Vietnam has operated a competitive electricity market with 3 levels, in which the Competitive Generation Market has been operating since July 1, 2012. Thus, according to the market principle, EVN will buy electricity sources with low prices and then high prices, so all sources from hydropower, coal, gas, oil, and renewable energy are sold to EVN.
Buy at market price, sell at regulated price
“If EVN is not the sole buyer, customers will have to pay high electricity prices from the production unit. For example, we operate the competitive retail market according to design, at which time power plants are selected to sell to direct customers, so if customers buy electricity from a plant that produces oil or gas, customers have to pay themselves, no one else buys it for them. That is the principle of the competitive retail market. As for EVN, it is still the sole buyer, so all the high purchase costs are borne by EVN while the electricity selling price is regulated by the State,” said Deputy Minister of Industry and Trade Dang Hoang An.
Deputy Minister of Industry and Trade Dang Hoang An answered the press about EVN's loss.
According to Mr. An, EVN buys electricity at market prices (high prices) and sells electricity at government-regulated prices (lower than the purchase price in the competitive electricity market). Not to mention that at this time, hydropower (cheap prices) has no water, so electricity generation output is very low. Currently, the power system is mobilizing electricity sources with high production costs to serve the needs of society.
Mr. An also informed that when operating a competitive retail market, power plants will be selected to sell to direct customers. Thus, in the case of customers buying electricity from oil and gas plants, they will have to pay for it themselves. That is the principle of a competitive retail market.
Regarding the information that EVN may propose to increase electricity prices when the input source is mobilized at a high price, Mr. An said that EVN's task is to ensure electricity supply. Therefore, this group does not operate for economic efficiency by cutting off electricity, even though the cost of purchasing electricity in the dry season increases.
"No matter how high the production cost is, we must mobilize all resources to ensure electricity supply," Mr. An affirmed, but said he did not have clear information about EVN wanting to continue increasing electricity prices.
National Assembly delegates request clarification of 26,000 billion VND loss
Previously, during the National Assembly's discussion session on the socio-economic situation, delegate Ta Thi Yen (Phu Yen) raised the issue of EVN's business performance when it reported a loss of VND 26,000 billion in 2022.
According to Ms. Yen, from 2010 to now, EVN has adjusted the electricity price up 8 times, the average price from 1,058 VND/kWh to 1,864.44 VND/kWh (in 2019) and continues to report losses and request to adjust the electricity price up.
Reporters asked questions at the press conference.
In particular, in the same ecosystem, the parent company reported losses while its subsidiaries still announced high profits in 2022. For example, two enterprises under EVN, Power Generation Corporation 3 and Power Generation Corporation 2, both recorded after-tax profits in 2022 of VND 2,550 billion and VND 3,668 billion...
"So what is the main cause of this loss? If it is said that it is due to high input prices, including fuel, interest or exchange rate losses, then the subsidiaries are also facing this difficulty. Why are the results different? Is this a problem of management capacity?", Ms. Yen asked.
Regarding the recent opinion of the National Assembly deputies on the need to clarify EVN's losses (announced at about 26 trillion VND in 2022), Mr. Dang Hoang An said that there is a paradox that EVN only accounts for about 38.4% of the total capacity of the entire power system in Vietnam, but EVN has to bear all the losses. Meanwhile, power generation companies, including EVN's member companies, power generation corporations, and joint stock companies of many enterprises are still profitable.
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