The Committee is concerned, the Ministry still wants to pass it in 1 session.

The Ministry of Industry and Trade has just reported on the acceptance and explanation of the Review Report of the Committee on Science, Technology and Environment on the draft Law on Electricity (amended).

According to the National Assembly's Committee on Science, Technology and Environment, the draft Law on Electricity (amended) needs to be carefully considered, studied, and evaluated cautiously, objectively, and comprehensively. The Committee proposed to pass the law in two sessions (submit to the National Assembly for comments at the ongoing 8th session and pass it at the next session).

In case the scope of amendment only focuses on "urgent, mature, and clear issues", it is not necessary to comprehensively amend the law; at the same time, the draft law is well prepared by the Government, explained, and fully absorbs the opinions of National Assembly deputies, the agency in charge of the examination, and the National Assembly agencies, and the discussion process at the National Assembly reaches high consensus, the Committee shall report to the National Assembly Standing Committee for consideration and coordination with the Government to submit to the National Assembly for approval at the 8th Session according to the procedure at a session.

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Large capital is needed for power source development in the coming period. Photo: Hoang Ha

In its explanatory report, the Ministry of Industry and Trade affirmed that the draft law has focused on revising mature and clear contents and has focused on supplementing missing regulations to resolve urgent issues.

According to the Ministry of Industry and Trade, the proposed contents in the Draft Law on Electricity (amended) have been thoroughly assessed for impact, including the contents on renewable energy and new energy that have been tested in practice for many years.

Particularly for new contents such as offshore wind power development and nuclear power, the development of principles in the law and the assignment of the development of detailed regulations are appropriate for the current stage, to have a basis for step-by-step implementation and to have assessments and draw lessons to complete the provisions of the Law in the next stages.

According to the master plan 8 and calculations of the Ministry of Industry and Trade, NSMO, Vietnam Electricity Group (EVN) expects that by 2030, the system's peak capacity will increase by 40,000 MW, reaching 90,000 MW compared to the end of 2024 (about 50,000 MW). Of which, the North needs 20,000 MW, the South 18,000 MW, and the Central 2,000 MW.

The Ministry of Industry and Trade assessed that this is a very large amount of capacity, and the construction time of power projects is long, usually 3-5 years. Therefore, a new law needs to be issued as soon as possible to remove the institutionalization problem.

This contributes to creating favorable conditions for planning and investment to soon bring power sources into the power system; creating conditions for socialization and mobilizing social resources to ensure energy security, with an estimated need for about 70-80 billion USD for power sources; supplementing institutions and having mechanisms to mobilize renewable energy sources, new energy, and nuclear energy.

"With the above urgent grounds, the Government has proposed that the National Assembly approve one session," the Ministry of Industry and Trade explained.

Clarification on electricity output consumption

The Committee on Science, Technology and Environment finds that the provision in Point c, Clause 8, Article 5 regarding the buyer's commitment to a minimum, long-term contracted electricity output is essentially a commitment to consume a minimum electricity output.

The Committee is concerned that such a provision is inconsistent with the principles of competitive market operation stipulated in Clause 1, Article 60 of the draft Law on “Ensuring publicity, transparency, equality, fair competition, and non-discrimination among participants in the electricity market” and the guiding viewpoint of Resolution No. 55-NQ/TW “resolutely eliminating all manifestations of subsidies, monopoly, unequal competition, and lack of transparency in the energy sector”.

In addition, when participating in the electricity market, the plant has the right to bid competitively with other power plants to mobilize and generate high output. That ensures the optimization of low-cost energy sources such as hydropower in operating the national power system.

On the other hand, if the electricity output is contracted under long-term contracts with investors of gas-fired power projects as stipulated in the draft law, the electricity buyer, such as EVN, will have to bear a huge cost, affecting the financial balance of the group, going against the trend of the competitive electricity market.

Therefore, this committee recommends studying and carefully considering the above content.

The Ministry of Industry and Trade explained that: The concept of "contracted electricity output" in the electricity market is not the (physical) guaranteed output but only the financially committed electricity output in the electricity futures contract, according to current electricity market regulations, it is still called Qc.

In the policy and context of gradually reducing coal-fired thermal power, LNG is an important base power source to regulate the system. This is the power source that ensures national energy security and is an important basis for developing renewable energy.

According to the Ministry of Industry and Trade, for power plants using liquefied natural gas, the regulation of long-term minimum contract power output commitment is a policy to ensure long-term investment, manage risks for investors, as well as help investors borrow capital, mobilize capital for construction, and be able to recover costs to repay loans invested in power projects.

In particular, liquefied natural gas power sources have higher investment costs and prices than other power sources, and cannot compete with other power sources when participating in the electricity market.

"Without a commitment to a minimum, long-term contract power output, plants cannot generate electricity and cannot recover capital. Therefore, to ensure energy security, investors require electricity buyers to commit to a minimum, long-term contract power output to calculate and determine a stable revenue stream and ensure project debt repayment," the Ministry of Industry and Trade analyzed.

According to the Ministry of Industry and Trade, nuclear power is a large source of electricity, capable of running in the background and providing stable electricity. It is also a green and sustainable source of electricity. Therefore, it is necessary to research and develop nuclear power in the future to ensure energy security and sustainable development. In order to have a basis for implementing the construction and development of nuclear power after having the policy of competent authorities, it is necessary to supplement the policy on nuclear power development in the Electricity Law (amended).