Wednesday, August 23 2017

VietNamNews

Electricity firms to raise competitiveness

Update: March, 26/2015 - 08:55
More than two years after Viet Nam kick started a competitive power generation market, the national utility Electricity of Viet Nam (EVN) remains the single buyer in this market, resulting in "inflexible prices" of power. — VNA/VNS Photo Ngoc Ha
HA NOI  (VNS) — The domestic market is expected to have five electricity corporations, which will directly buy and sell power to customers in the near future.

This was announced by Ministry of Industry and Trade (MoIT) officials at a conference in Ha Noi yesterday.

Experts said establishing multiple firms soon was necessary for ensuring the progress of the national roadmap, which had been adopted by Prime Minister Nguyen Tan Dung, and for developing a competitive wholesale electricity market by 2019.

More than two years after Viet Nam kickstarted a competitive power generation market, the national utility Electricity of Viet Nam (EVN) remains the single buyer in this market, resulting in "inflexible prices" of power.

Viet Nam Electricity Association Vice Chairman Tran Dinh Long said, currently only about half of the power plants, with a capacity of 30 megawatts or more, were taking part in the electricity generation market.

But once the competitive wholesale level is achieved, any power generation firms can directly join the market if they "guarantee enough good infrastructure conditions." These will include multi-targeted hydropower plants, build-operate-transfer (BOT) plants, and even small plants, which currently only opt for indirect routes.

Nguyen Anh Tuan, the director of MoIT's Electricity Regulatory Authority, said he was concerned about whether the country will have adequate technical infrastructure and human resources to operate the market at a higher level.

"The biggest challenge currently lies in the ability of executives [in the sector]," he said, adding that improving their capacity was important for ensuring market success.

Deputy Prime Minister Hoang Trung Hai has asked MoIT to complete a detailed plan for developing the competitive wholesale market and submitting it to the Government by June. This is needed for the country to begin piloting this scheme from early next year.

Tuan confirmed that the ministry had formulated the plan with the help of both domestic and foreign advisors, who were committed to finalising it in May.

Officials from MoIT and the Ministry of Finance agreed in an online conversation earlier this month that they needed to make more efforts to ensure that commodity prices were determined in keeping with market mechanisms and with greater transparency.

They expressed the point of view in the context that EVN was roundly criticised for opacity in its price calculations, and that the recent hike of 7.5 per cent in electricity prices had fuelled public concern about a domino effect on the prices of many other essential goods.

Viet Nam plans to have a competitive retail electricity market by 2023. Viet Nam News reported last year that the electricity industry's development required nearly US$50 billion for the 2011 to 2020 period, and $75 billion for 2021 to 2030 period.

Yesterday's meeting was organised by MoIT and EVN. — VNS

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