Powering up competitive outlook

Power generators said they would not benefit from Vietnam’s competitive power market test starting in July.
Accordingly, power generators argued that the competitive power market failed to address Electricity of Vietnam’s (EVN) monopoly status. This is evidenced through the fact that power generators are all required to sell power to Electricity Power Trading Company (EPTC), the single buyer under EVN.

In light of the proposed power price revision scheme, each month EVN will keep close eyes on changes to input parameters which are key factors constituting the power price to decide on possible price revisions.
If the average power price slides by at least 5 per cent compared to existing selling price, EVN is required to downwardly revise the power selling price to the average level.

When the average power price is hiked by 5 per cent or more compared to existing levels, EVN is also eligible to lift up the selling price by at most 5 per cent after it submitted relevant records to the Ministry of Industry and Trade’s (MoIT) Electricity Regulatory Authority of Vietnam (ERAV) for checking and got the nod from the MoIT.

General director of Nhon Trach 2 Power Joint Stock Company Hoang Xuan Quoc said the mechanism favoured EVN which had the right to revise power retail prices while was yet to make clear whether power generators could lift up the price of power they sold to EVN whenever input material costs were on the rise.

A PetroVietnam Power Corporation representative commented that power generators could hardly cover their production costs with proposed competitive power market prices calculation methods, and attracting investors into the power sector would still remain a dilemma.

An executive of a listed power firm said negotiating with EVN on power selling price still remained a problem to most power generators even with the newly proposed competitive power market operational scheme.
“When there is only a single buyer (EPTC) power generators could hardly enjoy favourable pricing terms,” said the executive.
Head of ERAV’s power price and charge department Tran Tue Quang said one of core objectives in establishing the competitive power market was to help EVN shortly avoid the debtor status.

Quang said power generators had the right to upwardly revise their selling price to EVN on the back of spiraling input costs. However, their revisions must follow concrete plans and get EVN approval. – VIR

Tags: Vietnam electricity, Vietnam electricity market, Vietnam energy