Electricity Law: Attracting all economic sectors to invest in power source projects

The Electricity Law encourages all economic sectors to participate in investing in power source and grid projects according to the electricity development plan and the power supply network development plan in the provincial planning...

Panorama of Ca Mau Gas - Electricity - Fertilizer Industrial Park. (Photo: PV/Vietnam+)

The 8th session of the 15th National Assembly passed the Electricity Law (amended). This is an important law project, having a great impact on the economy, ensuring the country's growth and development goals as well as national energy security in the short and long term.

Covers major policies

The Electricity Law 2024 takes effect from February 1, 2025, consisting of 9 Chapters and 81 Articles, fully implementing and institutionalizing the spirit of Resolution No. 55-NQ/TW dated February 11, 2020 of the Politburo on the orientation of Vietnam's national energy development strategy to 2030, with a vision to 2045.

In Article 5. State policies on electricity development, Chapter I of the Electricity Law (amended) stipulates that the State promulgates policies on development and investment in the construction of the electricity industry to ensure the requirements of being an important infrastructure industry to serve socio-economic development and people's lives.

The State has a monopoly in the following activities for the purpose of ensuring national energy security: Dispatching the national power system; investing in the construction and operation of nuclear power plant projects, multi-purpose strategic hydropower plants, important transmission grids from 220 kV voltage level and above according to the list decided by the Prime Minister; operating the transmission grid, except for the transmission grid invested in and built by non-state economic sectors.

The policy on electricity development in rural areas, ethnic minority areas, mountainous areas, border areas, islands and areas with particularly difficult socio-economic conditions includes: Prioritizing the state budget, combining the mobilization of domestic and foreign resources for investment in developing power sources and power grids to ensure safe, regular and reliable power supply for households and serve socio-economic development, national defense and security in the locality, at the same time, investment incentives, finance and other incentives and support for domestic and foreign organizations and individuals to build power sources, power grids, and provide electricity to households in a sustainable and effective manner.

The Electricity Law 2024 also clearly states that all economic sectors are encouraged to participate in investing in the construction of power source projects and power grids according to the power development plan, the power supply network development plan in the provincial planning, the plan to implement the power development plan, power generation, power distribution, electricity wholesale, and electricity retail activities; non-state economic sectors are allowed to operate the power grids they have invested in and built according to the provisions of law.

Hoa Binh Hydropower Plant. (Photo: PV/Vietnam+)

Power projects using official development assistance capital, preferential loans from foreign sponsors of enterprises in which the State holds 100% of the charter capital or enterprises in which this enterprise holds 100% of the charter capital as the investor and are on the State's priority investment list are allowed to re-borrow capital and the re-lending agency does not bear credit risks according to the provisions of the Law on Public Debt Management.

In addition, there is a mechanism for developing electricity projects suitable to the level of the competitive electricity market on the basis of ensuring national energy security and national financial security, ensuring the interests of the State and the People, and stabilizing the macro economy in each period, including: long-term minimum contract electricity output and application period, principles for calculating electricity prices, ensuring investment project implementation, and policy duration for each case.

Encourage power plants using fossil fuels to switch to low-emission fuel sources, install carbon capture equipment and systems to reduce emissions into the environment, ensure the interests of the State, and the legitimate rights and interests of businesses and workers; develop coal-fired thermal power at a reasonable level, prioritizing large-capacity, high-efficiency units using advanced, modern technology; ensure compliance with environmental protection laws.

Regarding gas-fired thermal power development policy: Prioritize the development of gas-fired thermal power using domestic gas sources, rapidly develop gas-fired thermal power using liquefied natural gas, gradually making gas-fired electricity an important source of electricity supply, supporting the regulation of the power system; have a mechanism to mobilize maximum domestic natural gas-fired thermal power projects according to gas supply capacity and fuel constraints to ensure the harmony of the overall interests of the country.

In addition, there is a mechanism to develop thermal power plants using liquefied natural gas as prescribed in Clause 6 of this Article; priority is given to developing power projects associated with the shared use of liquefied natural gas import port infrastructure and gas pipelines to reduce electricity production costs.

There is a breakthrough mechanism for offshore wind power development.

Regarding the policy of developing renewable energy and new energy, the Electricity Law clearly states that development must be consistent with the ability to ensure the safety of the power system with reasonable electricity costs, in sync with the development of the power grid and electricity development planning, consistent with the level of technology and human resources, meeting Vietnam's emission reduction goals in each period;

There are incentive and support mechanisms for each type of power source, including small hydropower projects identified according to the provisions of law, in accordance with the requirements of socio-economic development in each period; there are incentive and support policies and breakthrough mechanisms for offshore wind power development; encourage investment in projects participating in the competitive electricity market.

Notably, regarding nuclear power development policy, nuclear power development planning must be closely linked, synchronous, and consistent with electricity development planning to ensure the goal of electricity supply security; investment in construction, operation, termination of operations, and safety assurance of nuclear power plants must comply with the provisions of the Law on Atomic Energy and other relevant legal provisions.

National Assembly delegate Dang Bich Ngoc, Hoa Binh delegation, said that the Electricity Law (amended) this time will have a profound impact on people's lives and business production activities of enterprises, because electricity is an important resource serving all economic and social fields.

In particular, encouraging businesses to invest in renewable energy projects will help businesses reduce their dependence on the national grid and cut long-term electricity costs. This will also help businesses minimize negative impacts on the environment and increase sustainability.

Petrovietnam is ready with resources to develop offshore wind power projects in Vietnam. (Photo: PV/Vietnam+)

Regarding electricity price and electricity service price policies, ensure that they reflect reasonable and valid electricity production and business costs of electricity units; create conditions for economic sectors to invest in electricity development with reasonable profits, save energy resources, use renewable energy and new energy in electricity activities, contributing to promoting socio-economic development, especially in rural areas, ethnic minority areas, mountainous areas, border areas, islands and areas with particularly difficult socio-economic conditions.

Electricity prices are implemented according to market mechanisms with price regulation by the State in accordance with the level of competitive electricity market; electricity prices ensure encouragement of efficient and economical use of electricity.

Implement a reasonable and gradually decreasing retail electricity price structure, moving towards eliminating cross-subsidy of electricity prices between customer groups that do not participate in the competitive retail electricity market when they are not eligible to participate or do not choose to participate in buying and selling electricity in the competitive retail electricity market.

Gradually reduce and eventually eliminate cross-subsidy of electricity prices between customer groups, regions and areas in accordance with the level of competitive electricity market; ensure the right to self-determination of electricity purchase price and electricity sale price not exceeding the electricity price frame and retail electricity price structure prescribed by the State.

Ensure the legitimate rights and interests of power units and electricity customers. Electricity prices are guaranteed to be public, transparent, equal, and non-discriminatory among power units; develop appropriate electricity price mechanisms for specific customer groups according to the State's policies in accordance with the socio-economic development situation in each period.

The state budget supports electricity bills for living purposes for poor households and social policy households according to criteria and mechanisms prescribed by the Prime Minister in accordance with the socio-economic situation in each period; the Government issues a plan to support electricity bill reduction in case of incidents and disasters according to the provisions of the Law on Civil Defense to stabilize socio-economic development./.

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