent value of electricity at the deviation rate of 0%. According to the adjusted result of measurement agreed by the parties, Vendor bears the duty to calculate the payables that one of the parties owes to the other. Such payables arise during the measurement system’s inaccurate time.

(ii) If the primary measurement system does not function, the parties consider the problematic conditions and actual deviations of measurement systems according to the inspecting entity’s records and figures approved by the parties to unanimously consent to a method for calculating the production of electricity to be adjusted during the time of inaccurate measurement. If the parties fail to agree to a method and the production of electricity trade requires adjustment, the parties are responsible for settling disputes according to Article 11 of the contract.

e) If the measurement equipment burns or breaks down, Vendor is responsible for having it replaced or repaired in the shortest time to make the equipment abide by technical requirements and resume to work. The replacements or repaired equipment, before used, must be inspected according to regulations.

Article 7. Power plant dispatch and operation

1. The duty to register a method of mobilization

Vendor bears the duty to register the method for mobilizing each of the power plant's generators with the operator of national electric power system and electricity market, according to the Electricity Regulatory Authority's regulations on the procedures for establishing and approving the plan for the operation of the national power grids, Ministry of Industry and Trade's power transmission system regulations and power system dispatch procedures, and the operational cooperation procedures between Vendor and the operator of electric power system and electricity market. Buyer shall also receive a written copy of such mobilization method registration.

2. Operation of Power plant

a) Vendor is responsible for conforming to the regulations on power plant dispatch and operation according to Ministry of Industry and Trade’s regulations on power transmission system, operation of competitive power generation market and power system dispatch procedures, electricity sector’s technical regulations and standards and relevant documents. Vendor bears the duty to maintain and operate the power plant’s generators according to technical specifications in Appendix I and Appendix III of the contract;

b) Vendor bears the duty to install, operate and maintain the equipment to synchronize the power plant with the national power grids. Vendor is responsible for conforming to the Ministry of Industry and Trade’s regulation on power transmission system, electricity sector’s technical regulations and standards and other dispatch regulations upon the synchronization of the power plant with the national power grids;

c) If the methods for operation of national power grids bring threats to the power plant's primary equipment, cause injury, fatality or equipment damages, Vendor is allowed to disconnect the generators from the power system.

Article 8. Invoicing and payment

1. Invoicing and payment for electricity

a) By the fifth of each month, Vendor informs Buyer in writing of the payables for electricity with the immediate preceding month’s payment documents.

Payment documents prior to the participation in the competitive power generation market include the summary of contracted payables, written confirmation of meter-based production of electricity, and other relevant documents (if any).

Payment documents after the participation in the competitive power generation market include detailed calculation sheets on all payment differences and other payables arising (if any), and taxes and fees that Vendor incurs according to clause III, Appendix V of the contract and relevant documents enclosed (if any).

b) In 03 working days’ time upon receiving the payment documents, Buyer verifies the accuracy of such documents. Buyer, if detecting errors, informs Vendor in writing for the latter's correction of payment documents. Buyer, after inspecting the payment documents, informs Vendor in writing of the former's endorsement of such documents;

c) By the twentieth of each month, Vendor must issue payment invoices to Buyer. Such payment invoices are made in conformity to the regulations by Ministry of Finance;

d) Buyer bears the duty to transfer all amounts invoiced for the immediate preceding month’s electricity through banks, by the deadline of payments as agreed by the parties. Buyer incurs bank transfer fees;

dd) If data for invoicing is insufficient upon the release of a payment invoice (in the absence of a payment list from the operator of national electric power system and electricity market), Vendor is allowed to calculate the temporary payables for electricity by rationally estimating missing figures. The price of electricity for such temporary payments equals 80% of the contract's price. The adjusted payables constitute deductibles for the month when official data is available.

2. Payment disputes

a) If Buyer does not consent to parts or all payables invoiced, it must inform in writing of the amounts invoiced and reasons of its disapproval prior to the payment deadline. Buyer bears the duty to settle all undisputed payables by or on the due date of payment;

b) In 15 days’ time upon receiving the notice of payment dispute, Vendor must respond to Buyer officially in writing. If the parties fail to resolve payment disputes, one of the parties can settle disputes according to Article 13 of the contract;

If disputes originate from the content of the payment list of the operator of national electric power system and electricity market, the parties’ actions shall be governed by the stipulations on resolutions for disputes in Ministry of Industry and Trade’s regulations on the operation of electricity market.

c) If the party does not complains in writing about the payables in 30 days from the issue date of an invoice, it is deemed to waive its rights to complain about the payables invoiced.

3. Calculation of interest

Imposition of interest:

a) The monthly payables for electricity deferred after the deadline according to point d, section 1 of this Article;

b) The payables arising according to a decision on dispute settlement according to Article 13 of the contract;

c) The adjusted payables for monthly electricity according to point dd, section 1 of this Article.

Interest accrues on monthly basis from the day immediately following the payment deadline to the actual date of payment fulfillment. The rate of such interest equals the average rate of 12-month deposit’s accrual interest rates for Vietnamese currency, as defined by four commercial banks including Vietcombank, Vietinbank, BIDV and Agribank or legitimate successors of such banks on the due date of the invoice, plus an annual interest margin rate of 3%.

