Establishment of the Electricity Regulation Agency is considered as beginning of the formation of a competitive market for this commodity in Vietnam. In the future, this market will lure more investments and help develop more plants and the transmission network. Therefore, consumers will opt to buy electricity from suppliers with low prices.
Competition starts in generation market
Ca Mau Electricity Plant 1, which is included in the Ca Mau Gas – Electricity – Fertilizer Complex project, has had equipments for single cycle installed. As expected, the single cycle will come into operation in March 2007.
Meanwhile, Ca Mau Electricity Plant 2, which is hoped to begin operating in the first quarter next year, is under construction. They are two projects of the national petroleum group. In parallel with constructing the two plants, the group is also organizing training courses for operators at the two generation plants namely Phu My and Ba Ria. It is one of the largest independent power producers (IPP) in Vietnam.
By the end of last year, there had been 17 independent power plants with a combined capacity of 210MW connected to the national transmission network. Many other IPP projects will be connected soon.
Statistics show 40 plants of this kind are now under construction, other 78 has been approved by competent agencies while many others has been submitted for permission.
Among those, the national petroleum groups have a combined capacity of 1,950MW and the national coal group is able to generate 1,400MW. Other investors like Song Da Corporation and some foreign firms are establishing their hydro and thermal power plants.
According to the EVN, hydro power plants of independent investors will produce as much as 3,150MW in the next 5 years. As expected, by the year of 2010, the power industry will need an investment of $3.83 billion per annum. The EVN will be able to inject 50% of this amount and the other 50% will be mobilized from other investors.
Power charges decided by Government
According to an established roadmap, competition levels for the power market of Vietnam will be completed by the year of 2022. Minister of Industry Bui Xuan Khu said the Government sets power charges so the EVN is just be responsible for the transmission network. The EVN is a profit firm so it needs to negotiate prices of electricity it buys from independent sources so that profitability is ensured.
Investment in power generation is the easiest so investors do this first, starting the first level of a competitive market for power. Under the current regulations, IPPs applying for licence for constructing generation plants have to prove that their projects match the approved national power planning, sign a long-term power sale contract with the EVN and build standard plants.
Firms to be facilitated
The Electricity Regulation Agency will act as a mediator in consultancy, power price negotiation, licencing and supervision on market standardization in generation, transmission, distribution, wholesales, retail, export and import of power in order to facilitate investment from a large number of companies. It will also connect transmission networks and boost cooperation in this field between countries in the Mekong sub-region. Vneconomy
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