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Pilot Competitive Power Production Market Launched (13/7)
13/07/2011 - 24 Lượt xem
Addressing the ceremony, Deputy Minister of Industry and Trade Hoang Quoc Vuong said that putting the competitive electricity production market into operation was the first step on the roadmap to develop the Vietnamese electricity market. He added that Vietnam is promoting competition in the field of electricity production in order to encourage power plants to improve the effectiveness of production and business activities, ensure transparency and equality on the electricity market and attract both domestic and foreign investment from all economic sectors into this market.
Duong Quang Thanh, the deputy general director of the EVN Group, said, "In 2005, EVN began to promote competition among the power plants which were its member units. That was a good preparation in terms of human resources as well as experience for the competitive electricity production market to commence pilot operations on July 1." Based on the experience of other countries and specific conditions of the Vietnamese electricity sector, the Ministry of Industry and Trade has proposed mechanisms under which the competitive electricity production market will operate.
Specifically, the competitive electricity market will operate according to the model of a concentrated electricity market where prices are offered depending on production costs in order to ensure a stable supply of power at stable prices, increase market transparency and attract investment into the electricity market. In the competitive electricity production market, power plants will have the right to sell electricity and they will be mobilized to produce electricity depending on the price they offer (the power plant which offers the lowest price will be mobilized first and the whole process will go on that way until total demand is met).
In the competitive electricity production market, the market price depends on prices offered by power plants. In the current period when this market is undergoing pilot operations, to ensure the achievement of economic development goals as well as social security, the State will continue to manage electricity prices and consumers have to pay according to the State-specified price list.
Many solutions for market transparency
In the current period, among 73 existing power plants with a capacity of more than 30MW, 48 plants will offer prices directly on the market (this number is projected to increase to 55 plants in late 2011). The combined installed capacity of power plants which are to offer prices directly on the market account for about 61 percent of the total capacity of the entire power system of the country.
Companies which are EVN members or the ones which took part in the competitive electricity market in 2005 will find it easier to join the market in the current period. Nguyen Khac Son, the general director of the Pha Lai Thermoelectric Power Joint Stock Company (PPC), said, "PPC has advantages when joining the competitive electricity production market because it has been operational for a long time and used to be a member of EVN. Both PPC and EVN know very well about the cost of electricity production and this was a favorable condition for the two sides to negotiate electricity prices." However, power companies which have been operational for a short time or have small capacity have met difficulties. Pham Hong Khanh, the deputy general director of the Vinacomin Electricity Corporation, said, "The biggest difficulty facing thermoelectric plants of Vinacomin (Vietnam National Coal and Mineral Industries Group) is that they have been operational for a maximum seven years, some of them commenced operations in May 2011. Those plants have total capacity of only 1,100MW and little experience."
Many people appear concerned about the transparency of the electricity market as EVN is holding a monopoly in electricity production, transmission and distribution.
Power plants with multi-goal strategies such as Son La, Hoa Binh and Ialy will not offer prices on the market but continue to be managed by the State so as to simultaneously produce electricity and implement socioeconomic tasks such as flood prevention and irrigation. Other power plants which belong to EVN will be reorganized to operate as independent electricity corporations in order to increase their initiative and competitiveness and ensure equality and transparency on the competitive electricity production market.
Deputy Minister Hoang Quoc Vuong affirmed that the electricity market must be developed cautiously and gradually. Pilot operations of the competitive electricity production market allow electricity authorities to become familiarized with the mechanisms under which the market operates and assess its impacts. Based on the results of pilot operations, necessary amendments and supplements will be made to legal documents as well as the technical infrastructure system in order to develop a perfect electricity market. That step is essential to minimize the risks which can arise when developing the competitive electricity market.
As planned, the competitive electricity production market will commence official operations in early 2012./.
Source: VEN.
Source: VEN.
