In the Draft Law amending and supplementing a number of articles of the Electricity Law being appraised by the Ministry of Justice, the Ministry of Industry and Trade (the drafting agency) proposed to supplement regulations on applying electricity prices during peak hours, off-peak hours and normal hours to residential customers when technical conditions permit.
In principle, this is a direction that is consistent with the trend of modern energy management.
Many countries have applied electricity tariffs based on usage time to encourage people to shift their electricity consumption needs to times when the system is less stressed.
This helps reduce peak hour load, use electricity infrastructure effectively and limit the need to invest in new power sources.
However, this proposal is also raising a controversial question: can people really change their electricity usage behavior as expected by management agencies?
For businesses, adjusting production time to avoid peak hours is something that can be calculated. Many factories can switch shifts, rearrange production lines or choose the time to operate large electricity consumption equipment to reduce costs.
But for households, the story is completely different. Especially, peak hours - the time from 5:30 PM to 10:30 PM - is also when most people finish work and go home from school.
That is when families cook dinner, shower, turn on the air conditioner, children study, the whole family gathers after a working day... And these needs are almost impossible to push back to 0:00 to 6:00 am just because electricity is cheaper. People cannot cook at midnight, nor can they force their children to study at 3:00 am.
If people are not very likely to change their living behavior, the easiest thing to happen is that electricity bills increase, while the goal of reducing peak hour load is not achieved as expected. And this is something that needs to be carefully calculated before the policy is implemented.
Another issue is fairness. Families with better economic conditions can invest in smart devices, timer water heaters, power storage systems or rooftop solar power to adapt to the new price list.
Meanwhile, workers renting rooms, low-income workers or large households are less likely to choose. They may become the group most affected if peak hour electricity prices are significantly higher.
Electricity is an essential commodity, and also an input for most production and service activities. Therefore, any change in electricity price policy has a very large spillover effect on social life and the price level.
Therefore, if moving towards applying hourly electricity prices to residential customers, it is necessary to have an appropriate roadmap, pilot in a narrow scope, and fully assess the impact on each population group before widespread implementation.
More importantly, policies must be designed so that people really have conditions to adjust their electricity use, not just simply pay more for uncut living needs.
