Changed calculation method again, electricity price is about to increase?

In addition to adjusting according to changes in fuel prices, exchange rates, and electricity output structure; gradually reducing and eliminating cross-subsidy between customer groups and regions; the electricity price list will be studied and implemented seasonally and regionally.

This is a particularly noteworthy content stated in the Project to adjust the National Power Development Plan that has just been approved by the Government.

Mr. Tran Viet Ngai - Chairman of the Vietnam Energy Association said: “Calculating electricity prices by season: different summers, different winters, different rainy seasons has been mentioned for a long time but has only now been included in the planning for research and implementation. How different electricity prices are calculated depends largely on the amount of electricity consumed, especially the density of electricity use. For example, the South uses a lot of electricity, so the price must be different from the North, which uses less. In the summer, people use more electricity than in the winter, so the electricity price must be calculated differently…”.

Vice President of Vietnam Electricity Association, Professor and Academician Tran Dinh Long also pointed out the fact: Electricity prices are greatly affected by the power source. Power sources depend heavily on the season. In the rainy season, many hydropower plants account for a large part of the power structure, so electricity prices may be low. In the dry season, the electricity industry has to run on coal, gas, and oil, so electricity prices will be higher. Therefore, calculating electricity prices according to the season is close to reality.

However, there is another reason why electricity prices are calculated seasonally, according to experts in the electricity industry, which is that our electricity generation structure is changing alarmingly. Cheap hydropower sources are increasingly taking up less and less of the source structure, instead, electricity running on coal, oil and gas is increasing. Even electricity purchased from China has a very different price and is gradually increasing over time.

Mr. Tran Viet Ngai said that in fact, the electricity industry is only making a good profit from hydropower, while coal and gas power are making very little profit; oil power is making a total loss. Not to mention, the resources for electricity will gradually be depleted, and they will have to be imported, and the cost will increase. “We have exploited almost all of our coal power, while the factories mainly use Chinese technology; gas power has difficulty with raw materials; oil power is making a loss. All of these are bad realities for the electricity industry,” another expert in the electricity industry analyzed.

EVN's report also said that the group had to continuously adjust the output structure of all types of electricity sources, in which cheap electricity accounts for a gradually decreasing proportion. Most specifically, in the dry season of 2016, hydropower is expected by EVN to account for only 29.14% of the total system's source structure (previously about 40%). Coal-fired thermal power accounts for 40.84% ​​of the total system's source structure. Gas-fired thermal power accounts for 27.71% of the total system's source structure; the rest is purchased from China and other sources. Since the end of last year, EVN has had to calculate and implement a plan to run on oil when electricity consumption increases.

Experts say that if the seasonal and regional electricity price options are not taken into account, EVN, with its cumbersome and inefficient operating apparatus, will only suffer losses, while it cannot keep increasing electricity prices several times a year to cover costs.

"Don't blame the people"

Up to now, no new electricity price plan has been announced. Mr. Dinh Quang Tri, Deputy General Director of EVN, previously affirmed that in the first 6 months of 2016, EVN will not propose to increase electricity prices, but he also noted that electricity consumption growth is at 12 - 13%/year, so the investment pressure for the electricity industry is very large and will create great pressure to increase electricity prices.

The principle is that the electricity price list will be audited annually. If EVN incurs losses due to high electricity prices, high electricity production costs and unbalanced finances, then EVN will report on adjusting the electricity price. The four factors affecting the electricity price include the structure of mobilized electricity sources, fuel prices, electricity purchase costs, and exchange rates. If all four of these factors increase by more than 7%, then the electricity price will be considered to increase and the review period is 6 months.

However, with the move to seasonal electricity prices, people are starting to worry that they have to use a lot of electricity every summer. If the summer electricity price is higher than the winter electricity price, how much higher will the electricity bills be?! With the reason of regulating electricity prices reasonably according to the source of generation and consumption factors, the "power company" will use high electricity prices to reduce people's consumption needs in the most reasonable way for themselves.

Professor Tran Dinh Long agreed that people's concerns are well-founded. He said that it is necessary to consider the electricity price, if it is calculated seasonally, it is reasonable, balancing the interests between EVN and the people, not "putting all the money on the people". EVN needs to have acceptable profits and people also need to be able to "afford" the electricity bill. "I know that balancing the benefits of electricity prices for all parties is very difficult. It depends on the macro management policy of the Government and the ministries advising the Government. The price of electricity generation accounts for 60-70% of the cost of electricity that consumers have to pay, and electricity generation depends on the season and time of consumption during the year, so calculating a price that people can "afford" is completely possible," said Mr. Long.

According to Dan Viet