Expected Electricity Law (amended) will be passed at the 8th session

Mr. Dinh Trong Thinh - Economic expert had an interview with reporters of Industry and Trade Newspaper about this issue.

After nearly 20 years, the Electricity Law has been amended and supplemented four times, and this draft Electricity Law (amended) is expected to resolve existing problems, contribute to ensuring national energy security, develop electricity as a national technical infrastructure sector serving socio-economic development and people's lives... From a research perspective, could you please give your assessment of this issue?

The Electricity Law of 2004 has been amended and supplemented four times. After nearly 20 years of implementation, there are still some issues that need to be amended and supplemented to fully institutionalize the policies and guidelines of the Party and State.

Electricity staff check at the cutting station. Photo: PC Hung Yen

Amending the Electricity Law also contributes to ensuring national energy security, developing electricity as a national technical infrastructure sector serving socio-economic development and people's lives, developing sustainably on the basis of optimal exploitation of all resources, contributing to ensuring national defense, security and energy security, serving the cause of industrialization and modernization of the country.

And with this Draft Law on Electricity (amended), we believe that it is relatively comprehensive, consistent with the new trend of electricity production and business in the market, especially related to renewable energy, solar power development or handling the existing problems of electricity projects. These are very hot issues in recent times.

Regarding the market mechanism, the Draft Law on Electricity (amended) this time also has a direction. However, from a certain perspective, we believe that there should be more specific documents, thereby clarifying the market mechanism in electricity production and trading activities.

This Electricity Law has added regulations on the retail price structure in the direction of gradually decreasing and moving towards eliminating cross-subsidy between regions and customer groups not participating in the competitive retail electricity market. Could you please give your opinion on this?

In fact, this issue has been raised by many experts, especially the cross-subsidy between production and consumption electricity is still entangled. I think, along with cross-subsidy between regions, the cross-subsidy of production and consumption is the big problem.

As we have said many times, if we just give them a sum of money, the support will be clear. But if we put the support in the electricity price, the manufacturing enterprises will think that this is the price of electricity they buy and sell. Thus, they will not see the support of the state, of the Government for production and business in the electricity price.

In fact, it is unreasonable to set the retail price of electricity for manufacturing enterprises lower than the average retail price of electricity sold to households or even lower than the cost of electricity production. Because in a market economy, we need to follow the market mechanism, and we cannot set the retail price of electricity for manufacturing enterprises lower than the retail price of electricity for consumers, even at a loss.

On the other hand, the sale of cheap electricity makes businesses continue to use machines, equipment, and tools that consume a lot of electricity. They do not research and save energy in the production and business process. This is also a very big problem.

How important is the Draft Law on Electricity (amended) in handling existing power projects, developing solar power and wind power projects, sir?

The revised Electricity Law also addresses the issue of how to handle buying and selling, who is allowed to buy and sell, and to what extent. This is consistent with the development of renewable energy as well as wind and solar power.

Assoc. Prof. Dr. Dinh Trong Thinh

In fact, businesses now want to produce excess electricity to sell to the outside, the state must buy it all. This is also very difficult. Because electricity is different from other products. Wind power and solar power depend on the time, when there is sunshine, strong sunshine, there is surplus, while at night there is none. This is very difficult for power regulators. Because they must have a base level of electricity to ensure the maintenance of a normal power supply level. If there is excess electricity to buy more, it will only be supplemented for a period of time. So how should the purchase and sale be carried out so that businesses producing base electricity can produce continuously?

Therefore, it is reasonable to buy and sell solar power within appropriate limits. At the same time, businesses in addition to producing electricity also need to build electricity storage units to meet production requirements.

According to the draft, the Government will be the competent authority in issuing the mechanism for adjusting retail electricity prices, instead of the Prime Minister. Specifically, the Government will issue a Decree on the mechanism for adjusting retail electricity prices, which specifies the authority for each price adjustment level. The price adjustment period will also be reduced to 3 months, instead of the current 6 months. How do you evaluate this change?

The adjustment of electricity price shortened from 3 months to 6 months has also been applied in practice. In fact, recently, the Ministry of Industry and Trade and EVN have adjusted electricity prices accordingly, with the adjustment period from 5-6 months to 3 months.

In the context of a market economy, everything is transparent, what factors increase electricity prices, how much electricity prices increase, etc. From there, the authorities can completely adjust accordingly. In a market economy, the most important thing is competition. If we can create competition between power generators, the purchase and sale of electricity, then the monopoly will no longer exist. This will help the authorities easily adjust electricity prices according to the market mechanism.

The Draft Law on Electricity (amended) is expected to be passed at the 8th Session of the 15th National Assembly this time. However, there are also opinions that it needs to be certain and thorough. What is your comment on this?

The Draft Law on Electricity (amended) has been submitted for comments many times. Laws submitted for comments are usually passed in one session, not two sessions.

Therefore, the preparation stage for drafting the Law is the most important. After collecting opinions from management agencies, experts, businesses, etc., the Law drafting agency will submit it to the Government, and the Government will submit it to the National Assembly for consideration and approval at the Session.

It is expected that the 8th session of the 15th National Assembly will pass 15 laws and give initial comments on 13 laws. Many draft laws such as the Law on Cultural Heritage, the Law on Advertising, the Law on Electricity, with many new contents, are also of interest to National Assembly Deputies.

It is extremely important that National Assembly deputies exercise the highest responsibility in studying records and documents, giving opinions and considering and passing draft laws, including the Electricity Law (amended), to ensure the promulgation of good laws that meet the increasingly high requirements of practice.

It can be seen that the draft Law on Electricity (amended) is not only related to the electricity sector but also to production and business, social life, etc. For example, in production, the draft Law on Electricity (amended) will have immediate impacts such as: Technological innovation, improving production efficiency to green the economy, etc. Therefore, the draft Law on Electricity (amended) will be the basis for other Laws to be implemented better, making the goals of the economy implemented synchronously.

Everything has two sides. Like the story of increasing retail electricity prices for manufacturing enterprises, this will impact and make manufacturing enterprises face difficulties. But along with that difficulty, there is a very positive factor that forces enterprises to save electricity. Enterprises must change production technology, save energy. This will have a positive impact on greening production, improving labor productivity.

Accordingly, looking at it in a balanced way, if something is more beneficial, we will follow it. And we are following the market mechanism, therefore, we hope that market factors will decide the electricity production and business sector.

The amendment of the Electricity Law will not only benefit the electricity sector but also have a positive impact on the socio-economy in general. Providing enough electricity for economic development is a prerequisite for Vietnam to move towards the goal of sustainable development. In addition, policies to encourage renewable energy will create many new jobs in this field.

According to the assessment of the National Assembly Deputies, the drafting agency has prepared a detailed dossier, the content of which closely follows the 6 groups of policies that have been considered and approved in the law and ordinance building program. This is a large law project, with 130 Articles. However, to consider and approve it according to the one-session process, the drafting agency needs to focus highly and urgently complete the ripe and clear issues for consideration; at the same time, continue to research, amend and supplement a number of articles related to the state's policy on energy development, the scope of adjustment, and investment planning for power development projects.

From an economic expert's perspective, we also expect the Draft Law on Electricity (amended) to be passed at the 8th session of the 15th National Assembly.

Thank you!

Source: https://congthuong.vn/pgsts-dinh-trong-thinh-ky-vong-luat-dien-luc-sua-doi-se-duoc-thong-qua-tai-ky-hop-thu-8-355003.html