Increase electricity prices to reduce losses
The Ministry of Industry and Trade has just submitted a document to the Prime Minister requesting the issuance of a Plan to implement the Power Plan 8. To meet the demand for electricity, according to the forecast of the Power Plan 8, in the period of 2023 - 2025, it is necessary to put into operation about 19,000 MW of new power sources; including coal, gas, hydropower, onshore wind power and imported electricity. However, the content of the document of the Ministry of Industry and Trade shows that the risk of delay in the progress of power projects is very high, especially with thermal power and onshore wind power. The temporary solution is to increase electricity imports from countries in the region, specifically from China and Laos.
In particular, the mechanism for developing rooftop solar power, which is considered a priority solution to ensure security of electricity supply, has not yet been established. In addition, the pilot study assigning Vietnam Electricity Group (EVN) and domestic enterprises to deploy offshore wind power has encountered many difficulties; there are legal corridors regarding national marine spatial planning and investment policies, etc.
Experts recommend that electricity price increases must be carefully considered.
JADE PEACH
Thus, although the Power Plan 8 has been in place for nearly 9 months (approved in May 2023), the progress of additional power source projects to meet demand from now until 2025 according to the draft plan for implementing the Power Plan 8 is still quite vague. In the worst case, the slow progress of power source projects will lead to power shortages, the electricity industry will have to increase the use of oil-fired electricity, increase output at coal-fired power plants, etc.
At that time, the prospect of electricity production costs continuing to increase, the electricity industry will have accumulated losses. Meanwhile, in 2023, according to EVN's report, the group lost about 17,000 billion VND (despite 2 adjustments to household electricity prices). In total, in 2022 - 2023, EVN still lost about 38,000 billion VND, not counting the exchange rate loss suspended from previous years of about 14,000 billion VND.
Also because of the loss, at a recent meeting, the Ministry of Industry and Trade proposed to increase electricity prices this year. Energy expert, Dr. Nguyen Huy Hoach (Vietnam Energy Association) said that increasing electricity prices this year is inevitable. The reason is that the double increase in electricity prices last year is not enough to compensate for the huge loss from the years before the pandemic broke out, the cost of electricity production increased too sharply due to the increase in world coal and oil prices, but electricity prices must be held back to support economic recovery.
Decision 24/2017 of the Government stipulates that electricity prices are adjusted every 6 months. Currently, EVN and the Ministry of Industry and Trade are proposing to amend and adjust electricity prices every 3 months. If following the regulations in Decision 24, electricity prices can be adjusted in May 2024, in the direction of continuing to increase. An increase of less than 3% is under the authority of EVN, less than 5% is under the authority of the Ministry of Industry and Trade, and higher is decided by the Prime Minister.
"I think the desire of the Ministry of Industry and Trade as well as the units advising the Ministry is to reform electricity prices according to the market mechanism. However, in 2024, this is difficult to do because the economy cannot withstand a sharp increase in electricity prices. Currently, the gas-fired power projects in the 8th Power Plan with a total capacity of 24,000 MW are at risk of high purchase prices equivalent to the previous FIT preferential price. Therefore, if the electricity selling price continues to be lower than the purchase price, EVN's accumulated losses will increase, and the problem of money and sustainable development of the industry will face more challenges," analyzed Dr. Nguyen Huy Hoach.
Can the increase be divided into several times during the year?
Economist, Associate Professor, Dr. Ngo Tri Long emphasized that electricity is an essential commodity and will directly affect production and consumption. It is forecasted that 2024 will not be without difficulties, so the increase in electricity prices needs to be carefully calculated and considered; carefully consider input costs for electricity production, social security issues and macro goals. The Ministry of Industry and Trade is requesting to amend Decision 24 to adjust electricity prices once every 3 months. Thus, if raw material prices fluctuate, adjustments can be made earlier so that production, business and investment in the electricity industry can stabilize sooner.
"In 2023, the electricity industry adjusted the average retail electricity price twice in May and November, but the adjustment level was not high, the total increase was 7.5%, while according to the report, an increase of 13% was enough to cover input costs. After 2 increases in electricity prices, we still see that inflation is not affected. However, it should be noted that the second increase in electricity prices fell in November 2023, so it had very little impact on the CPI in 2023. However, in the first quarter of this year, the impact will be more obvious. In the first month of the year, the CPI increased by 0.31% compared to December 2023. In the basket causing the CPI increase, the electricity price increased by 1.29% compared to the previous month," Mr. Long analyzed and suggested that to reduce shock to the economy and not affect social security, the increase in electricity prices this year, if any, should also be low.
If necessary, the price increase should be divided into two times a year, as was done last year. For example, according to the electricity industry's calculations, a 6% increase is needed, so the increase should be divided into two times and avoid increasing during hot months, when people's demand for electricity increases.
Sharing the same view, Dr. Nguyen Huy Hoach said that electricity prices should increase in the beginning of the second quarter or in the middle of the third quarter to avoid the peak hot months. "Updates to this point show that EVN is having a preventive strategy to avoid power shortages in the North during the hot season very early. Specifically, thermal power plants are increasing coal reserves, and the renovation of generators is being carried out more seriously and regularly.
Second, water in hydroelectric reservoirs has been stored since August last year, avoiding the situation where during the peak of the hot season, the water is not enough to generate electricity. Third, diesel oil is stored so that when hydroelectric power is not enough, diesel can be used to generate additional electricity immediately. I appreciate this initiative, so I hope there will be no power shortage. But to avoid power shortage, the cost of diesel to run electricity is very high. Electricity price increases should always be avoided in the months of May - July of the year," said Mr. Hoach.
| According to experts, in 2024, the power supply will still face many difficulties, the possibility of power shortages is still quite high, even though the Prime Minister has directed that there will be no shortage of electricity for daily life and production and that preventive solutions must be taken early. Up to now, there is no specific plan to implement Power Plan 8, and no projects that are prioritized for construction have been seen yet. The 500 kV line 3, which is only over 500 km long and requires an investment capital of about 23,000 billion VND, is being urged to be deployed./. |
According to thanhnien.vn
Source: https://thanhnien.vn/gia-dien-tang-the-nao-de-khong-soc-185240129214411755.htm
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