Gov’t fuels competitive power market

The Government is considering giving more incentives to the competitive power market in Vietnam, allowing power price negotiation and payment following market prices between producers and distributors in the second phase instead of the third phase as

The Government is considering giving more incentives to the competitive power market in Vietnam, allowing power price negotiation and payment following market prices between producers and distributors in the second phase instead of the third phase as predicted.

The nation kicked off the pilot three-step competitive generating market on July 1 under which 48 power plants, with above 30 megawatts capacity, out of a total of 73 joining the pilot, with 5% of their power to be sold on a market-based price on an hourly basis with the rest to be paid by contract.

In the second stage, electricity trading will be similar to the first stage but will allow competitive electricity wholesale while the third stage will undergo competitive electricity retail sale. According to the Ministry of Industry and Trade, the nation has yet to decide when it will begin the second and third phase as it has to evaluate results of the first phase.

The Government Office on Monday reported positive results after 20 days of the pilot operation, saying all qualified power plants complied with regulations in price offering and power prices were decided by the market.

However, there were shortcomings in legal documents, operation software and mobilization from power plants in case of gas shortages.

To prepare for official operation of the market, the Government has asked the ministry and Vietnam Electricity Group (EVN) to set up a minimum investment plan for information technology infrastructure, operation regulations and payment. The ministry and EVN will ask the Government to implement a special mechanism to speed up power plans, maybe by allowing electricity price payment from the second phase.

The two units will work with the World Bank over a partial-guarantee mechanism for payment in the competitive market and use of price stabilization fund. The nation should also have solutions for gas regulation to ensure gas supply and fairness among customers.

The Government has also told EVN to submit the project establishing power generating corporations in the third quarter of this year – SGT

Tags: Vietnam electricity, Vietnam electricity market, Vietnam energy