Developing competitive energy markets requires new approaches

The Project on Developing a Competitive Energy Market towards 2030, with a vision to 2045, was approved by the Government back in 2020, with the ultimate goal of building, forming, and developing a healthy competitive energy market of coal, gas, and electricity, in stages and under State regulations.

Energy determines the ability for sustainable development

At a forum on developing a competitive energy market to 2030 with a vision for 2045 held on December 6 in Hanoi, participants agreed that energy is a key decisive factor in creating the ability to develop sustainably for countries around the world. Therefore, ensuring energy security remains a priority in their development strategies.

As part of efforts to implement the overall goal of the nation’s National Energy Development Strategy to 2030, with a vision to 2045, according to Resolution No. 55 dated February 11, 2020, of the Politburo, Le Anh Chien of Vietnam National Oil and Gas Group (PetroVietnam)’s Party Committee stated that the group has been focusing on exploiting and effectively using domestic energy resources in combination with reasonable energy imports and exports. Indeed, it is thoroughly practicing energy saving and efficient use.

“Petrovietnam always strictly complies with Vietnam’s environmental protection laws and international conventions that Vietnam has participated in, while constantly improving technology and updating new technologies to help reduce emissions into the environment and minimize unwanted risks. Petrovietnam and its member units always ensure the implementation of environmental protection measures in accordance with current laws on safety, health and the environment,” Chien affirmed.

Analyzing the renewable energy development model of Taiwan (China), Assoc. Prof. Dr. Pham Thi Thanh Binh of the Faculty of Economics, Hanoi Open University, presented some highly applicable experiences in developing the nation’s competitive energy market. Accordingly, since 2009, Taiwan (China) has issued the Renewable Energy Development Act which will pave the way for Taiwanese renewable energy development.

The Act serves to bring together many businesses with the ultimate goal of developing renewable energy to wean Taiwan (China) off its dependence on limited energy sources, thereby contributing to reducing carbon dioxide emissions whilst preventing disasters caused by global warming.

“According to the experience of developed countries in the field of renewable energy, to develop renewable energy sustainably, it is necessary to focus on policies, transmission infrastructure and power system operation. Therefore, it is essential to switch to a bidding mechanism to encourage foreign investors. The investor selected for development will be the investor offering the lowest electricity price from the renewable energy project,” Assoc. Prof. Dr. Binh shared.

Changing approach to competitive energy market

According to Assoc. Prof. Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, in order to develop a competitive energy market, a new approach to market thinking, modernisation, and renewable energy vision is required, thereby creating a new era opportunities and national position.

As part of this process, it can be considered necessary to adjust the strategy for developing renewable energy on both the supply and demand based on the fundamentals of price and market regulation, thereby proactively promoting the process of electricity marketisation in parallel with electricity prices.

“In order for electricity prices to be truly market-based and fair in society, it is essential to separate the roles of the state and the market. It is necessary to return the true role of enterprises to the Vietnam Electricity Group, fast-track the formation of a two-component electricity price mechanism (capacity price and electricity price), as well as proactively have a plan to adjust electricity prices seasonally, except in unusual cases,” Assoc. Prof. Dr. Thien stated.

To promote the role of the press in the orientation of the Vietnamese National Energy Development Strategy to 2030, with a vision to 2045, Dr. Nguyen Minh Phong said that media agencies need to achieve closer, more timely, and effective linkages between ministries, branches, and agencies. This will serve to proactively build a data system on the development of a competitive energy market. In addition, it must be viewed as imperative to step up information and communication on digital platforms.

“The Government and ministries, sectors and localities need to assign tasks to media agencies to ramp up communication on the competitive energy market in accordance with the requirements and regulations of the law.

Dr. Phong also underscored the need to strictly manage information on the press and social networks, proactively combat, remove, prevent fake news, toxic news, and strictly handle organizations and individuals who violate legal regulations on network security and information security.

Many experts also expressed their confidence that the forum will contribute to spurring forward the development of a competitive energy market, in line with the socialist-oriented market economy and the trend of synchronous, transparent, competitive, and diverse international integration. This will therefore contribute to the successful implementation of the goal of rapid and sustainable socio-economic development in the new development era, which has the potential to be the era of the nation’s rise.