Proposing a flexible electricity price mechanism by region and user

On October 1, the Ministry of Industry and Trade held a conference to collect opinions from experts, managers, businesses and relevant units in the energy sector on implementing a competitive electricity market.

The Ministry of Industry and Trade held a meeting on the competitive electricity market - Photo: C.DUNG

According to Minister Nguyen Hong Dien, implementing the roadmap for developing a competitive electricity market, the ministry has directed the separation of the National Power System Dispatch Center (A0) into the National Power System and Market Operation Company (NSMO).

The electricity market is not really complete and still has many bottlenecks.

Regarding the structure of the electricity industry, there are currently more than 140 factories participating in bidding, 5 electricity distribution corporations and hundreds of electricity retail companies operating, and many electricity market mechanisms have been issued.

However, Vietnam's electricity market is not yet fully developed, with many bottlenecks: difficulties and delays in attracting investment and negotiating electricity prices; the price mechanism is not transparent, cross-subsidy still exists between customer groups; consumers do not have the right to choose the electricity seller.

The challenge is even greater when, in just the next 5 years, the power capacity must triple from the current level - from 81,000 MW to 234,000 - 251,000 MW according to the adjusted Power Plan VIII and Resolution 70 of the Politburo . Without a true, transparent market, achieving this goal will be extremely difficult.

Deputy General Director of Vietnam Electricity (EVN) Nguyen Xuan Nam said that the process of building a competitive electricity market must be placed in the specific context of Vietnam. That is, the proportion of renewable energy has accounted for up to 30% of the system capacity (nearly 30,000 MW), creating great pressure on the work of regulation and operation.

At the same time, the demand for electricity growing at 12-15% per year is very "hot" compared to many developed countries, where the growth rate is only about 3%. If the market design is not suitable, Vietnam will have difficulty attracting new investment.

Mr. Bui Quoc Hoan - Deputy General Director of Southern Power Corporation (EVNSPC) - affirmed that the core factor of the competitive electricity market is the electricity price mechanism. Currently, there is still a situation of cross-subsidy between customer groups and between regions.

To implement a competitive retail market, it is necessary to consider building a flexible retail electricity price mechanism, negotiated by electricity retailers and electricity customers according to electricity market regulations. Customers who do not participate in the market will apply a unified retail electricity price according to state regulations.

Mr. Nguyen Anh Tuan - Vice President of Energy Association - Photo: C.DUNG

Need to expand more suppliers, regional electricity pricing mechanism

Mr. Nguyen Anh Tuan - Vice President of the Energy Association - said that a healthy competitive electricity market can only be formed when there are enough goods to buy and sell. Currently, only about 38% of the total capacity participates in the electricity market.

If BOT power sources and renewable energy sources that are enjoying the FIT mechanism continue to not participate in the market, this ratio will be even lower. That means the market lacks “sellers”, and cannot properly reflect the supply-demand relationship.

According to Mr. Tuan, all power plants, regardless of size and type, must participate in the competitive electricity market after the preferential period. Only when the proportion of participating sources gradually increases, will electricity prices reflect real costs and create a signal for investment in the right direction.

In addition, it is necessary to address the current problem that electricity prices are still calculated based on the national average, without distinguishing between regions. This makes it difficult for investors to make decisions, because it does not accurately reflect transmission and distribution costs.

The Association agrees with the proposal to study a regional or nodal pricing mechanism to create more accurate investment signals and encourage large customers to participate in the market.

Energy expert Ha Dang Son recommended that the Ministry of Industry and Trade soon study and switch to applying a more flexible electricity price mechanism, linked to actual consumption and new technology, allowing EVN to adjust retail electricity prices more flexibly according to market signals.

According to Minister Dien, it is necessary to promptly amend and supplement regulations on the operation of the competitive electricity market at each level. There is a roadmap to eliminate cross-subsidy of electricity prices between customer groups and regions, in accordance with the level of the competitive market; promulgate regulations on distribution service prices, ensuring the principle of "correct and sufficient calculation" of costs, especially in the electricity transmission stage.

"The system must be open, removing all bottlenecks in each stage of electricity operations. For example, boldly removing the investment policy level for projects that are already in the planning, to reduce procedures, promote progress and unlock social resources" - the Minister emphasized.

NGOC AN

Source: https://tuoitre.vn/de-xuat-co-che-gia-dien-linh-hoat-theo-khu-vuc-va-nguoi-dung-20251001144744211.htm