A. ELECTRICITY REMOVED FROM LIST OF GOODS SUBJECT TO PRICE STABILIZATION
Under the Law on Prices, electricity is on a list of goods subject to price stabilization. Under the Law on Prices, the Government is authorized to apply measures which limit the increase of electricity price whenever there are irregular changes in the electricity price or there is a large swing in the general pricing level.
On June 19, 2023 the National Assembly passed the amended Law On Prices whereby electricity is removed from the list of goods subject to price stabilization. This change is consistent with the general policy set out in the new National Master Plan for Power Development (PDP8). Under PDP8, the electricity price must (i) ensure full cost recovery, reasonable profit, (ii) attract investment in electricity development, (iii) encourage competition in the stages of generation, transmission, distribution, retail, electricity use, and waste prevention.
The amended Law on Prices will permit EVN to increase its selling price in order to recover its costs if there is a material variation in the main input factors (eg, fuel costs, exchange rates, etc.).
B. PROPOSAL TO DEVELOP AN OFFSHORE WIND PROJECT IN CAN GIO DISTRICT
Ho Chi Minh City's power needs are supplied by power plants in Dong Nai and Baria-Vung Tau provinces. To secure HCM City's power needs and economic growth, the Services of Industry and Trade of HCM City has proposed to develop an offshore wind power project (with a capacity of 6,000MW) in Can Gio District, HCM City. The output of the project would be dedicated to the needs of HCM City.
The People's Committee of HCM City is collecting opinions from stakeholders before submitting an official request to the Prime Minister to include this project in the National Master Plan for Power Development (PDP8).
C. VICE PRIME MINISTER'S INSTRUCTIONS TO DEVELOP ROOFTOP SOLAR SYSTEMS
In response to the electricity shortage in the North, a meeting among MOIT, EVN, MOF, the State Bank of Vietnam and other governmental bodies and entities was convened. On June 12, 2023 the Vice Prime Minister issued Notice no. 219/TB-VPCP ("Notice 219") by which the Vice Prime Minister assigned the MOIT to work with the MOF, EVN, and other state bodies and entities to study and recommend appropriate mechanisms, incentives, and policies to develop rooftop solar power projects ("RSPP") in the North for users' own consumption. Notice 219 further provides that existing working policies continue to apply, but that mechanisms should be considered to simplify licensing procedures for these RSPPs.
EVN is working on that implementing plan and EVN provides a number of suggestions (including exemption of electricity generation licenses and exemption of business licenses for RSPPs, tax incentives, favorable loans, etc.)
D. TRANSFER OF THE NATIONAL LOAD DISPATCH CENTER TO MOIT
The National Load Dispatch Center ("NLDC") which is known as "A0", is a system operator and a market operator for the whole power industry. NLDC's functions grant it a powerful right to buy electricity from or limit the production volume of certain power plants. NLDC is also a part of EVN. On June 14, 2023 the Ministry of Trade ("MOIT") submitted letter no. 3711/TTr-BCT ("Letter 3711") to the Prime Minister, proposing the restructure of NLDC. The MOIT proposes to transfer NLDC to the MOIT. After the transfer, NLDC will be either a non-profit organization or a state-owned enterprise under MOIT's control. The exact form is not yet determined.
The reason behind the proposal is that NLDC's independence is essential for effective competition and to attract private sector investment in the power sector. If MOIT's proposal is accepted, NLDC will separate from EVN, and will become an independent operator. It remains unclear whether NLDC will be operated in the form of a non-profit organization (Option 1) or in the form of a single-member LLC (Option 2). If Option 2 is accepted, NLDC would charge operating costs to power generators and/or to EVN in order to recover its operating expenses and costs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
