The Ministry of Industry and Trade has just sent a document to Vietnam Electricity Group (EVN) requesting the urgent development of a two-component electricity price mechanism, including capacity price and electricity price, and at the same time develop a roadmap and propose customers to apply this two-component electricity price.
Based on the proposed mechanism and selection of customer objects, the electricity company calculates and compares the application of the 2-component electricity price with the application of the electricity price according to the current electricity price list.
EVN is also required to study and evaluate the impact of implementing the average retail electricity price and the impact on electricity customer groups when applying the two-component electricity price mechanism; report the summary and propose the two-component electricity price mechanism after the calculation and comparison stage to the Ministry of Industry and Trade for study and submit to the Prime Minister for consideration and decision.
Further elaborating on this proposal, the Electricity Regulatory Authority of the Ministry of Industry and Trade said: International experience shows that most countries in the region and around the world apply two-component electricity prices. Applying two-component electricity prices will send the right signal to both electricity producers and consumers to improve economic efficiency from the reasonable allocation and use of resources.
Applying the additional capacity price component (VND/kWh or VND/kVA) will encourage customers to use electricity efficiently, contributing to improving the electricity load factor and saving electricity costs, while helping to reduce investment in power sources and expand the grid (reducing avoided costs) to meet customers' electricity needs and recover investment costs for customers who register for large capacity but use less than the registered capacity.
"Therefore, applying a two-component electricity price including capacity price and electricity price brings benefits to both customers and ensures the recovery of investment costs of the electricity industry. Based on the above viewpoint, the two-component electricity price mechanism is considered a measure to manage natural load demand," the Electricity Regulatory Authority stated its opinion.
According to the Electricity Regulatory Authority, currently, electricity corporations have applied electronic meters capable of measuring capacity and electricity for most customers using electricity for production and business purposes. The implementation of electricity prices according to capacity and electricity is necessary to ensure that electricity prices create signals that accurately and sufficiently reflect costs (in terms of capacity) to electricity customers. Accordingly, customers with the same amount of electricity used but with a low load factor must pay a higher price than customers with a high load factor.
In addition, applying electricity prices according to two components combined with current electricity price regulations will contribute to balancing the system's load chart and reducing the need to invest in power sources and grids to meet electricity usage capacity during peak hours.
The Electricity Regulatory Authority said that currently, the application of the new two-component electricity price is in the pilot research stage with the nature of calculation and application research and does not affect the electricity bill of electricity customers. Because it is in the pilot calculation stage through measurement data from electricity meters, there is no direct impact on adjusting electricity usage behavior of customers to use electricity economically and effectively.
However, according to the agency, this is a necessary pilot step to evaluate and calculate the difference in electricity bills between the current electricity price list and the two-component electricity price list to help the management agency develop a new electricity price mechanism to apply when appropriate. In addition, the calculation results will also provide information to customers so that they can consider and adjust their electricity usage behavior to be economical and efficient.
Giving a comparison between a household consuming 1kW of power in 1 hour/day (using up 24kWh in 1 day) and a household using 24kW in only 1 hour/day and also consuming 24kWh in 1 day, Associate Professor, Dr. Bui Xuan Hoi, an energy expert, assessed: If applying a single-component price like the current price list in Vietnam, these two households will pay the same bill, but in reality the cost that the electricity industry has to pay for these two households is completely different. Specifically, in the first case, the electricity industry only invests in a scale of 1kW (fixed cost) and pays operating fees for 24 hours (variable cost). As for household 2, the electricity industry must invest in a scale of up to 24kW and pay operating fees for 1 hour. Therefore, the two-component electricity price system is what most countries in the world are applying. |
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