Circular 02/2019/TT-BCT on Wind power project development

1 Chapter I. GENERAL PROVISIONS
5 ATTACHED APPENDIX

CIRCULAR 02/2019/TT-BCT January 15, 2019


ON WIND POWER PROJECT DEVELOPMENT AND POWER PURCHASE AGREEMENT FOR PROJECTS THEREOF

Pursuant to the Electricity Law No. 28/2004/QH11 dated December 03, 2004; Law on amending some articles of the Electricity Law dated November 20, 2012;

Pursuant to the Government's Decree No. 98/2017/ND-CP dated August 18, 2017 on defining functions, tasks, powers and organizational structures of the Ministry of Industry and Trade;

Pursuant to the Decision No. 37/2011/QD-TTg dated June 29, 2011 of the Prime Minister on the mechanism for supporting the development of wind power projects in Vietnam and the Decision No. 39/2018/QD-TTg dated September 10, 2018 of the Prime Minister on amending some articles of the Decision No. 37/2011/QD-TTg;

At the request of the Director General of the Electricity and Renewable Energy Authority,

Minister of Industry and Trade promulgates the Circular on wind power project development and power purchase agreement for projects thereof.

Chapter I. GENERAL PROVISIONS

Article 1. Scope and regulated entities

1.  This Circular specifies the wind power project development and power purchase agreement

for wind power projects in Vietnam (hereinafter referred to as “Power purchase agreement”).

2.  This Circular is applicable to the following entities:

a.    Investor of the wind power project;

b.    Unit managing and operating wind power works;

c.    Power buyer;

d.    Other related organizations and individuals.

Article 2. Definitions

In this Circular, the following terms are construed as follows:

1.  Power buyer means Vietnam Electricity Corporation or its authorized - affiliated units or organizations receiving rights and obligations from Vietnam Electricity Corporation according to the law regulations.

2.  Power seller means an enterprise that produces, operates and trades electricity power from wind power plants or an organization receiving rights and obligations to produce, operate and trade electricity power of the enterprise as specified in the law.

3.  Comprehensive complex of wind turbine includes the electric generator, single throw switch, blades, tower, synchro transformer, connection lines, and other equipment and construction compositions that using wind power to produce electricity. The base of the tower, electrical substation, cable channel and related construction works are not classified as comprehensive complex of wind turbine.

4.  Onshore wind turbine means a turbine of which the center of the base is built on land and in a coastal area where the boundary from the sea water's edge to the inside of the area is at the lowest for multiple years. The sea water's edge at the lowest for multiple years is determined and promulgated in the Government's Decree No. 40/2016/ND-CP dated May 15, 2016 on providing guidelines for the implementation of some articles of the Law on Sea and Island Natural Resources and Environment or regulations on amending the Law thereof.

5.  Offshore wind turbine means a turbine of which the center of the base is built outside the sea water's edge which is at the lowest during the offshore years. The lowest sea water's edge in multiple years shall be determined and announced in accordance with clause 4 of this Article.

6.  Land area for survey, study and investment in wind power projects means a restricted area within the geographical boundary specified in the approval document of the People's Committee of province or central-affiliated city. Such document permits the investor to carry out survey, research and evaluation of the wind power potential, in order to plan the wind power investment project within a permitted period of time. This area shall only be used for survey and research activities, such as building wind measurement tower and conducting geology and topography survey.

7.  Land area for use with term of wind power projects means the total area of the base of wind turbine, including both the base protection area and the area for installing synchronous equipment at the base of the wind power pole; underground cables that connect with the wind power, base of the utility poles, electrical substations; area for building internal road system and management agency. Land area for use with term shall be handed to the project investor for the whole project’s life time by the competent agency.

 8.  Land area of temporary use of wind power projects means the area which the investor may temporarily use for carrying out the wind power project, including: roads temporarily used for

serving construction, material and equipment gathering sites, construction sites, and makeshift camps for workers and other auxiliary locations. After constructing the works and bring them into operation, the land area which is temporarily used and is not included in the land area for use with term will be reclaimed by the competent agency for other use purposes.

9.  Safety corridor of wind power project means the safety corridor of the wind tower, power transmission lines, substations and auxiliary items.

10.  Safety corridor of wind power tower has the shape of a semicircle whose center is the center of the base of wind tower, the radius equals (=) the height of the tower plus (+) the radius of the rotor.

11.  IEC standards mean electrical standards issued by international electrotechnical commission.

Chapter II. WIND POWER PROJECT DEVELOPMENT

Article 3. Planning and list of wind power project development

1.  Wind power project development is carried out in accordance with the power development planning scheme, in which the wind power development potential and wind power development area shall be determined for each province. The wind power projects which have not been planned shall be apprised and submitted to the competent authorities for approval and being supplemented to the power development plan.