4. Deductibles

The parties may deduct debts, disputed amounts settled, adjusted amounts and monthly interest from the monthly payables for electricity in the nearest month’s invoice.

Article 9. Events affecting the contract and legal remedies

1. The following events affect Buyer’s execution of the contract.

a) The events related to Vendor’s dissolution or bankruptcy:

(i) Vendor is dissolved (except for pre-merger or pre-consolidation dissolution);

(ii) Vendor fails to settle due debts;

(iii) Vendor transfers or merges its entire entity with the creditors or with another entity for creditors’ benefits;

(iv) A court issues its rulings on the bankruptcy procedure against Vendor.

b) Vendor commits serious violations of its duties as stated in the contract and fails to correct such violations in 90 days upon Buyer's notice of such violations.

c) Vendor is suspended by competent authorities’ decisions.

2. The following events affect Vendor’s execution of the contract

a) The events related to Buyer’s dissolution or bankruptcy:

(i) Buyer is dissolved (except for pre-merger or pre-consolidation dissolution);

(ii) Buyer fails to settle due debts;

(iii) Buyer transfers or merges its entire entity with the creditors or with another entity for creditors’ benefits

(iv) A court issues its rulings on the bankruptcy procedure against Buyer;

b) Buyer commits serious violations of its duties as defined in the contract and fails to correct such violations in 90 days upon Vendor’s notice of such violations;

c) Buyer is suspended by competent authorities' decisions.

3. Legal remedies

a) If an event affecting the party’s execution of the contract occurs, the affected party has the right to enforce the legal remedies, as stated in Article 10 of this contract, against the perpetrating party;

b) Legal remedies in this contract do not nullify each other or obstruct other remedies.

Article 10. Termination and suspension of contract

1. Termination of contract by agreement

The parties can engage in a written agreement on early termination of contract.

2. Unilateral termination of contract

a) If an affecting event, as defined in point a, point b, section 1 or point a, point c, section 2, Article 9 of the contract, occurs, continues and affects one of the contract parties, the affected party is allowed to unilaterally terminate the contract 90 days after its delivery of a written notice to the other party;

b) If force majeure affects one party and continues in at least 180 days, the other party is allowed to unilaterally terminate the contract 30 days after its delivery of a written notice;

c) If an event affecting the party’s execution of the contract, as defined in point b, section 1 or point b, section 2, Article 9 of the contract, occurs, the affected party is allowed to unilaterally terminate the contract 30 days after its delivery of a written notice.

3. Suspension of contract

Buyer is allowed to suspend the contract, after informing Vendor, if Electricity Regulatory Authority suspends Vendor from participating in the competitive power market or by competent authorities from operating in the power generation sector. Contract suspension time must not exceed the duration of the suspension of participation in the competitive power generation market or operation in the electricity sector.

Article 11. Compensation for damages

1. The violating party is responsible for compensating the affected party for damages caused by the former's violations. Damages include losses, damages or costs that the affected party has incurred while executing its contracted rights and duties. The method for calculation of damages is governed by the Civil Law.

2. The compensated party, if claiming for damages, shall promptly inform the compensating party in writing of the nature of the events for damage claims. The compensated party's deferral of its notices shall not impinge on the compensating party’s duties of compensation, unless the compensating party suffers from actual damages due to the compensated party’s delay.

Article 12. Indemnity

1. The violating party is exempt from liabilities in the following events:

a) An event of indemnity, as agreed by the parties, occurs;

b) One party's faults cause all of the other's violations;

c) One party commits violations when fulfilling a competent governmental authority's decisions, which the parties could not be aware of upon their signing of the contract;

d) Force majeure occurs

Force majeure is unavoidable beyond one party’s control and obstructs or delays that party’s execution of its contracted duties, partly or fully, despite its implementation of rational measures.

Force majeure obstructing or delaying the parties' execution of their contract duties must overwhelm the affected party's reasonable control and derive from none of its faults or negligence. Moreover, the affected party fails to avoid such events despite its implementation of reasonable solutions, practices, procedures and standards. Such events include but are not limited to:

i) A decision by a court or competent authority causing adverse effects on one party’s execution of its contracted duties;

ii) Natural disasters including fire, explosion, drought, flood, volcanic eruption, earthquake, landslide, tide, storm, tornado, hurricane or similar events;

iii) Riot, demonstration, revolt, insurgency, war activities whether war is declared or not, opposition, terrorism, sabotage, embargo, blockade, quarantine or similar events;

iv) Vendor’s power plants or assets are nationalized, deprived or seized according to competent governmental authorities' decisions;

v) Vendor is not licensed by competent authorities or fails to obtain written approvals necessary despite its fulfillment of all duties according to the laws related to the said licenses and written approvals.

2. Announcement and endorsement of indemnity

a) The violating party must inform the other in writing of exemptions and possible consequences;

b) When indemnity ends, the violating party must immediately inform the other. If the violating party fails or delays its announcements to the other party, it must compensate for damages caused.

c) The violating party bears the duty to evidence its indemnity with the affected party.

