Vietnam to stop licensing large-scale solar projects

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Vietnam’s Ministry of Industry and Trade has issued Circular 9608/BCT-DL, in which it urges regional governments throughout the country and state-owned utility Electricity of Vietnam (EVN) to suspend new approvals for large-scale PV projects under the FIT scheme.

According to the Vietnam Clean Energy Association (VCEA), the government has already approved 135 projects with a combined capacity of 8.93 GW under the scheme. Around 4.5 GW of those projects came online at the end of last June, when the first phase of the country’s feed-in tariff (FIT) scheme expired.

The ministry said that only projects with signed FIT contracts that are scheduled for completion scheduled by the end of this year will be able to secure subsidies, while all of the remaining projects will have to compete again in future auctions. “The Ministry of Industry and Trade is now working with ministries and agencies to complete the draft of a new auction mechanism,” the government said.

The Vietnamese authorities announced plans to switch from subsidizing PV deployment through FITs in favor of solar auctions in early December, marking a clear shift away from earlier promises to reboot the FIT scheme.

Vietnam will need to add about 3.5-4 GW of new generating capacity per year to keep up with rising electricity demand, which is growing at an annual rate of around 10%.