Amending the Electricity Law: Eliminating the inadequacies in retail electricity prices

Cường Ngô |

On the afternoon of November 7, the 8th session of the 15th National Assembly discussed in the hall the draft Law on Electricity (amended) to contribute to solving the shortcomings of the electricity market and cross-subsidy of electricity prices. This is a very important draft law, affecting many areas of the economy, so the Government wishes to pass the Law on Electricity (amended) according to the one-session process.

Electricity market problems need to be resolved immediately

Mr. Ha Dang Son - Director of the Center for Energy and Green Growth Research - said that the 8th Power Plan was issued in 2023, however, the plan to implement the new Power Plan was issued in early 2024.

"One of the reasons why this plan cannot be issued soon is due to the lack of legal bases related to both public investment (applicable to state-owned enterprises such as EVN, PVN...) and private investment (both in power source investment and power grid), making it very difficult for state management agencies to come up with appropriate implementation plans or propose related policy mechanisms," said Mr. Son.

According to Mr. Son, in the process of implementing the Power Plan, issues related to the legal basis have also been revealed, leading to risks in ensuring the progress of power source investment as stipulated in Power Plan VIII.

When amending the Electricity Law, Dr. Thai Doan Hoang Cau - an expert in economic behavior research in the electricity market - said that it is necessary to pay more attention to the urgent issue of implementing modern and worthy electricity market reforms and how to ensure that the implementation of the new Electricity Law after its promulgation. At the same time, it is necessary to resolve difficulties in planning for electricity development, renewable energy, direct power purchase mechanism (DPPA), economical and efficient use of electricity, and self-produced and self-consumed rooftop solar power.

"The slow implementation of appropriate electricity market mechanisms is the bottleneck that needs to be quickly cleared to develop the electricity industry and the socio-economy," said Dr. Thai Doan Hoang Cau.

According to him, the shortcomings of the electricity market, including the fact that retail electricity prices do not really follow the market mechanism, do not promptly reflect fluctuating input costs and the scarcity of supply and demand, are among the reasons causing difficulties in negotiating long-term electricity purchase and sale contracts, causing delays in implementing power source and grid development projects according to electricity plans.

"Moving towards implementing a retail electricity market with many competing wholesale electricity buyers will help investors more easily reach long-term wholesale electricity PPA agreements than with only one wholesale and retail electricity buyer, Vietnam Electricity Group (EVN). This mechanism will also help customers have the motivation to use electricity economically and efficiently, contributing to reducing the pressure to invest in new power source and grid capacity" - Dr. Cau said.

The current wholesale electricity market designed in 2015 has become inadequate for the new situation.

Establish and maintain a monitoring and evaluation mechanism after the revised Electricity Law is promulgated.

Dr. Thai Doan Hoang Cau said that the National Assembly needs to continue to support the Government in resolving institutional problems that may arise and have a mechanism to monitor the effective implementation of the electricity market reform program. In particular, it is necessary to consider regulations on projects under the reform program, developing electricity market mechanisms in the group of urgent and important electricity development projects that need top priority, and at the same time, invest the right amount of resources and funding to implement reforms commensurate with the scale and huge growth of Vietnam's electricity market.

"I think it is necessary to consider establishing a specialized agency instead of concurrent agencies to manage and coordinate the implementation of this large and complex electricity market reform program in a scientific and effective manner. There needs to be a policy to treat, attract and develop highly qualified human resources with a deep understanding of the electricity market for this agency," he said.

Establish and maintain a mechanism for monitoring, evaluating and requiring more regular and periodic requirements for the electricity market reform program to limit subjective causes such as lack of funding, direction, or management that can lead to delays in implementing electricity market mechanisms.

The Electricity Law mentions 6 major policies

In this draft of the Electricity Law (amended), the Government has mentioned six major policies, including three important contents. First, electricity planning; second, investment in important electricity projects and works; third, electricity purchase price, including household electricity price, to resolve practical shortcomings and concerns. Therefore, experts believe that the Electricity Law (amended) should be passed soon to resolve urgent issues.

Cường Ngô
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Revised Electricity Law Project: Eliminate cross-subsidy, bring electricity prices towards the market

Cường Ngô |

After nearly 20 years, the Electricity Law has been amended and supplemented four times but still has some limitations, including the cross-subsidy mechanism for electricity prices. Therefore, experts believe that with three major contents, the amended Electricity Law, when passed, will resolve these shortcomings.

Workers worry about new electricity price hike by landlord

Phương Hân |

For many workers who rent accommodation, electricity prices will be calculated according to business prices, so they are not much affected by this latest electricity price increase.

Đề xuất thông qua dự án Luật Điện lực (sửa đổi) tại Kỳ họp thứ 8

PHẠM ĐÔNG |

Chính phủ đề nghị trình Quốc hội cho ý kiến, thông qua theo quy trình 1 kỳ họp đối với dự án Luật Điện lực (sửa đổi) tại Kỳ họp thứ 8, Quốc hội khóa XV.