Electricity prices need to accurately reflect the nature of production costs
According to energy expert Ha Dang Son - Director of the Center for Energy Research and Green Growth - if comparing the average electricity price in Vietnam with other countries in the region and internationally, it can be seen that Vietnam's average electricity price is at the same level as China and India.
This price is higher than some countries such as Bangladesh or Malaysia, which have their own advantages such as hydropower resources (Bangladesh) or inland oil and gas (Malaysia). From there, it is possible to build an effective compensation mechanism.
On the contrary, Mr. Ha Dang Son said that many other countries in the region have higher electricity prices than Vietnam, such as Indonesia, Thailand, Cambodia, Singapore and the Philippines. In Singapore alone, electricity prices are now approaching Japan's level. In Thailand, after reforming the electricity price mechanism, especially shifting to the hourly model, the average electricity price has increased sharply compared to 3-4 years ago, even 1.5 times higher.
"From there, it can be seen that the problem is not simply "electricity prices increase or decrease", but how to make electricity prices accurately reflect the nature of production costs, ensuring stability and sustainability in investing and operating the national power system. Many developed countries are also gradually switching to a market mechanism in establishing electricity prices - transparency, full cost factors and associated with the trend of investing in clean energy.
If Vietnam maintains electricity prices lower than actual costs for the long term, it can create a temporary competitive advantage for production or social security. However, this poses a potential risk of imbalance in infrastructure investment, not ensuring stable power supply, and lack of sustainability in the long term" - Mr. Ha Dang Son assessed.
According to this expert, the fundamental solution to create peace of mind for investors is to have a reasonable, transparent roadmap to adjust electricity prices, accurately reflecting costs, and at the same time having a policy to minimize social impacts when adjusting. This requires harmony between social security goals and market mechanisms.
"Currently, from my personal point of view, the signals about the issuance of the Government's mechanisms, decrees and adjustment policies are quite clear. However, it is necessary to continue to concretize with stronger actions, towards a transparent, fair and stable electricity market, to attract domestic and foreign investors to stay with the Vietnamese energy industry for a long time.
Low electricity prices can create temporary advantages in terms of social security or input costs for production. However, if the low price is maintained and does not reflect the correct cost, it will cause serious risks to ensuring long-term electricity supply, reduce system quality and limit investment capital flows.
Therefore, the fundamental solution is to need a reasonable, transparent, and market-oriented roadmap to adjust electricity prices, fully reflecting the cost of composition, while still ensuring that there is no price "shock" for people and the economy. Balancing between marketization of electricity prices and social stability is a difficult problem but must be solved" - Mr. Ha Dang Son emphasized.
Currently, according to my observation, the signals from the Government are quite clear. The promulgation of decrees, operating mechanisms, and orientations for electricity price reform is being implemented relatively synchronously.
The legal environment and policies are not really transparent and consistent
Besides the story of electricity prices, another major barrier to the development of the electricity industry is the legal environment and policies that are not really transparent and consistent.
Resolution 68 of the newly issued Politburo is a very important turning point. This Resolution clearly states the tasks: Improving the investment and business environment; Testing special mechanism models for new sectors such as renewable energy, nuclear power, hydrogen electricity... Establishing clear payment mechanisms, contracts, and selling prices, not criminalising economic - investment relations; Increasing access to capital for power projects.
"If the spirit of Resolution 68 is fully and properly implemented, I believe that major problems in the electricity industry will gradually be resolved in a fundamental and sustainable way" - Mr. Ha Dang Son affirmed.
