• Gelex owns 1 solar power project enjoying preferential price of VND 2,086 VND/kWh and 5 wind power projects enjoying preferential price of VND 1,927 /kWh.
  • Since 2021, Gelex Ninh Thuan solar power project have had profit and wind power projects have begun to generate revenue.
  • Gelex will have aimed to own 800 MW of renewable energy by 2025, it now reached 260 MW.

6 renewable energy projects timely enjoy preferential prices

GELEX Group Joint Stock Company (HoSE: GEX) is a multi-industry investment group with 2 main business blocks including industrial production and infrastructure. In specific, the industrial segment mainly produces electrical equipment with popular brands such as Cadivi, Thibidi, Hem, Emic, etc; the infrastructure segment includes energy, industrial real estate, building materials, production and supply of clean water.

In the energy segment, catching up with the global trend, the group also focuses on exploiting renewable energy sources such as hydropower, solar power and wind power. Up to now, the group has had 7 power plants with a total capacity of 239 MW, with a total investment of more than VND 9,000 billion. Moreover, the group has rooftop solar power projects in industrial parks, of which the total capacity operation reached 260 MW, and the total output was 700 million kWh/year.

Specially, Gelex has 6 wind and solar power projects that have been went into operation before stopping enjoying preferential price.

In particular, Ninh Thuan solar power project, with a capacity of 50 MW and the total investment of VND 1,300 billion, started to run commercial operation in May 2019 and enjoyed preferential prices for solar power according to Decision 11/ 2017 expiring on June 30, 2019 (FIT 1) with electricity price of VND 2,086 /kWh (excluding VAT, equivalent to 9.35 Uscent/kWh).

5 wind power projects belonging to Huong Phung and Gelex Quang Tri clusters, with a total capacity of 140 MW started to have commercial operation in October 2021, promptly enjoyed the preferential mechanism at the price of VND 1,927 /kWh, which is equivalent to 8.5 Uscent/kWh (excluding VAT).

Leaders of Gelex believes that the renewable energy is a segment that brings stable revenue and profit. However, this operation depends heavily on natural factors such as rainfall, wind power or thermal radiation which cannot be measured and forecasted accurately. Besides, the segment of renewable energy is being prioritized for development by state authorities with many supportive policies. Therefore, projects that are not deployed in time or do not ensure the progress to enjoy preferential policies greatly affects the economic efficiency as well as the time of capital recovery.

By 2025, the group will have planned to expand its total renewable energy capacity to 800 MW. In the coming time, GELEX Group through its member units, it will focus on preparing to invest in Vinh Hai offshore wind power plant cluster with a total capacity of 800 MW; research and develop selectively projects such as Gia Lai wind power (100 MW), Dak Lak wind power (200 MW), Tay Ninh solar power (100 MW), Binh Phuoc 1, 2 solar power (480 MW), etc. At the same time, the group continues to seek investment opportunities in other clean energy projects such as hydroelectricity, biomass power, gas power, etc., which is effective and in line with the strategic direction of production and business.

Business activities of renewable energy projects are receiving positive signs

According to Nguoi Dong Hanh, Thanh Phu My Company – the investor of Song Bung 4A Hydropower Project recorded positive business results in the past 2 years thanks to favorable hydrological factors. Its revenue recorded over VND 285 billion, increased sharply compared to the previous 2 years; profit after tax increased from VND 43 billion in 2020 to VND 68 billion in 2021.

Through its operation, the company also reduced its debt significantly, from VND 955 billion in 2017 to VND 744 billion. The debt-to-equity ratio decreased from 1.7 to 1.2.

Gelex Ninh Thuan, the investor of the Ninh Thuan solar power farm project and a number of rooftop solar power projects, started to record revenue and profit from 2019, after the Ninh Thuan solar power project got COD. The revenue continuously improved from VND 79 billion to VND 183 billion in the period of 2019-2021, with a profit of VND 17.2 billion in last year while having a slight loss of VND 2 billion per year in the period 2019-2020.

In 2021, Ninh Thuan solar power farm recorded 74.5 million kWh of electricity production, about 15.6% higher than the 2021 plan. A number of 110 kV lines in Ninh Thuan and surrounding areas went into operation, which scaled up the capacity for the project and caused the growth in output.  In 2021, the deflation of project was estimated 15% on average (compared to 20% deflation in 2020). In the early half of this year, the project produced 41 million kWh, exceeding 5% of the 6-month plan and equal to 55% of the year plan.

Gelex Quang Tri Energy Joint Stock Company, the investor of the Gelex wind power clusters 1, 2 and 3 recorded VND 58 billion in revenue in the last 2 months of 2021 and a loss of VND 10.4 billion.

Similarly, Huong Phung Wind Power Joint Stock Company, the investor of Huong Phung projects 2 and 3 in Quang Tri, also recorded a revenue of VND 44 billion in the last 2 months of last year, a slight loss of VND 730 million.