Moving towards eliminating cross-subsidy in electricity prices
The 8th session of the 15th National Assembly will discuss the draft revised Electricity Law. This is a very important law project, affecting many areas of the economy, so the Government wishes to pass the Electricity Law (revised) under the one-session process.
In this revised Electricity Law Project, the Government has mentioned three major contents. The first is electricity planning; the second is investment in important electricity projects and works; the third is electricity purchase price, including household electricity price, to resolve practical shortcomings and concerns.
Speaking with Lao Dong, Mr. Tran Viet Hoa - Director of the Ministry of Industry and Trade - said that amending the Electricity Law is very urgent and at the same time, overcoming the problems and shortcomings of the current law.
"This Electricity Law has added regulations on a reasonable retail price structure, gradually reducing and moving towards eliminating cross-subsidy between regions and customer groups not participating in the competitive retail electricity market. The electricity price mechanism is also applied appropriately to customer groups with large electricity consumption. Compared to the 2004 law, the Electricity Law (amended) has added many regulations and updated to resolve some of the problems in the past time" - Mr. Tran Viet Hoa affirmed.
Prof. Dr. Tran Dinh Long - Vice President of Vietnam Electricity Association - said that the amendment of the Electricity Law not only benefits the electricity industry but also has a positive impact on the socio-economy in general. Providing enough electricity for economic development is a prerequisite for Vietnam to move towards the goal of sustainable development. In addition, policies to encourage renewable energy will create many new jobs in this field.
Ready to implement plan if Electricity Law is passed
Speaking with Lao Dong Newspaper, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that, following the Government's direction, the Drafting Committee will try to complete the draft Electricity Law for approval in a one-session process.
According to Mr. Tan, during the implementation process, if the revised Electricity Law is passed, the implementation in practice is very urgent. The Ministry of Industry and Trade has prepared an implementation plan, in which the immediate task is to develop a document guiding the implementation at the decree and circular levels in a timely manner.
The Ministry of Industry and Trade also held meetings with businesses, ministries and sectors to organize implementation, because many contents of the Electricity Law are very technical and new, while new and difficult issues often cause confusion when implemented in practice. Therefore, specific instructions and meetings are needed.
"We also have to meet and work with localities because when the revised Electricity Law is passed and comes into effect - the role of localities is very important in accordance with the spirit of strong decentralization" - Deputy Minister Nguyen Sinh Nhat Tan said.
Developing nuclear power in the coming period is very necessary.
The new point in the draft Electricity Law (amended) this time is the mention of nuclear power development. Accordingly, the State has a monopoly in investing in the construction of power plant projects of this type.
Mr. Bui Quoc Hung - Deputy Director of the Department of Electricity and Renewable Energy - said: Currently, the Government has directed the Ministry of Industry and Trade to coordinate with the Ministry of Science and Technology to study the experience of nuclear power development in the world and the current situation in Vietnam.
According to Mr. Nguyen Sinh Nhat Tan - Deputy Minister of Industry and Trade, based on international experience, with the development of renewable energy, the role of base electricity, including nuclear power, is very important. Regarding the choice of technology for developing nuclear power, Mr. Tan said that he will definitely choose new generation technology that has been applied in practice. The development of nuclear power in the coming time, according to Mr. Tan, also depends on the request for approval from competent authorities. From there, calculate the investment, technical cycle and other issues.
Inadequacies in cross-subsidy structure in electricity price
The current Electricity Law stipulates "implementing a reasonable retail electricity price structure for customer groups", but over the past 10 years, the price structure has revealed inadequacies when people have to cross-subsidize production.
Accordingly, electricity prices are cross-subsidized between groups of household electricity consumers (those who use a lot compensate those who use little); cross-subsidized between household electricity prices and production electricity prices (household electricity prices paid by people are higher than electricity sold by businesses); cross-subsidized between regions (electricity in island communes and districts is usually 7,000 - 9,000 VND, but is still sold for 1,000 - 2,000 VND, meaning low areas compensate high areas).
The National Assembly's Economic Committee believes that the cross-subsidy mechanism for electricity prices should be eliminated. This is to ensure social equality, market principles and encourage electricity saving in the manufacturing sector.