3. Indemnity and refusal to execute the contract in force majeure

a) The party committing violations due to force majeure is responsible for regularly reporting to the other party about the former’s implementation of solutions against force majeure or information reasonably requested by the other party. Such reports shall evidence the violating party's adducing of force majeure. The other party must be informed of force majeure's end time in 48 hours from the finis of such events, unless loss of communication occurs;

b) The party affected by force majeure is only excused for its non-execution or delay of contracted duties due to such events after it release notices and executes duties of recovery according to point a of this Article;

c) If force majeure obstructs one party's execution of its contracted duties in at least 180 days, one of the parties is allowed to unilaterally terminate the contract according to point b, section 2, Article 10 of this contract.

Article 13. Settlement of disputes

1. If disputes between the contract parties arise, the party provoking disputes must inform the other party in writing of the contents of such disputes. The parties are responsible for discussing solutions against disputes in 60 days upon the date of the notice from the party raising such disputes. The parties are responsible for discussing disputes over payments in 15 days. The parties are allowed to negotiate and execute an extension of dispute settlement time in writing.

2. If the parties fail to settle disputes through discussions within the time limit as per section 1 of this Article, the parties shall agree to forward their disputes to the Electricity Regulatory Authority or other authorities as unanimously selected by the parties to settle disputes according to relevant laws.

Article 14. Restructuring of electricity sector and transfer of rights and duties

1. Restructuring of electricity sector and transfer of Buyer’s rights and duties

The parties agree that Buyer may be reorganized, restructured, dissolved or gradually deprived of its sole capacity of purchasing electricity for the conversion of the electricity sector's model to that of the competitive power market according to the pathway approved by Prime Minister or subsequent written amendments. When a competent governmental authority issues a decision on reorganizing, restructuring or dissolution, Buyer is allowed to assign all or parts of its contracted rights and duties without Vendor's consent to one or many successors, which are defined by the competent governmental authority. Such successors are responsible for executing Buyer’s legal rights and duties according to the laws.

Vendor must approve in writing all of Buyer’s assignment or relegation of its rights and duties from this contract.

2. Transfer of Vendor’s rights and duties

Vendor is only allowed to assign its rights and duties from this contract to successor(s) after obtaining Buyer’s written consent. Buyer cannot reject Vendor’s assignment or relegation without a reason. However, Vendor can relegate or assign parts or all of its contracted rights and duties on financing or financial arrangements for the power plant without Buyer’s agreement. The effect of this contract survives to continue the benefits and duties of Vendor's successors, assignees or relegated entities.

3. Transition to the competitive wholesale market

If the wholesale market or other models as per competent governmental authorities' decisions replace the competitive power market during the term of this contract, the parties are responsible for negotiating changes or replacements of this contract in consonance with the new electricity market structure on the condition that the parties' economic values from the contract remain unaffected.

Article 15. Retention of documents and provision of information

1. Retention of documents

The parties are responsible for retaining documents, data, materials or information evidencing the accuracy of invoices, prices or calculations as per the contract or proving the parties' conformity to the contract.

2. Provision of information

Each party is responsible for providing the other party with figures, materials or papers necessary at reasonable level to evince the accuracy of payment invoices, pricing formulas or calculations as per the contract or verify the parties' abidance by the contract.

Article 16. Other expenses

Each party is responsible for paying taxes and fees or settling debts arising during its execution of the contract. The parties agree that this contract is not inclusive of expenses for power transmission, power distribution, connection or similar expenses. Each party is responsible for covering such expenses according to current regulations.

Article 17. Authorized representative and exchange of information

1. Authorized representative

The authorized representatives of the contract parties are:

Vendor:                                                    Buyer:

_________________________               __________________________

_________________________               __________________________

2. Exchange of information

a) Notices, invoices or essential information exchanged during the enforcement of this contract must be executed in writing. Their issue dates and relation to the contract must be clearly specified. The original of a fax must be sent by pre-paid post. Notices, invoices or information must be delivered to the following addresses:

Vendor: _________________________________

                  ________________________________

Buyer: _________________________________

                  ________________________________

b) Notices, invoices or information sent as per point a of this Section are deemed received:

(i) when delivered by hand; or:

(ii) when proof of delivery by guarantee post is signed; or:

(iii) when a fax is actually received and the sender attains a confirmation of no fax delivery errors; or:

(iv) when a regular postage's arrival is confirmed.

Article 18. Confidentiality

Each party bears the duty to maintain confidentiality of information and documents given by the other party as per the contract. Each party shall not disclose, publicize or exploit such information and documents for any purposes save the execution of its contracted duties. Exceptions are:

1. Documents and information are publicized or exploited according to the laws.

2. Documents and information are demanded by competent authorities.

3. Documents and information are announced or publicized by entities outside the contract.

Article 19. Other stipulations

1. Amendments

Every amendment to the contract must be executed in writing. Electricity Regulatory Authority shall inspect such amendments and provide its comments in writing.

2. Completion of contract

This contract is the final complete agreement between the parties and replaces all previous discussions, information and correspondences arising prior to the signing of this contract.

3. Third party

This contract only benefits its parties and does not constitute any benefits or duties for a third party.

