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Preparations for competitive power market ‘too sluggish'

Update: November, 14/2011 - 10:03
HCM CITY — Deputy Prime Minister Hoang Trung Hai has urged relevant ministries and sectors to speed up preparation for the operation of a competitive power market.

Hai asked for the completion of the plan that calls for a competitive power-generation market by November 15, a month and a half ahead of the its proposed start next year.

The pilot market plan was launched on July 1 by the Ministry of Industry and Trade (MoIT), and after four months of operation, most power plants are participating and offering prices either directly or indirectly through their representatives, according to Hai.

Power-generation agencies are increasingly using information technology as a base for collecting, processing and delivering power prices on the market.

Hai, however, cited some shortcomings, including the instability of the Supervisory Control and Data Acquisition system, errors in power demand expectation, and improper regulations in the market's introduction.

A competitive power market aims to secure equal competition in power production and equal pricing of electricity, improve production efficiency, and attract more resources of funding for power generation. As the power generation market becomes more developed, customers will have more opportunities to select power providers.

The market will operate under the model of a cost-based pool in which power producers have the right to offer power prices based on the market.

The MoIT has been asked to complete a plan to set up a national power regulation council.

The ministry has also been asked to revise legal documents on the power market, particularly on the adjustment of ceiling prices offered by power plants based on fuel prices.

Binding conditions regarding power consumption would be added to contracts on Build-Operate-Transfer projects' power trading. The MoIT will supervise Electricity of Viet Nam (EVN) on transferring power-trading contracts and gradually adjusting power prices offered by power plants to be in accordance with the market. This would help investors to cover additional expenses caused by increased interest rates and fuel prices.

The EVN must complete a plan on the competitive power market and submit it to the MoIT before November 15, according to Hai.

The deputy PM also asked the EVN to put in place a basic information-technology infrastructure, connecting it with power plants which are not under EVN's management. He ordered it to be done before next Tuesday.

The development of a competitive power market is a long-term strategy contained within the country's 2004 Law of Electricity.

The market upgrade contains three plans: competitive power generation from 2005 to 2014, competitive power trading in the following eight years, and retail sales of power after 2020. — VNS

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