If electricity prices are applied by the hour: How will households pay for electricity?
Currently, electricity bills for households are calculated based on electricity consumption in the month and apply a tiered electricity price schedule. Accordingly, the more electricity used, the higher the output belonging to higher levels will be calculated at a higher price. This calculation method does not distinguish whether households use electricity during peak hours, off-peak hours or normal hours.
If switching to applying hourly electricity prices, the electricity bill calculation method of households will have a significant change when the time of electricity use becomes an important factor besides the total electricity consumption. With the same amount of electricity used, but if consumed at different time frames, the amount to be paid may be different.
For example, two households consume 600kWh of electricity each month, but electricity bills may be different. Households using a lot of electricity during peak hours will have to pay higher costs than households that may shift part of their electricity demand to low hours.
However, expanding this mechanism to residential customers also raises issues that need to be carefully considered. Unlike businesses, the electricity demand of households is closely linked to daily living rhythms and in many cases it is very difficult to proactively switch to off-peak hours.
Talking to Lao Dong Newspaper, Ms. Nguyen Huong (Tay Mo ward, Hanoi) said that she is an office worker, working office hours from 8 am to 5:30 pm. Therefore, family activities such as eating, playing, entertainment, studying, bathing... mainly take place in the evening.
If peak hours are applied to domestic electricity like peak hours for electricity production and business, i.e. from 5:30 pm to 10:30 pm, electricity bills will definitely increase, because most families use electricity a lot in the evening" - Ms. Huong expressed her opinion.
Similarly, Mr. Nguyen Truong (Cau Giay ward, Hanoi) said that some households can adjust the time to use some electrical appliances, but this possibility is relatively limited because the living schedule depends on the working and school hours of the members.
Mr. Truong proposed that the time frame applied to domestic electricity should be calculated differently from the time frame for electricity production and business to be more suitable for reality.
Calculating electricity prices by the hour is not aimed at increasing electricity prices
Talking to PV of Lao Dong Newspaper, Dr. Nguyen Huy Hoach - energy expert, member of the Scientific Council of Vietnam Energy Magazine - said that if switching to applying hourly electricity prices, the method of calculating electricity bills for households will change. The hourly electricity price mechanism will contribute to adjusting the electricity usage behavior of customer groups, first of all large customers, industrial customers, and then domestic electricity users.
For domestic customers, according to Dr. Nguyen Huy Hoach, when applying hourly electricity prices, the total electricity consumption of a household may not change, but electricity bills may change. Currently, the load chart has shifted, with peak hours from noon to evening.
According to the hourly electricity price mechanism, electricity prices during peak hours will be higher than during off-peak hours. For example, if peak hours fall between 5:30 PM and 10:30 PM, this is also the time when most people return home from work and electricity demand increases. Therefore, using a lot of electricity during this time frame can significantly affect household electricity bills.
If electricity prices increase during peak hours and at the same time are still calculated in steps, the final electricity bills of households using domestic electricity may increase," Dr. Nguyen Huy Hoach said.
However, the energy expert said that the goal of the electricity industry as well as the proposal of the Ministry of Industry and Trade is not to increase electricity prices for consumers, but to aim to adjust people's electricity use behavior to be more suitable for the supply capacity of the electricity system.
For example, instead of using a washing machine during peak hours, households can switch to washing clothes after 10 pm. Similarly, devices that can be used later can also be switched to off-peak hours.
Moving electricity demand away from peak hours also helps the power system reduce peak load. When the maximum power of the system decreases, the operating cost of the power system can also decrease accordingly.
According to Dr. Nguyen Huy Hoach, the special point of load adjustment is that it does not generate more electricity, but still brings the same efficiency as adding power generation capacity at the times when the system needs it most.
Suppose one million households also reduce an average of about 1kW during peak hours, then the system will reduce about 1,000MW of maximum load - equivalent to the capacity of a large thermal power plant or hydropower plant. To have an additional 1,000MW of power generated in the traditional way, it is necessary to invest billions of USD, many years of construction and continue to incur fuel, operation, as well as emissions costs throughout the project life cycle.
Meanwhile, adjusting the exploitation load is the flexibility of existing loads without building more power plants, but creating equivalent efficiency in balancing supply and demand of the system" - Dr. Hoach said.