4. Void of joint venture

This contract does not constitute a joint venture or association between the parties or impose any legal duty or liability related to a joint venture or association on any of the parties. None of the parties is allowed to engage in or represent the other party to engage in an agent contract or act as a representative to perform duties against the other party.

5. Waiver of rights

One party's relinquishment of its contracted duties must be executed in writing and endorsed by its authorized representative’s signature. One party's non-execution or deferral of its rights from this contract shall not be construed as its abnegation of such rights.

6. Execution of remaining duties

Termination, closure or expiration of contract does not end the parties’ execution of their remaining duties as per the contract.

7. Governing law

The contract is interpreted and executed as per the laws of Vietnam.

8. Severability

If a part of the contract does not correspond with the laws or becomes void as per a competent government authority’s decision, other parts of the contract sustain effect on the condition that remaining parts constitute sufficient contents without the ineffectual part.

This contract is executed into 09 equally valid originals. Each party retains 04 originals. Vendor is responsible for sending one original to the Electricity Regulatory Authority.

 

VENDOR’S REPRESENTATIVE

(Title)

(Sign and seal)

(Full name)

BUYER'S REPRESENTATIVE

(Title)

(Sign and seal)

(Full name)

 

Appendix I

PRIMARY PARAMETERS OF THE POWER PLANT

(Enclosed to the Contract No. ... dated ...)

This includes description, charts and technical specifications of the power plant

1. Turbine

a) Quantity

b) Type

c) Manufacturer

2. Boiler (in a thermal power station)

a) Quantity

b) Boiler maximum continuous rating

c) Steam pressure

d) Temperature of saturated steam in steam drum

dd) Temperature of superheated steam

e) Temperature of water filtered and supplied

g) Boiler’s output

h) Fuel consumption

i) Temperature of heated air

k) Temperature of exhaust gases

3. Electric generator

a) Quantity

b) Type

c) Generator’s output (MVA)

d) Output voltage (kV)

dd) Cosj

e) Rotations (per minute)

g) Frequency

h) Supplier

4. Transformer

a) Quantity

b) Voltage (MVA)

c) Transformer ratio

d) Wiring diagram

dd) Short-circuit voltage Uk

e) Type (Technical description of the transformer)

5. Governing and excitation systems

6. Electricity distributor and breaker

a) Breaker for … kV

- Quantity

- Type

b) Disconnector switch for … kV

- Quantity

- Type

c) Current transformer for … kV

- Quantity

- Type

d) Voltage transformer for … kV

- Quantity

- Type

dd) Lightning arrester for … kV

- Quantity

- Type

e) Capacitor and high-frequency choke

- Quantity

- Type

g) Protective relay and automatic control system, ancillary equipment system

7. Connection to the national power grids

a) Connection line

b) Type of connection lines

c) Rated voltage (… kV)

d) Conductor

dd) Anti-lightning cord

e) Circuit length

* The investor shall update parameters on the date of commercial operation

 

Appendix II

MEASUREMENT AND DATA COLLECTION SYSTEM

(Enclosed to the Contract No. … dated …)

I. Location and features of the measurement system

1. Location for the installation of the measurement system:

Primary and backup measurement systems are installed at the power plant according to the agreement no ... by ... on technical design of electrical measurement system. (which is an appendix of the contract).

2. The measurement system’s features must conform to the Circular by Ministry of Industry and Trade on electrical measurement.

II. Technical requirements for the measurement system

Technical requirements for measurement equipment, measurement circuit, lead seal method and meters' data gathering and reading system must abide by the Circular by Ministry of Industry and Trade on electrical measurement.

III. Location for measurement

The parties agree to use the power plant’s current measurement spots as follows:

Generator

Primary measurement system

Backup measurement system

[...]

[...]

[...]

[...]

[...]

[...]

[...]

IV. Method for the calculation of the production of electricity delivered

1. On the first of each month, the parties' legal representatives shall record and confirm the meters' indicators at 0 o'clock on the first of the month and the immediate preceding month’s production of electricity delivered in writing.

a) The following formula defines the production of electricity delivered by Vendor to Buyer in a billed month:

Including:

AG,i:  The relevant production of electricity outward at the measurement spot i of the primary measurement system in the month;

AG:  The production of electricity that Buyer pays to Vendor in the billed month (kWh)

b) The following formula defines the production of electricity that Vendor receives from the national power grids in a billed month:

Including:

AN,i: The relevant production of electricity inward at the measurement spot i of the primary measurement system in the month;

AN: The production of electricity that Vendor pays for ... [power corporation] according to the electricity selling price list for industrial customers as per competent governmental authorities’ regulations (kWh).

 

Appendix III

AGREEMENT ON OPERATIONAL CHARACTERISTICS

(Enclosed to the Contract No. ... dated ...)

The parties agree to the following main operational characteristics of the power plant:

1. Generator’s generative output

a) Minimum generative output: … MV.

b) Maximum generative output: ... MV.

