Will fully assess the impact on society and people
At the regular quarterly press conference of the Ministry of Industry and Trade in the second quarter, a reporter from Lao Dong Newspaper asked the leaders of the Ministry of Industry and Trade about the proposal to apply peak hour electricity prices to households.
In the draft amendment and supplement to the Electricity Law, the Ministry of Industry and Trade proposes to apply electricity tariffs according to peak and low hours for some residential customers when they meet sufficient technical conditions.
However, the current peak hour (17:30-22:30) is also the time when households use the most electricity for daily activities. How has the Ministry assessed the impact of this policy on people? If implemented, how will the new price list affect the electricity usage habits and living costs of households?" - Lao Dong Newspaper reporter asked.
Answering about this content, Mr. Bui Quoc Hung - Deputy Director of the Electricity Department (Ministry of Industry and Trade) said that currently, the calculation of electricity prices by time is built on the basis of the load chart of the power system.
Previously, the system was divided into two peak hours: noon peak and evening peak. However, when renewable energy sources, especially solar power, participate with a large proportion in the power system, solar power output at noon increased sharply, causing overload during noon peak hours to almost disappear. Therefore, peak load is currently mainly concentrated in the evening.
The calculation of electricity prices by time has been adjusted, from two peak hours to focusing on the evening peak hours. Currently, this mechanism has not yet been applied to customers using domestic electricity.
Mr. Bui Quoc Hung said that, according to calculations, the residential customer group has a relatively large electricity consumption capacity, second only to the industrial sector. Therefore, in the process of amending the Electricity Law, the Ministry of Industry and Trade is researching to be able to apply the electricity price mechanism according to peak and low hours at an appropriate time for some residential customers who meet sufficient technical conditions.
Those are customers with large electricity consumption and the ability to shift part of their electricity demand to low hours, thereby contributing to reducing the demand for mobilizing electricity during peak hours," Mr. Hung said.
However, according to Mr. Hung, the application also depends on technical infrastructure conditions. Previously, household electricity meters mainly measured electricity according to a tiered price schedule, without the function of measuring according to different time frames. If the electricity price mechanism is applied according to usage time, it is necessary to replace meters capable of measuring according to many time frames, and at the same time upgrade the measuring system and related transmission infrastructure.
In the process of drafting the Electricity Law, the Ministry of Industry and Trade has only put forward research proposals. The implementation must also fully assess the impact on society, on electricity users, as well as consider infrastructure and technical conditions before deciding on the official application time.
Applying peak electricity prices, some subjects will reduce electricity bills
Regarding the application of electricity prices according to peak and low hours for business groups, Mr. Hung said that changing the peak hours from both noon and evening to only evening peak hours, from 5:30 pm to 8:30 pm, will have different impacts on each customer group. Some groups benefit, but some groups are affected.
For example, for manufacturing enterprises such as textiles and garments, operating mainly during the day, when there are no longer lunchtime peak hours, they will be able to use electricity at normal prices, without having to bear peak hour electricity prices. Thus, electricity usage costs will decrease.
Conversely, some businesses that use a lot of electricity in the evening, such as the steel manufacturing industry, will be affected because production activities fall into peak hours, so they have to buy electricity at a higher price.
However, if these businesses are able to adjust production plans, shift part of their operations to nighttime outside peak hours, they will avoid having to buy electricity during high hours and benefit from low electricity prices.
Similarly, business establishments such as restaurants and hotels that use many cooling devices and air conditioners mainly during the day will also benefit when they no longer have lunchtime peak hours.
Adjusting peak hours will benefit some subjects and also some subjects will be affected. However, considering the overall electricity system, the goal is to encourage customers using large amounts of electricity to shift loads, avoid using electricity during peak hours to reduce the need to mobilize capacity during times when the system is under great pressure, especially during hot spells," Mr. Hung said.
Explaining the electricity bill increase in June
Regarding the high increase in electricity bills in June, Mr. Hung explained that on hot sunny days, the electricity consumption of households often increases sharply due to increased electricity demand. In addition, currently household electricity customers still apply a progressive electricity price schedule in steps. Meaning that the price at level 1 is the lowest, going to level 2 is higher, level 3 is even higher and the next steps have significantly higher prices.
Therefore, when electricity consumption increases, especially in hot weather due to the use of many air conditioners and cooling devices, electricity output will exceed to higher price levels. This is the reason for the increase in electricity bills, and this is inevitable.
The main solution is still to use electricity sparingly, limit unnecessary electricity consumption to reduce electricity output at high price levels, thereby contributing to reducing electricity bill costs," Mr. Hung said.
