Competitive wholesale electricity market to be launched in 2014
The Ministry of Industry and Trade shall preside over and coordinate with EVN to prepare conditions and develop necessary regulations.
After more than 1 year of official operation, Vietnam's competitive generation market (VCGM)
Low competition due to no reserve
According to the Electricity Regulatory Authority, up to now, the basic information technology infrastructure has met the requirements for electricity market operations; the mobilization of electricity sources has increased publicity and transparency on the electricity market website. The mobilization of power generators through competitive bidding in the market is gradually creating an objective and reasonable electricity price mechanism, reflecting the supply-demand relationship (high price during peak hours, low price during off-peak hours).
It is expected that by the end of 2013, there will be more than 50 power plants directly bidding.
This has limited the price increase in the dry months, encouraged power plants to increase their generation readiness and have appropriate pricing strategies to ensure revenue. The number of plants participating in the market is increasing, the power system operates safely and continuously.
The National Electricity Dispatch Center (A0) said that in August, the total payment cost for factories participating in the electricity market was VND2,969 billion. The average market electricity price was VND512.4/kWh, an increase of 45% compared to July.
Due to the characteristics of power generation during the flood season, in August, there was only 1 hour when the market electricity price reached the ceiling price of 1,015 VND/kWh. However, the number of hours at the floor price (1 VND/kWh) also decreased to only 92 hours (in July it was 220 hours). A0 also has a plan to coordinate adjustments between factories inside and outside the market, proactively intervening when necessary to ensure the power system operates safely and transparently, making the most of the water source for power generation while still providing enough water for downstream areas.
However, according to Mr. Duong Quang Thanh, Deputy General Director of Vietnam Electricity Group (EVN), due to the lack of reserves in the dry season, the market does not have many options, so competition is low. Electricity prices mainly reach the ceiling in the dry season (from February to May 2013). In the rainy season, over 50% of the hours must offer prices lower than 500 VND/kWh.
In addition, there is currently no mechanism for ancillary services, so it does not encourage participating units. Up to now, power plants directly bidding prices only account for 37.8% of the installed capacity of the entire system. The bidding and payment support software has not been updated synchronously between the operating unit and the market participants, making the payment process take a long time to compare results.
The forecasted data on reservoir hydrology is not consistent with reality, making it difficult to calculate the bidding price. Hydropower plants that require water discharge to serve downstream areas find it difficult to balance the task of supplying water and participating in the competitive electricity market.
In particular, due to the lack of power sources in the South and the limited transmission of electricity from the North to the South, some Southern power plants have taken advantage of regional advantages to offer high prices, leading to unreasonably high profits. Moreover, when problems arise, legal procedures and regulations have not been reviewed, supplemented, or amended by competent authorities in a timely manner, leading to slow resolution of problems.
Prepare technical and commercial conditions
According to EVN forecast, the Southern region will have a serious power shortage in the last months of 2013 and 2014. This will make the electricity market operate more difficult, the possibility of having to intervene in the electricity market will be higher, and the number of hours the electricity market will reach the ceiling price will be higher.
In order for VCGM to continue operating at its highest efficiency, in Notice No. 344/TB-VPCP dated September 10, 2013 on reviewing the implementation of VCGM, Deputy Prime Minister Hoang Trung Hai directed the Ministry of Industry and Trade to preside over and coordinate with EVN to prepare conditions and develop necessary regulations to gradually pilot and form a competitive wholesale electricity market.
Take the lead in finding funding sources to hire qualified and experienced consulting units to develop technical and economic indicators for generators and power plants participating in the market, on that basis, develop production plans, manage costs and operate the electricity market. Review and improve coordination regulations and payment procedures, shorten the official payment time and settle electricity bills on the market.
Amending and supplementing Circular 41/2010/TT-BCT and other legal documents suitable to the reality as a basis for negotiating electricity prices and signing electricity purchase contracts, ensuring investors have reasonable profits. Developing training programs on incident handling and solutions for market participants.
EVN has the responsibility to continue preparing technical and commercial conditions to soon bring dependent accounting power plants, including multi-purpose plants, to participate in VCGM. Strengthen training and improve the quality of human resources for units participating in the electricity market./.
According to Industry and Trade Newspaper - HV