2. Time for start and synchronization

The following table defines the time for start and synchronization of generators with the national power grids from generators’ shutdown conditions:

Condition

Shutdown time

Time from start to synchronization

Cold boot

From ... hours

… hours

Warm boot

From … hours to … hours

... hours

Hot boot

Less than … hours

… hours

3. Load variation speed

a) Average load reducing speed: ... MW/minute

b) Average load increasing speed: … MW/minute

4. Reactive power, voltage regulation and frequency limit in normal operational conditions

a) The power plant operates at the power factor of 0.85.

b) Voltage regulation: The power plant's operations must maintain a voltage variation rate of ± 5% of the rated voltage at the connection points with the National power grids.

Frequency limit: The power plant operates with the frequency range of 49.5 to 50.5 Hz.

c) Capacity of frequency regulation.

 

Appendix IV

AGREEMENT ON SCADA/EMS SYSTEM, COMMUNICATION, PROTECTIVE AND AUTOMATIC RELAYS

(Enclosed to the Contract No. … dated …)

 

Appendix V

PRICE AND PAYMENT FOR ELECTRICITY

(Enclosed to the Contract No. … dated …)

I. Contract price of electricity

1. Contract price for thermal power station

1.1 General:

The following formula sets the contract price for a thermal power station at the payment time in month t, year j (PC,j,t):

Including:

Fixed price in the year j (VND/kWh);

: Fixed price for operation and maintenance in month t, year j (VND/kWh);

: Variable price in month t, year j (VND/kWh);

: Price for transportation of main fuel in month t, year j (VND/kWh).

1.2 Fixed price:

Average fixed price for multiple years (exclusive of value added tax) is … (VND/kWh);

The following table sets the annual fixed price FCj (VND/kWh) from the initial date of commercial operation to the end of the power plant’s economic life (exclusive of value added tax):

Year

1

2

3

4

...

...

Fixed price (VND/kWh)

 

 

 

 

 

 

1.3 Fixed price for operation and maintenance

The following formula sets the fixed price for operation and maintenance in month t, year j (exclusive of value added tax, natural resource tax on exploitation of surface water, environmental protection fee on solid waste):

Including:

: Components of the fixed price for operation and maintenance by major repair cost and other expenses in year j (VND/kWh);

Components of the fixed price for operation and maintenance by workforce cost in month t, year j (VND/kWh);

a) Components of the fixed price for operation and maintenance by major repair cost and other expenses in year j are determined in the following formula (VND/kWh):

Including:

 Components of fixed price for operation and maintenance by major repair cost and other expenses in the base year are … (VND/kWh);

i: Slippage rate of components of the fixed price for operation and maintenance by other expenses is 2.5% per year (or according to the Circular on methods for power generation pricing and procedures for inspection of electricity purchase contracts);

l: Ordinal number of a payment year from the base year (I=1 in the base year).

Components of the fixed price for operation and maintenance by workforce cost in month t, year j are determined in the following formula (VND/kWh):

Including:

: Components of fixed price for operation and maintenance by workforce cost in the base year are … (VND/kWh);

: Minimum regional wage at the payment time in month t, year j (VND per person per month);

: Minimum regional wage in the base year is … (VND per person per month).

1.4. Variable price:

Variable price in month t, year j (VND/kWh) is determined in the following formula:

 = + +

Including:

: Components of variable price fluctuated according to changes of main fuel cost (coal, gas) of the power plant in month t, year j (VND/kWh);

: Components of variable price revised according to changes of secondary fuel cost (oil) of the power plant in month t, year j (VND/kWh);

: Components of variable price revised according to other changes in the power plant in year j (VND/kWh);

a) Components of variable price revised according to changes of main fuel cost:

Components of variable price revised according to changes of main fuel cost (coal, gas) of the power plant in month t, year j (VND/kWh) are determined in the following formula:

Including:

: Components of variable price revised according to changes of main fuel cost (coal, gas) of the power plant in the base year are … (VND/kWh);

kHS,j :  proportion of performance attenuation in year j (%);

: Price of main fuel (coal, gas) for generation of electricity at the payment time in month t, year j is ... (VND/ton) for coal; or … (VND/BTU) for gas;

: Price of main fuel (coal, gas) for generation of electricity in the base year is … (VND/ton) for coal; or … (VND/BTU) for gas;

b) Components of variable price revised according to changes of secondary fuel cost:

Components of variable price revised according to changes of secondary fuel cost (oil) of the power plant in month t, year j (VND/kWh) are determined in the following formula:

Including:

: Components of variable price revised according to changes of secondary fuel cost (oil) of the power plant in the base year are … (VND/kWh);

: Price of secondary fuel (oil) for generation of electricity at the payment time in month t, year j is … (VND/kg);

: Price of secondary fuel (oil) for generation of electricity in the base year is … (VND/kg).

c) Components of variable price revised according to other changes:

Components of variable price revised according to other changes of the power plant in year j (VND/kWh) are determined in the following formula:

Including:

: Components of variable price revised according to other changes of the power plant in the base year are … (VND/kWh);

i: Slippage rate of components of variable price revised according to other changes is 2.5% per year (or according to the Circular on methods for power generation pricing and procedures for inspection of electricity purchase contracts);

I: Ordinal number of a payment year from the base year (I=1 in the base year).