2.  Projects which have been specified in the power development plan at all levels and in the approved provincial wind power development plan shall be carried out in accordance with the transitional regulations specified in clause 1c and clause 3, Article 59 of the Law on Planning.

3.  Operation process, scale and capacity of all stages of the project shall comply with the power development planning scheme and/or the wind power development planning scheme approved by the competent authority. If the project investor adjusting the process does not follow the plan for more than six (06) months or stage the implementation of another project different from the planning scheme, he/she shall send a report to the competent authority for consideration and approval.

4.  When developing the wind power project of the approved plan on wind power project development from 2011 to 2020, the provincial People’s Committee shall update the plan on connecting wind power project to the power system, in order to distribute the project capacity and the absorption potential of the power system within the project’s area. If the project connection plan is changed, the provincial People's Committee shall report this case to the Ministry of Industry and Trade for appraisal and approval or for such Ministry, within their power, to submit the adjusted connection plan to the superior for approval.

Article 4. Addition of the new wind power projects to the power development planning scheme

1.  The wind project which can be exploited but is not mentioned in the power development planning scheme may be studied and developed and shall be appraised and submitted for supplementing to the scheme thereof.

2.  The application for supplementing the wind power project to the power development planning scheme shall comprise of:

a.    Planning scheme, including the following main contents:

-  The necessity of project investment and conditions for making the construction investment.

-  Intended objectives, scale, locations (including both the location and the angular coordinate) and project implementation forms.

-  Demands for using the land and natural resources: specify the surveyed area, temporarily used area, area of limited use and area affected by safety corridor; List the forms of land and territorial waters and analyze the efficient use of land and natural resources in territorial waters; evaluate the compatibility with the land use planning, marine spatial planning and the overlap with other plans.

-  Report on the wind potential within the project’s area.

-  Preliminary remarks about the technological methods, including analysis and selection of technologies based on the characteristics of the wind within the project’s area; and the turbine arrangement plan.

-  Preliminary design plan which specifies the location of construction site; type and level of the main work; preliminary drawing of the project’s general layout; drawing and preliminary interpretation of the foundation method selected for the main work.

-  Report on the selection of the plan on connecting wind power plant to the power system. In the report, clearly specify information about the current state of power source and grid, power source and grid development plan, comparison and selection of connection plans, calculation of the impacts on the source and grid thereof during the execution of the project and evaluation of the absorbance potential of the power grid when the project is brought into operation.

-  Preliminary implementation method: transport of oversized/overweight equipment; implementation process; technical construction method.

-  Estimate report on the total investment.

-  Preliminary evaluation of financial and economic efficiency, social-economic efficiency and impacts of the project.

b.    A document of the provincial People's Committee specifying the planning location and the land use area which are conformable with the land use planning and land use plan, and specifying how they overlap with other plans; Opinions of the competent authorities on the use of natural resources and territorial waters of the proposed project (if the project is executed on the sea).

c.    Opinions of the regional power corporation (if connected to the power distribution system) or the power transmission corporation (if connected to the power transmission system), and opinions of Vietnam Electricity Corporation on the absorption potential of the power grid within the area and the application for supplementing additional information to the planning scheme.

3.  Procedures for approving the supplementation of wind power project to the power development planning scheme

a.    Provincial People’s Committee shall write a request for supplementation of the wind power project to the power development planning scheme, attach with it the application specified in clause 2, Article 4 and send both of them to the Ministry of Industry and Trade.

b.  Within 45 working days after receiving the complete application, the Ministry of Industry and Trade shall request opinions from related Ministries and Sectors on the contents of the application, in order to use such opinions as the basis for reviewing the application. Based on the reviewing results, the Ministry of Industry and Trade shall send an official dispatch to the provincial People’s Committee to request the complete application.

c.  Within 15 working days after receiving the additional or complete application, the Electricity and Renewable Energy Authority shall make an appraisal documentation and submit it to the Minister of Industry and Trade. The project shall be considered and approved to be supplemented to the planning scheme under the current regulations on planning.

Article 5. Requirements for wind measurement

The wind power project shall have a wind measurement report which has been made at the project's location before the feasibility study report is made and approved. The wind measurement shall be carried out within a minimum period of 12 consecutive months at the representative locations, and the quantity of the wind measuring poles must be suitable to the topographical change of the project’s area. The wind measurement method, equipment and results shall comply with the IEC standards or equivalent international standards.

