Vietnam to boost competitive power market

The move is part of the ongoing preparations, currently in full swing for a shift towards competitive electricity wholesale market in 2019, a conference heard yesterday.

The conference was organised by Ministry of Industry and Trade to review operations of the competitive power generation market and raise a plan for the implementation of the competitive electricity wholesale market.

Following the Prime Minister's Decision 63/2013/QD-TTg about the development roadmap of Vietnam's power market, the competitive electricity wholesale market would be put under pilot implementation from the beginning of next year to 2018 and was expected to begin operations officially from 2019.

The electricity retail market was planned to be developed in 2022.

Under the roadmap, the competitive power generation market – the first one to be developed – had been under operation from July 2012. After three years, the competitive power generation market drew the participation of 59 power plants with a total capacity of 14,796MW, accounting for 41.63% of the industry's total design capacity.

According to Nguyen Anh Tuan, director of the Electricity Regulatory Authority, the operation of competitive power generation market enhanced the transparency in raising power sources, especially from plants outside the Electricity of Vietnam (EVN).

However, at the conference yesterday, electricity generation plants still voiced their concerns about their turnovers and profits when joining the competitive power generation market.

Tran Thi Oanh, general director of Geruco Song Con Hydroelectric Plant, said they still had problems in price calculations which sometimes caused losses to producers, pointing out that power production costs depended on many factors including macro-economic factors, interest rates and exchanges rates.

If the prices were calculated more precisely, the competitive power generation market would attract more plants, Oanh said.

All participating plants sold their electricity to a unit under the EVN, the Electricity Power Trading Company.

Statistics of the Electricity Regulatory Authority showed that the EVN, which currently managed 70% of power generation sources, bought electricity from competitive power generation market's participant plants at an average price of VND1,087.3 (5 US cents) per kWh.

Still, the EVN's average selling price to end-users was VND1,622.05 per kWh from March 16.

To date, there are nearly 50 power plants which have not participated in the competitive market.

Experts said it was important to improve policy framework to hasten the development of the competitive power generation market while protecting rights of consumers and attracting investors to the power industry.

Tuan said the department would issue more detailed instructions together with measures to tackle difficulties faced by power plants to encourage more participation.

Careful preparations

Regarding the pilot implementation of the competitive electricity wholesale market, Deputy Minister Hoang Quoc Vuong said that since this was completely "new" to Vietnam, careful preparations were needed to ensure its success.

Vuong stressed that priority must be placed on ensuring security for the power system.

Vuong said the power industry must pay attention to improving its IT infrastructure to ensure smooth management as well as to enhance quality of human resources to meet the market demand.

Another solution was hastening the restructuring of the power industry and consolidating the organisation and capacity of market participants for a rapid adaptation of the competitive electricity wholesale market, Vuong said, and added that a close watch must be kept on market fluctuations to tackle timely difficulties.

Vuong ordered the Electricity Regulatory Authority to co-ordinate with consultant units to issue early a legal framework for the competitive electricity wholesale market.

The ministry issued Decision 8266/QD-BTC in the middle of this month approving a detailed design for the competitive electricity wholesale market. Accordingly, the current monopoly of EVN would be removed.