1.4. Price for transportation of main fuel:

Price for transportation of main fuel of the power plant in month t, year j (VND/kWh) is determined in the following formula:

Including:

: Particular variable price of the power plant in the base year is ... (VND/kWh);

: Charge for transportation of main fuel cost (coal, gas) and other expenses for generation of electricity at the payment time in month t, year j are … (VND/ton) for coal; or … (VND/BTU) for gas, as considered by Buyer;

: Charge for transportation of main fuel cost (coal, gas) and other expenses for generation of electricity in the base year are … (VND/ton) for coal; or … (VND/BTU) for gas.

2. Contract price for the hydroelectric plant

2.1. General:

The contract price for the hydroelectric plant at the time of payment for electricity in month t, year j (PC,j,t) is determined in the following formula:

Including:

: Fixed price in year j (VND/kWh);

: Price for operation and maintenance in month t, year j (VND/kWh);

2.2. Fixed price:

Average fixed price for multiple years (exclusive of value added tax) is … (VND/kWh);

Annual fixed price FCj (VND/kWh) from the initial date of commercial operation to the end of the power plant’s economic life (exclusive of value added tax) is stipulated in the following table:

Year

1

2

3

4

...

...

Fixed price (VND/kWh)

 

 

 

 

 

 

2.3. Price for operation and maintenance:

The price for operation and maintenance in month t, year j FOMCj,t (exclusive of value added tax, water resource tax, payment for forest environmental services) is determined in the following formula:

Including:

: Components of the price for operation and maintenance by major repair cost and other expenses in year j (VND/kWh).

: Components of the price for operation and maintenance by workforce cost in month t, year j (VND/kWh);

a) Components of the price for operation and maintenance by major repair cost and other expenses in year j are determined in the following formula (VND/kWh):

Including:

 Components of the price for operation and maintenance by major repair cost and other expenses in the base year are … (VND/kWh);

i: Slippage rate of components of operation and maintenance price by other expenses is 2.5% per year (or according to the Circular on methods for power generation pricing and procedures for inspection of electricity purchase contracts);

I: Ordinal number of a payment year from the base year (I=1 in the base year).

b) Components of the price for operation and maintenance by workforce cost in month t, year j are determined in the following formula (VND/kWh):

Including:

: Components of the operation and maintenance price by workforce cost in the base year are … (VND/kWh);

: Minimum regional wage at the payment time in month t, year j (VND per person per month);

: Minimum regional wage in the base year is … (VND per person per month).

II. Contracted production of electricity

1. Average production of electricity by the power plant in multiple years at the delivery point during the term of the contract is [...] kWh.

2. The contracted production in year N is determined by the operator of electric power system and electricity market during its making of the subsequent year's operational plan through the following formula:

QC = α x AGO

Including:

QC: the contracted production of electricity in the year (kWh);

AGO: the power plant’s production planned for year N (kWh);

α: the proportion of contracted production (%) as decided by competent governmental authorities on annual basis.

3. The power plant's production annually planned is determined by the operator of national electric power system and electricity market during the latter’s making of the subsequent year’s operational plan according to the regulation on the operation of the competitive power generation market, via the following formula:

AGO = EGO if a x GO ≤ EGO ≤ b x GO

AGO = a x GO if EGO < a x GO

AGO = b x GO if EGO > b x GO

Including:

AGO: the power plant’s production planned for year N (kWh);

GO: the average production of electricity in multiple years as stated in section 1 of this clause. In the first year of operation, GO is calculated for each generator;

EGO: the power plant’s production planned for year N as calculated via the market simulation model by conditional scheduling method after converted to the equivalent value at the measurement spot according to the regulation on the operation of the competitive power generation market (kWh).

a, b: coefficient of correction of annual production; a = 0.9 and b = 1.1 or as regulated by the Ministry of Industry and Trade.

4. The power plant’s contracted production in the month and in trading cycles of the following month is determined by the operator of national electric power system and electricity market during the making of the subsequent year’s operational plan according to the regulation on the operation of the competitive power generation market.

III. Contracted payment for electricity

1. Total sum of payments for differences according to the contract in month t is determined in the following formula:

Including:

: Total payments for differences in electricity according to the contract in month t (VND), exclusive of value added tax;

D: Total amount of days in month t;

d: Trading date in month t;

i: Trading cycle i on trading date d;

: Contract price (strike price) as stated in section I.1.1 or section I.2.1 of this Appendix; 

SMPd,i: The market price of electricity (pool purchase price) in trading cycle i, date d, month t (VND/kWh) as determined and announced by the operator of national electric power system and electricity market according to Ministry of Industry and Trade’s regulation on the operation of the competitive power generation market;

CANd,i: The market output price in trading cycle i, date d, month t (VND/kW) as defined and announced by the operator of national electric power system and electricity market according to Ministry of Industry and Trade's regulation on the operation of the competitive power generation market;

: Contracted production in trading cycle i, date d, month t (kWh) as calculated by the operator of national electric power system and electricity market by the methods defined in Ministry of Industry and Trade’s regulation on the operation of the competitive power generation market.