Article 6. Feasibility study report on wind power project

The feasibility study report on the wind power project shall be made in accordance with the law regulations on construction investment management and shall have the following contents:

1.  The wind measurement results according to Article 5 hereof.

2.  Angular coordination and location; land area for use with term and land area of temporary use; area covers the territorial waters (if the location is on the sea) of the wind power project.

3.  Connection plan, evaluation of the impacts of the wind power project connection plan to the

power system of the area and the ability to release the project’s capacity.

4.  Technical plan and method, and expenditures for dismantling and handling the equipment of the wind power plant after the project ends.

5. Power grid connection agreement; Agreement on the project’s location of the competent authority; construction works built within multiple routes; land use area (for onshore projects); land area of used natural resources and territorial waters (for projects carried out on land); general layout planning of the project; confirmation document of the competent agency on locations of wind power turbines on the sea (for projects with turbines built on the sea); Vertical clearance approval document of the competent agency.

Article 7. Requirements for starting and executing the wind power project construction

The wind power project shall only be started and executed when it satisfies the requirements of the law regulations on construction investment management, requirements for environmental protection and the following requirements:

1.  The application for construction design shall be appraised and approved in accordance with the current regulations;

2.  Power Purchase Agreement signed with the Power Buyer;

3.  Have a financial contract and a funding commitment, with the aim to ensure that the construction progress is accelerated in accordance with the approved work investment project.

Article 8. Wind power project inspection

1.  The work or work item shall be brought into use after being inspected and after the inspection is checked in accordance with the current regulations.

2.  The Electricity and Renewable Energy Authority, within their competence as same as the Ministry of Industry and Trade, shall take charge to check the inspection of wind power project.

3.  The Department of Industry and Trade and the authorized unit, within their competence, shall take charge to check the inspection of wind power project according to the current regulations.

Article 9. Reporting regime and operation management

1.  Within 10 working days after receiving the Investment Policy Decision and the Investment

Registration Certificate, the provincial People’s Committee shall send certified true copies of the

Decision and Certificate thereof to the Electricity and Renewable Energy Authority for supervision and management.

2.  Within 10 working days after receiving the Power Purchase Agreement signed with the investor, the Power Buyer shall send 01 certified true copy of the above-mentioned Agreement to the Electricity and Renewable Energy Authority for supervision and management.

3. Annually, before January 15 and July 15, the provincial People’s Committee having the wind power projects shall send a six-month report on the investment registration activities and the project’s implementation process in the province to the Ministry of Industry and Trade for management and supervision. The report form is specified in Appendix I hereto.

4. After the wind power project is completed and brought into commercial operation, the investor shall comply with the current regulations on operation management of power works and on environmental protection.

Article 10. Equipment of the wind power project

1.  The wind power project equipment shall satisfy Vietnam technical requirements and standards or IEC standards or equivalent standards.

2.  Equipment of the wind power work shall not be second-hand, not leave the factory more than 05 years, and shall have appropriate Origin and Production Certificates. If the second-hand equipment of wind power project is used or it has left the factory for more than 05 years, timely report to the Ministry of Industry and Trade for this Ministry to cooperate with related agencies in making decisions.

Article 11. Work safety

1.  The scope of the wind power project includes the areas where wind towers, power transmission lines, electrical substation and other auxiliary items. Safety corridor of wind power works, safety corridor of the lines and electrical substation shall comply with the technical standards and regulations on electrical equipment, regulations on safety for high-voltage power grid and other law regulations on power work safety.

2.  The wind power work must be 300 m away from the residential area.

3.  Wind power turbine and wind power tower must be bright in color and must be non-reflective.

Article 12. Land use area

1.  The land used for the wind power development project shall include: land area for survey, study and investment in wind power project; land area for use with term of the wind power project; and land area of temporary use of the wind power project.


2.  Land area used for the wind power project must be conformable with the work capacity. The land area for use with term of the wind power project shall not exceed 0.35 ha/MW. The land area of temporary use of the wind power project shall not exceed 0.3 ha/MW.

Article 13. Land use management within the area of wind power work

1.  The land area of temporary use of the wind power project must be conformable with the land use planning and land use plan and shall not overlap other planning schemes which have been approved by the competent agencies.

2.  The wind power project shall be prioritized to develop in the arid and rocky land, with little value of agriculture, aquaculture, sparsely populated or without citizens.

3.  After the wind power work is brought into operation, the investor must restore the original state of the temporarily-owned area and hand it over to the local government for management.

