EVN explains the reason for the loss of 44,000 billion VND, retail price of electricity sold lower than cost price

Information from Vietnam Electricity Group (EVN) released on September 9 said that amending Decree 72 of the Government on the mechanism and time for adjusting average retail electricity prices, which allows EVN to compensate for losses, is necessary and in accordance with regulations.

EVN provides more information about factors causing losses in the electricity industry - Photo: QUANG DINH

According to EVN, in the 2022-2023 period, the costs that have not been calculated or have not been fully calculated in the electricity price adjustments are about 44,000 billion VND. This has caused EVN to not be fully compensated for input costs and affected the preservation and development of state investment capital in enterprises.

EVN lacks resources for investment and capital preservation

In addition, in the coming time, EVN will implement large-scale, important and urgent projects such as Ninh Thuan 1 Nuclear Power Plant, Quang Trach 2 & 3 LNG Power Plant, Bac Ai Pumped Storage Hydropower Plant, expanded hydropower plant projects, offshore wind power... With the investment plan as mentioned above, the demand for investment capital to implement projects in the coming time is very large.

Meanwhile, the implementation of the above decree amendment is based on the Electricity Law 2024, Law No. 68/2025 - Law on Management and Investment of State Capital in Enterprises, so allowing the calculation of expenses that have not been calculated or have not been fully calculated is necessary and appropriate according to regulations.

Explaining more clearly the reasons for the loss in production and business activities, EVN said that in the electricity cost structure, the generation stage accounts for 83%; the remaining stages (transmission, distribution - retail, industry management - support) account for about 17% of the cost and are on a downward trend due to cost savings.

However, in the 2022-2023 period, input fuel prices for coal, oil, and gas power production and foreign exchange rates will increase dramatically due to the impact of the Russia-Ukraine geopolitical event and fuel demand during the recovery period after the COVID-19 pandemic.

At the same time, the influence of weather and hydrological factors, the proportion of hydroelectric power output decreased (hydroelectric power is a cheap source of electricity), so it is necessary to replace the expensive power sources.

In fact, the total electricity output purchased from factories accounting directly under EVN in 2022 accounts for 46%, and in 2023 accounts for 42% of the total output of the entire system, the rest EVN buys electricity from partners outside EVN.

Selling below cost for two consecutive years

EVN said it has optimally and regularly reduced major repair costs (at least 10%). Therefore, in 2022, the cost of electricity production and business is 2,032.26 VND/kWh (of which the cost of electricity generation according to commercial electricity is 1,698.45 VND/kWh, equal to 83.57% of the cost) while the average commercial electricity selling price is 1,882.73 VND/kWh. Thus, the electricity selling price is 149.53 VND/kWh lower than the electricity cost .

In 2023, the cost of electricity production and business is 2,088.90 VND/kWh (of which the cost of electricity generation according to commercial electricity is 1,744.12 VND/kWh, equal to 83.49% of the cost) while the average commercial electricity selling price is 1,953.57 VND/kWh. Thus, the electricity selling price is 135.33 VND/kWh lower than the electricity cost.

In the context that retail electricity prices are not enough to cover input costs, EVN said that for 2022, to stabilize the macro economy and social security, the average retail electricity price will remain the same since the adjustment on March 20, 2019, although production and business costs and prices have both increased.

In 2023, EVN said that following the direction of competent authorities on electricity price management without jerks and with a roadmap, avoiding shocking effects on the economy, retail electricity prices were adjusted twice on May 4, 2023 (up 3%) and November 9, 2023 (up 4.5%), but this adjustment level was much lower than the results of calculating the average electricity price.

At the same time, for the period of 2020 - 2021, EVN has reduced electricity prices, reduced electricity bills, and supported electricity bills in 5 phases with a total amount of VND 15,233.1 billion for electricity customers affected by COVID-19.

This group also carries out the task of supplying electricity to ethnic minorities, remote areas, border areas, and islands, with the difference in electricity sales revenue losing hundreds of billions of dong.

This leads to the costs that have not been fully calculated in the electricity price adjustments in the 2022-2023 period being about 44,000 billion VND.

In fact, the electricity prices of these years have been inspected by the Ministry of Industry and Trade and the State Audit has also conducted a thematic audit on "Electricity price management in the period 2022 - 2023".

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Source: https://tuoitre.vn/evn-giai-thich-nguyen-nhan-gay-lo-44-000-ti-dong-gia-ban-le-dien-ban-thap-hon-gia-thanh-20250909145402627.htm