2. Total amount of monthly payments for electricity according to the contract (Rt) is determined as follows:

Rt = (RC,t + RTT,t + Rk,t ­+ RTh) x (1+VAT)

Including:

RC,t:  Total payments for differences in electricity as per the contract in month t are determined as per section 1, clause III of this Appendix (VND);

RTT,t: Total market payments as per the payment list (including the market electricity payment, market output payment and other market payments) in month t as determined and provided by the operator of national electric power system and electricity market according to Ministry of Industry and Trade's regulation on the operation of the competitive power generation market;

Rk,t: Sum of other payments arising in month t, resulting from dispute settlement, deferral interest, and correction payments (if any) (VND);

RTh: Taxes and fees as regulated by competent governmental authorities, as follows:

- For the hydroelectric plant: RTh = T x AG + RPS; including:

T: water resource tax rate and payment for forest environmental services incurred by the hydroelectric plant as per the government’s regulations (VND/kWh);

AG: the production of electricity measured at the delivery point as per the power plant’s record of endorsed meters' data in month t (kWh);

RPS: taxes and fees arising due to competent governmental authorities' amendments to laws and regulations (if any).

- For thermal power station: RTh is composed of surface water exploitation tax and environmental protection fee against solid waste as levied on thermal power stations, or relevant taxes and fees resulting from competent governmental authorities' changes of laws and regulations (if any). The parties settle the payment of RTh as per the concerned entity's actual figures according to the regulations by competent governmental authorities (VND);

VAT: Value added tax rate as stipulated by the government (%)

3. Foreign exchange difference (FED): the parties, on annual basis, report to Ministry of Industry and Trade and Electricity Regulatory Authority on the calculation of foreign exchange differences for the immediate preceding year and on the payment plans. Foreign exchange difference (VND) is determined in the following formula:

Including:

m: types of foreign currencies in the electricity pricing plan as agreed by the parties (types):

n: number of original principal repayment phases for foreign currency i in the calculation year (phases);

Di,j:  the actual amount of original principal in foreign currency i paid in phase j in the calculation year. The actual amount of original principal in foreign currency i paid in the calculation year does not exceed the original principal in foreign currency i in the equivalent year as per the parties' agreed electricity pricing plan, as shown in the following table:

No.

Foreign currency

Year 1

Year 2

Year …

Total

1

Di

 

 

 

 

li,j: exchange rate at repayment phase j for foreign currency i in the year (.../VND);

li,b: base exchange rate for foreign currency i as agreed by the parties in the electricity pricing plan (…/VND);

 

Appendix VI

MAIN PARAMETERS FOR ELECTRICITY PRICING

1. Thermal power station

No.

Entry

Unit

Value

1

2

3

4

A

Entries for the calculation of fixed price

 

 

I

Total investments

Million dongs

 

 

Total net investments

Million dongs

 

 

Interest cost during construction works

Million dongs

 

 

Exchange rate for each foreign currency

 

 

II

Feeder’s production of electricity

Million kWh

 

1

Output power at the generator’s terminals

kW

 

2

Average number of hours of operation at maximum output power in multiple years

Hour

 

3

Proportion of output power attenuation averaged over the entire economic life of a project

%

 

III

Proportion of electricity self-consumed and lost

%

 

1

Proportion of electricity self-consumed and lost in the plant’s transformers

%

 

2

Proportion of electricity lost on power transmission line (if any)

%

 

IV

The project’s economic life

Year

 

V

Group-based depreciation duration for fixed assets

Year

 

1

Group of constructional fixed assets

Year

 

2

Group of fixed equipment

Year

 

3

Group of other fixed assets

Year

 

VI

Proportion of equity capital and loan capital in total investments

 

 

1

Proportion of equity capital

%

 

2

Proportion of loan capital

%

 

VII

Proportions of foreign currency loan and domestic currency loan in total loans

 

 

1

Proportion of foreign currency loan

%

 

 

- Including: exchange rate for each foreign currency

 

 

2

Proportion of domestic currency loan

%

 

VIII

Average loan interest

 

 

1

Average interest on foreign currency loan

%

 

2

Average interest on domestic currency loan

%

 

IX

Taxes and fees

 

 

1

Average corporate income tax rate

%

 

2

Other fees (if any)

 

 

X

Fixed cost for operation and maintenance in the first year of commercial operation

Million dongs

 

1

Components of fixed cost for operation and maintenance by workforce

Million dongs

 

 

Minimum regional wage in the base year of calculation

VND/person/month

 

2

Components of fixed cost for operation and maintenance by other expenses

Million dongs

 

B

Entries for the calculation of variable price

 

 

1

Average net loss rate of main fuel (coal, gas)

Kg/kWh or BTU/kWh

 

2

Average net loss rate of secondary fuel (oil)

kg/kWh

 

3

Coefficient of output attenuation

 

 

4

Main fuel price (exclusive of transportation cost)

VND/ton or VND/BTU

 

C

Entries for the calculation of particular variable price

 

 

1

Main fuel transportation charge in the base year

VND/ton or VND/BTU

 

2. Hydroelectric plant

No.