4. The provincial People’s Committee may allow the land within the area of wind power project to be used for the appropriate purposes (cultivation, cottage farming) and shall ensure safety for the operation of the wind power project.

Chapter III. POWER PURCHASE AGREEMENT FOR GRID-CONNECTED WIND POWER PROJECTS

Article 14. Application of the wind power price to the wind power project

If the grid-connected wind power project includes the onshore and offshore wind power turbines, the Power Seller shall agree with the Power Buyer about the electric meter installation method and the method for measuring and calculating the separated power output of each onshore or offshore wind turbine, in order to use such output as the basis for applying the appropriate power price.

Article 15. Application of Power Purchase Agreement for the wind power projects

1.  The Power Purchase Agreement shall be used for selling and buying power between the Power Seller and the Power Buyer.

2.  Only apply the Power Purchase Agreement for the electrical energy produced from the wind energy source.

3.  The contents of the Power Purchase Agreements for wind power projects are specified in Appendix 2 hereto.


4.  The Power Seller and Power Buyer may only supplement additional contents to the Power Purchase Agreement to clearly state the responsibilities and powers of the parties but shall not amend the basic contents of such Agreement.

Article 16. Procedures for signing the Power Purchase Agreements for wind power projects

1.  Procedures for signing the Wind Power Purchase Agreement

a.    The investor of the wind power plant shall make an application for signing of the Power Purchase Agreement with the Power Buyer. The Buyer will subsequently carry out the appraisal and approval procedures for signing such Agreement.

b.    Within 15 working days after receiving the application for signing of the valid Power Purchase Agreement from the investor, the Power Buyer shall review the Agreement and sign it with the Power Seller.

2.  Application documents for signing of the Power Purchase Agreement

a.    Power Seller's official dispatch for requesting the signing of Power Purchase Agreement;

b.    Legal documents of the project, including: Approval Decision of the competent authority on planning on power source and grid; Investment Policy Decision or Investment Registration Certificate; Investment Project Approval Decision;

c.    A draft of Power Purchase Agreement using the form specified in Appendix II hereto;

d.    Agreement on connecting power plant to the national power system. Such agreement is enclosed with the connection method of such power plant; SCADA/EMS Agreement and DIM system (Instruction Dispatch Management); agreement on automatic and protective relay system;

dd. Documents on calculation of loss of capacity and electrical energy of transformers and lines transmitted from the power plant to the points connected with the national power system, and documents on calculation of the electronic used in the power plant.

Chapter IV. IMPLEMENTATION

Article 17. Implementation

1.  Electricity and Renewable Energy Authority shall:

a.    Disseminate this Circular, provide guidance for implementing it and inspect such implementation. If any problem arises during the implementation, Electricity and Renewable Energy Authority shall cooperate with related units and localities in suggesting the Minister of Industry and Trade to amend this Circular.


b.    Organize the evaluation of theoretical, technical and economic wind power potential, and distribute the potential to each region, in order to import data on such distribution to the database and use it to develop the contents on wind power project development plan specified in the  power development plan.

c.    Take charge to study and suggest the wind power development bidding regime applied from November 01, 2021 and send a report to the Minister of Industry and Trade for him to submit it to the Prime Minister for consideration and decision-making.

2.  The Department of Industry shall take charge to study and suggest the regulations on encouraging the development of domestic wind power work equipment, in order to improve the localization ratio of the wind power project. Send a report to the Minister of Industry and Trade for him to submit it to the Prime Minister for consideration and decision-making.

3.  Provincial People’s Committee:

a.    Monitor, supervise, inspect and report the development activities of the wind power projects in the province based on the approved power development plan which is conformable with the regulations hereof.

b.    Cooperate with the Ministry of Industry and Trade to locate wind power development area in the province and make sure such area is conformable with the land use planning, national marine spatial planning and technical and specialized plannings.

Article 18. Transitional regulations

The wind power projects which have been brought into operation before November 01, 2018 may re-sign the Power Purchase Agreement with the Power Buyer, in order for them to apply the power price specified in clause 7, Article 1 of the Decision No. 39/2018/QD-TTg from November 01, 2018 to the expiry date specified in the signed Power Purchase Agreement.

Article 19. Entry into force

This Circular may come into force from February 28, 2019. The Circular No. 32/2012/TT-BCT dated November 12, 2012 of the Ministry of Industry and Trade on wind power project development and Power Purchase Agreement of projects thereof and the Circular No.

06/2013/TT-BCT dated March 08, 2013 of the Ministry of Industry and Trade on contents and procedures for making, appraising and approving the wind power development plan shall expire after this Circular comes into force.


ATTACHED APPENDIX

HERE