The Ministry of Industry and Trade has just officially approved the price frame for electricity generation from household solid waste with a maximum of VND 2.575,18/kWh, excluding value added tax.
This price will be applied in power purchase contracts between Vietnam Electricity Group (EVN) and investors of waste-to-energy plants, replacing the FIT price mechanism of 10,05 US cents/kWh (preferential price) according to Decision 31/2014/QD-TTg.
According to the recently approved adjusted Power Plan VIII, waste-to-energy is identified as one of the renewable energy sources that need to be prioritized for development. This is because this is not a normal commercial power generation project like other types of power sources, but also aims to treat the environment for localities.
The target by 2030 is for the total electricity capacity produced from garbage and solid waste to reach about 1.441 - 2.137 MW; the target by 2050 is about 1.784 - 2.137 MW. However, the implementation of waste-to-energy projects has recently encountered many difficulties, mainly due to legal barriers and complicated administrative procedures.
The number of waste-to-energy plants put into operation in recent times is still limited due to many mechanisms.
According to a report by the Vietnam Federation of Commerce and Industry (VCCI), waste-to-energy investors face many challenges in the process of implementing waste-to-energy projects.
For example, current legal regulations still lack a separate mechanism for selecting investors and signing contracts in the form of ordering domestic solid waste treatment services - which is a characteristic of waste-to-energy projects.
The issue of input commitments, such as a stable amount of waste to operate the plant, is also a major bottleneck. Many investors are concerned that despite investing in modern treatment infrastructure, they are still not guaranteed a sufficient amount of waste and a stable quality, due to unclear local waste management plans, or the lack of binding mechanisms in contracts between the state and businesses.
To overcome the above difficulties, VCCI proposed to issue regulations allowing localities to sign long-term waste treatment service contracts with waste-to-energy plants; consider establishing a central working group to support localities in implementing waste-to-energy projects; and decentralize administrative procedures in the fields of construction and environment to localities.
In particular, State agencies need to redesign the list of waste-to-energy projects in the Plan to implement the VIII Power Plan in an open direction, giving priority to projects that can be implemented first.