Entry

Unit

Value

1

2

3

4

A

Entries for the calculation of fixed price

 

 

I

Total investments

Million dongs

 

 

Total net investments

Million dongs

 

 

Interest cost during construction works

Million dongs

 

 

Exchange rate for each foreign currency

 

 

II

Average production of electricity at generator's terminals

Million kWh

 

III

Proportion of electricity self-consumed and lost

%

 

1

Proportion of electricity self-consumed and lost in the plant’s booster transformers

%

 

2

Proportion of electricity lost on power transmission lines (if any)

%

 

IV

The project’s economic life

Year

 

V

Group-based depreciation duration for fixed assets

Year

 

1

Group of constructional fixed assets

Year

 

2

Group of fixed equipment

Year

 

3

Group of other fixed assets

Year

 

VI

Proportion of equity capital and loan capital in total investments

 

 

1

Proportion of equity capital

%

 

2

Proportion of loan capital

%

 

VII

Proportion of foreign currency loan and domestic currency loan in total loans

 

 

1

Proportion of foreign currency loan

%

 

 

- Including: exchange rate for each foreign currency

 

 

2

Proportion of domestic currency loan

%

 

VIII

Average loan interest rate

 

 

1

Interest rate on foreign currency loan

%

 

2

Interest rate on domestic currency loan

%

 

IX

Taxes and fees

 

 

1

Average corporate income tax rate

%

 

2

Other fees (if any)

 

 

X

Cost for operation and maintenance in the first year of commercial operation

Million dongs

 

1

Components of operation and maintenance cost by workforce

Million dongs

 

 

Minimum regional wage in the base year of calculation

VND/person/month

 

2

Other components of operation and maintenance cost

Million dongs

 

 

Appendix VII

STAGES OF PROJECT

(Enclosed to the Contract No. … dated …)

I. Stages of the project

1. Official commencement date of the construction of the power plant: […]

2. Initial date of interlock tests: [...]

3. Date of initial circuit closure: […]

4. Date of reliable output test: […]

5. Date of commercial operation of the generator i: […]

6. Date of the power plant’s commercial operation: [...]

II. Documents that Vendor must provide to Buyer

Vendor bears the duty to provide Buyer with valid copies of the following documents for the endorsement of the date of commercial operation:

1. The certificate of investment as issued by competent governmental authorities.

2. The connection agreement.

3. The power plant's license for power generation activities as issued by the Electricity Regulatory Authority.

4. The contract for supply of fuel (for thermal power stations).

5. The certificate of tests and initial inspection of measurement equipment from competent authorities.

6. The permit for discharge of sewage into water sources as issued by competent governmental authorities.

7. The license for port activities as issued by competent governmental authorities (for thermal power stations).

8. The certificate of conformity to environmental impact assessments as issued by competent governmental authorities.

9. Documents on calibration tests for generators’ apparatus and equipment connecting the power plant to the national electric power system.

10. The procedure for joint operation of the power plant upon the agreement with the operator of national electric power system and electricity market.

11. The procedure for reservoir regulation (for hydroelectric plants).

 

Appendix VIII

PROCEDURE OF RELIABLE OUTPUT TEST

(Enclosed to the Contract No. … dated …)

 

 

Appendix 4

REPORT OF PAYMENTS FOR ELECTRICITY

… [quarter] ... [year]

(Enclosed to the Circular No. 56/2014/TT-BCT dated 19 December 2014 by Minister of Industry and Trade

No.

Entry

Unit

Month …

Month …

Month …

A

Payments for electricity (exclusive of value added tax)

 

 

 

 

1

Total contract payments

Million dongs

 

 

 

2

Total market payments

Million dongs

 

 

 

3

Other payments

Million dongs

 

 

 

4

Total cost for generator start

Million dongs

 

 

 

5

Total taxes and fees

Million dongs

 

 

 

 

- Water resource tax

Million dongs

 

 

 

 

- Payment for forest environment services

Million dongs

 

 

 

 

- Solid waste fee

Million dongs

 

 

 

 

- Other taxes and fees

Million dongs

 

 

 

6

Monthly production Qc as per the contract

Million kWh

 

 

 

B

Actual data on monthly basis

 

 

 

 

1

Annual fixed price

VND/kWh

 

 

 

2

Cost for operation and maintenance by major repair cost and other expenses

VND/kWh

 

 

 

3

Cost for operation and maintenance by workforce cost

VND/kWh

 

 

 

4

Power plant’s variable price

VND/kWh

 

 

 

5

Main fuel transportation price

VND/kWh

 

 

 

6

Price of fuel coal/gas (exclusive of transportation charge)

VND/ton, USD/BTU

 

 

 

7

Charge for transportation of coal

VND/ton, USD/BTU

 

 

 

8

Price of fuel oil

VND/ton

 

 

 

9

Minimum regional wage

VND/person/month

 

 

 

10

Generator start times (in each boot condition)

times

 

 

 

11

Exchange rate for payment of fuel gas, fuel coal

VND/USD

 

 

 

12

Exchange rate for payments as per actual loan contracts with banks and credit institutions (if any)

VND/USD

 

 

 

 

 

 

 

 

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Loại văn bảnThông tư
Số hiệu56/2014/TT-BCT
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Ngày ban hành19/12/2014
Ngày hiệu lực03/02/2015
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        Circular No. 56/2014/TT-BCT method of determination of electricity generation costs
        Loại văn bảnThông tư
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        Cơ quan ban hànhBộ Công thương
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