At what price is EVN buying electricity?

VietNamNet•07/05/2023

Coal-fired power is becoming more expensive.

Information from the Vietnam Electricity Group (EVN) shows that the average electricity purchase price across all power sources in the first three months of 2023 was 1,844.9 VND/kWh. This was the period when the electricity selling price remained at 1,864.44 VND/kWh. Thus, EVN's electricity purchase price was almost equal to its electricity selling price before the upward adjustment.

If other costs such as distribution, transmission, ancillary services, and dispatching are added, the purchase price of electricity will be higher than the selling price.

The chart below shows that coal-fired power plants are priced at nearly 2,000 VND/kWh. This is because coal prices remain high.

In addition, EVN also purchases electricity indirectly on the market. The specific prices shown in the chart below indicate that coal-fired electricity prices also reach over 2,100 VND/kWh.

Including wind and solar power, the detailed electricity purchase prices are as follows:

Effective May 4th, the electricity price has been adjusted upwards to 1,920.3732 VND/kWh. At a press conference that afternoon, Mr. Nguyen Xuan Nam, Deputy General Director of EVN, stated that this price increase will boost EVN's revenue for the remaining eight months by more than 8,000 billion VND, contributing to alleviating EVN's financial difficulties.

Vietnam Electricity Group (EVN) has also recently sent a document to the Ministry of Industry and Trade proposing that customers connected to the 110kV or higher voltage supply (typically manufacturing plants and industrial zones) must directly purchase electricity on the electricity market. If this mechanism is approved, EVN will no longer be the sole buyer.

These large customers will no longer need to buy electricity from EVN as they do now. They can purchase electricity at different prices throughout the day; for example, they can buy more at lower prices in the evening and less at higher prices during the day.

Still worried about electricity shortages.

In a report submitted to the Ministry of Industry and Trade, EVN warned of a critical situation regarding electricity supply.

For the month of April, although the North and Central regions were just beginning to experience hot weather, electricity production had already increased significantly. Forecasts indicate that in May, June, and July, the North will enter its peak period, and the national power system's load will continue to increase and exceed the plan set for the end of 2022.

Recently, to ensure electricity supply, the National Power System Dispatch Center (EVNNLDC) had to mobilize oil-fired power plants from April 17th, with the highest daily mobilization reaching 2,498 MW of oil-fired power, producing 14,659 million kWh (April 21st).

Meanwhile, EVN noted unfavorable hydrological conditions. Hydropower reservoirs in the northern region continue to experience low water inflow, with water flow in the first four months of the year at approximately 70-90% of the multi-year average. Some reservoirs in the central and southern regions also have low water inflow, such as Dai Ninh, Tri An, Dak R'Tih, and Song Con 2...

As of April 24th, many hydropower reservoirs in the system have low water levels, posing a risk to electricity supply security and meeting the needs of the population for the remainder of the 2023 dry season. Notably, 9 reservoirs have reached or are below the dead water level (total capacity of approximately 3,000 MW); 18 out of 47 large hydropower reservoirs have remaining capacity below 20%...

In 2022, hydropower, with its abundant water resources and low electricity generation costs, helped alleviate EVN's financial burden amidst the high cost of coal-fired power. However, if water levels in hydropower reservoirs do not improve in the coming period, the electricity supply situation will become very strained.

According to the National Center for Hydro-Meteorological Forecasting, the El Nino phenomenon will occur in the last months of 2023, causing temperatures to rise and rainfall to decrease compared to the multi-year average. This will lead to a continued downward trend in water inflow into reservoirs during the last months of the year.

EVN also anticipates extreme situations that could affect electricity supply capacity. These include a 15% increase in peak power demand in the North compared to the same period in 2022 (during prolonged hot weather); generator unit failures or delays in repairing and commissioning new power sources; and a significant drop in water levels at major hydropower reservoirs.

"At that time, the northern power system will face a situation where it cannot meet peak load in May and June, with the largest power deficit estimated at around 1,600-4,900 MW," EVN warned, adding that it must consider electricity saving solutions, and even power cuts in some extreme situations.

EVN does not want to be the sole buyer in the electricity market . The Vietnam Electricity Group (EVN) proposes that customers connecting to the grid at voltages of 110kV or higher must directly purchase electricity from the electricity market. This would mean EVN would no longer be the sole buyer in the electricity market.

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