1 YEAR CAN BE ADJUSTABLE 4 TIMES
The new draft decision to replace Decision 24/2027 of the Prime Minister on the mechanism for adjusting average retail electricity prices, recently drafted by the Ministry of Industry and Trade, has many new points. In particular, the draft proposes that the authority to adjust electricity prices of Vietnam Electricity Group (EVN) is expanded to 5%, with a cycle of 3 months/time (the current regulation is 6 months/time). That is, there will be 4 changes each year and the price will be updated quarterly according to the cost of electricity generation.
In particular, EVN will also be allowed to increase electricity prices by 5% and 10% after receiving approval from the Ministry of Industry and Trade and the Prime Minister. In Decision 24, EVN is only allowed to increase prices by 3-5%. In case the average electricity price needs to be adjusted to increase by 10% or more compared to the current level, affecting the macro economy, the Ministry of Industry and Trade will preside over, inspect and review to collect opinions from relevant ministries and branches...
According to the new regulations in the draft, the average electricity price can be adjusted quarterly.
Economist, Associate Professor, Dr. Ngo Tri Long, former Director of the Institute for Price Research (Ministry of Finance), said that the draft has expanded EVN's authority considerably, with the right to increase prices at a higher level and reduce the time for price adjustment from 6 months to 3 months. This needs to be carefully considered by a monopoly business like electricity, to avoid continuous adjustments.
"Electricity prices need to be monitored by an independent agency and meet all regulatory requirements before they can be adjusted. If businesses just report an increase in production input costs of 3% or 5%, it is not okay. In addition, EVN is the unit that is producing and trading electricity; so if we give businesses the right to decide on electricity prices, it will lead to a situation of "both playing football and blowing the whistle". Therefore, in this context, the State still has to set prices or set ceiling prices but according to market mechanisms", Associate Professor, Dr. Ngo Tri Long emphasized.
According to price expert Nguyen Tien Thoa, Chairman of the Vietnam Valuation Association, it is time to use "market principles" to calculate electricity prices. The regulation of adjusting prices every 3 months is not new, it was proposed in 2011. However, time is not the deciding factor in whether prices increase or decrease, but input factors.
"In reality, the regulation of reviewing and adjusting prices every 6 months has not been implemented, now saying 3 months, I'm afraid it will be difficult to implement. It can be understood as a move to review electricity production costs every 3 months," Mr. Thoa worried and commented: It is not natural that the draft "drags" other ministries and branches into checking and reviewing the prices proposed by EVN. Because the review is quarterly, any fluctuations must be calculated in the context of economic difficulties. If electricity prices increase 4 times each year, the economy will certainly find it difficult to withstand. "In addition, the exchange rate difference needs to be re-evaluated and calculated annually, but avoid causing shock to commodity prices, affecting inflation," Mr. Thoa recommended.
TOWARDS A COMPETITIVE ELECTRICITY MARKET
From there, expert Nguyen Tien Thoa emphasized that a competitive retail market is needed so that electricity prices can fluctuate flexibly according to market signals. Current electricity prices do not lack management mechanisms, just follow the regulations correctly, the electricity industry should not be struggling with losses on losses.
"Why do I emphasize the element of reviewing, calculating correctly, and calculating early enough? Because in history, when hydropower is exhausted, we have to use oil to generate electricity. Meanwhile, if calculated correctly, when using oil to produce electricity, the cost of electricity can exceed 5,000 VND/kWh; coal-fired electricity is about 2,500 VND/kWh... We cannot maintain a subsidized electricity price. In reality, unreasonable electricity prices have caused the electricity industry to have no resources to invest and develop, and have not attracted domestic and foreign investors to invest in this industry," said Mr. Thoa.
Meanwhile, the Ministry of Industry and Trade's viewpoint when submitting this draft is that electricity prices should be adjusted, avoiding jerkiness, minimizing the impact on the macro economy and electricity users by shortening the price adjustment cycle. However, the proposal to adjust prices four times a year, according to experts, is likely to be "jerky", affecting production and business enterprises.
Associate Professor, Dr. Dinh Trong Thinh, financial economist, analyzed: Production and business plans and selling prices of enterprises are built from the end of the previous year, and can only be renegotiated 1-2 times a year at most. If electricity prices keep changing continuously, it will be difficult for enterprises to calculate production.
"For a long time, we have been talking about a competitive electricity market, instead of the State regulating retail prices as it is now. In which, retailers and customers can negotiate according to contracts. For example, with rooftop solar power, many recommendations for buying and selling electricity between manufacturers and demand units have not been implemented yet; while that is the best solution to reduce the load on transmission lines and reduce the pressure of power shortages. Therefore, the problem is not how many percentage points the adjustment level is, but the important thing is to build a competitive electricity market, which cannot be delayed any longer," Mr. Thinh said, emphasizing: "When there is a competitive retail electricity market, EVN will no longer have a monopoly on electricity retail, people will be able to buy electricity from many suppliers at negotiated prices. Electricity retailers will also have to balance and compete on price and service quality to attract customers."
Proposal to import 250 MW of wind power from Laos
Faced with the risk of power shortages in the North by 2025 and the following years, the Ministry of Industry and Trade has just submitted to the Prime Minister an assessment of importing electricity from the Truong Son wind power project (Laos) with a capacity of 250 MW.
According to EVN, the total power capacity approved for import in Laos by 2025 is about 1,977 MW, lower than the scale of 3,000 MW according to the signed agreement. The import and connection of 220 kV lines is also considered by the Ministry of Industry and Trade to be in line with Power Plan 8.
According to the Plan, the total capacity of electricity imports from Laos could reach 5,000 - 8,000 MW by 2030, increasing to 11,000 MW by 2050.
In addition to the Truong Son project, EVN recently announced that it has received proposals from 7 Lao wind power projects, with a total capacity of nearly 4,150 MW, wanting to sell electricity to Vietnam. Of these, the capacity that Lao investors propose to sell before 2025 is more than 682 MW, the rest is for after this period.
Source link
Comment (0)