Introduction on Vietnam electricity market
26-05-2021
Introduction on Vietnam electricity market
+ Introduction on Vietnam electricity market
The deregulation and development of electricity market in many countries proved that it is the advanced stage of management science in energy field. Electricity market creates fair competitive business environment for participants and becomes outstanding solution to attract the investment and to raise the efficiency of production and business activities for the power industry.
Electricity market has been developed all over the world, not only a single national market but also multi-national one trading the power among countries in the same region. There are many electricity markets currently successful operated in USA, Europe, etc. ASEAN member countries such as Singapore, Philippine, Thailand, Malaysia, etc. have positive steps in forming their individual electricity market and toward the ASEAN electricity market in the future.
On 01/07/2005, the internal electricity market of the Electricity of Vietnam (EVN) was formed with 8 power plants participated in, creating the foundation of competitive electricity market development in Vietnam in the next stages. On 26/01/2006, Decision 26/2006/QĐ-TTG was approved by the Prime Minister on the roadmap and conditions for formation and development of different levels of the electricity market in Vietnam
Purpose of Vietnamese electricity market establishment:
- To step by step develop a competitive electricity market in a stable manner, eliminate subsidy for the power industry, increase the electricity consumers right to select electricity suppliers
- To attract investment from all economic sectors inside and outside the country into electricity-related activities, gradually reduce the state investment in the power industry
- To raise efficiency of production and business activities of the power industry, reduce the pressure of increasing electricity price
- To ensure the stable and reliable supply of electricity with higher and higher quality
- To ensure sustainable development of the power industry
Roadmap for formation and development of different levels of the electricity market in Vietnam
(Pursuant to the Decision 26/2006/QĐ-TTG at the proposal of the Prime Minister on 26/01/2006)
Vietnams electricity market shall be formed and developed through three levels:
- Level 1 (2005-2014): The competitive electricity production market.
- Level 2 (2015-2022): The competitive electricity wholesale market.
- Level 3 (after 2022): The competitive electricity retail market.
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Each level shall be developed through two steps: experimentation and completion, specifically:
a) Step 1 - level 1: The experimental competitive electricity production market (from 2005 to 2008)
- To form competitive electricity production market for power plants of the Electricity of Vietnam (EVN) to compete in electricity production on an experimental basis after the model of sole purchaser. Power plants, power-transmitting companies and power-distributing companies of the EVN shall be reorganized into independent business cost-accounting companies.
- Independent power producers (IPP) not owned by the EVN shall continue selling electricity to the EVN under concluded long-term power purchase agreements (PPA).
- At the end of the experimental step, major power plants of the EVN, which play an important role in the power system, must be transformed into IPPs in form of independent state companies; the other power plants must be transformed into IPPs in form of joint-stock companies in preparation for a complete competitive electricity production market.
- The Ministry of Industry and Trade shall promulgate regulations to regulate operations of the market and guide the implementation thereof.
b) Step 2 - level 1: The complete competitive electricity production market (from 2009 to 2014)
- To form a complete competitive electricity production market after prerequisites for this step have been met.
- To permit IPPs not owned by the EVN to participate in price offering in order to start the complete competitive electricity production market (after the sole-purchaser model); electricity producers shall sell electricity on the market through PPAs or competitive price offers on the spot market, provided that the amount of electricity sold in either of these two forms is regulated by the Electricity Regulation Department.
c) Step 1 - level 2: The experimental competitive electricity wholesale market (from 2012 to 2014)
- To form an experimental competitive electricity wholesale market when prerequisites for this level have been met.
- To permit the selection of a number of major distributors and customers for establishment of the experimental competitive electricity wholesale market. To permit the establishment of a number of wholesalers in order to enhance the competitiveness in electricity wholesale. Current electricity-transmitting companies may be consolidated into a sole national electricity-transmitting company under the EVN; distributors, system operators and transaction administrators in the electricity market shall continue to be managed by the EVN.
d) Step 2 - level 2: The complete competitive electricity wholesale market (from 2014 to 2022).
- To form a complete competitive electricity wholesale market when prerequisites for this step have been met.
- To permit the transformation of the EVNs power-distributing companies into independent companies (state or joint-stock companies) so that they can purchase electricity directly from electricity producers and, vice versa, the latter can also compete to sell electricity to them. Wholesalers shall also participate in competition to sell electricity to distributors and major customers
e) Step 1- level 3: The experimental competitive electricity retail market (from 2020 to 2022)
- To form an experimental competitive electricity retail market when prerequisites for this level have been met.
- To permit the selection of a number of appropriate distribution networks for experimentation. Based on the electricity consumption levels set by the Electricity Regulation Department, customers may select electricity suppliers for them (electricity retailers). The electricity-retailing function of the distributors selected for experimentation shall be separated from their functions of managing and operating distribution networks; electricity retailers shall compete to sell electricity to every customer and to purchase electricity from electricity wholesalers.
f) Step 2 - level 3: The complete competitive electricity retail market (after 2022)
- Based on the electricity consumption levels set by the Electricity Regulation Department, customers nationwide shall have the right to select electricity suppliers for them (electricity retailers) or purchase electricity directly from the market.
- Organizations and individuals that meet the requirements on electricity-related activities may establish new electricity-retailing units to compete in the retail of electricity. Such units shall have the right to purchase electricity from electricity producers or from the market for retail to customers.
Note: In this introduction, the fundamental issues in Vietnamese competitive generation market (VCGM) are described. For further information, please contact us:
Vietnam MW Co., Ltd
Address : 10th Floor, C’land Building, 156 Xa Dan 2 Street, Hanoi, Vietnam
Email : nam@vmw.vn
Phone : +84 966 866 766
Web : www.vmw.vn
Ghi chú: Trên đây, chúng tôi xin giới thiệu sơ bộ về thị trường điện Việt Nam, nếu có thắc mắc hoặc cần trao đổi chi tiết hơn, quý vị có thể liên lạc theo địa chỉ sau:
Vietnam MW Co., Ltd
Địa chỉ : Tầng 10, tòa nhà C’land, 156 Xã Đàn 2, Đống Đa, Hà Nội
Email : nam@vmw.vn
Hotline : 0966.866.766
Web : www.vmw.vn
