Vietnam to open electricity wholesale market next year

An engineer operates an electricity production system at the Dong Nai Hydropower Plant in the Central Highland province of Lam Dong.-VNA/VNS Photo Ngoc Ha

Deputy Minister of Industry and Trade Hoang Quoc Vuong spoke about the development of the marketplace at a recent meeting in Hanoi.

Vuong said the development of a competitive electricity market is a long-term plan for Vietnam’s electricity sector as mandated in the 2004 Electricity Law. The details of the plan were specified in the Prime Minister’s Decision 63/QD-TTg in 2013, which laid out the conditions and structure of the new market.

The marketplace was to be developed in three distinct parts: the electricity generation market, the wholesale market and the retail market.

The generation market started in 2012, and the wholesale market is expected to open next year. The final stage will be the development of the retail market.

In the pilot period for the wholesale market, performance metrics were tracked and used to improve service.

“The test run we carried out over the past year will be the basis for assessing the viability of the market’s approved design,” Vuong told chinhphu.vn. “Participating companies and service providers have used it to gradually get acquainted with the new mechanisms.”

Vuong said the Ministry of Industry and Trade has instructed relevant agencies to focus on completing the pilot period by the end of the year so the market can open next year at the latest. The remaining time of the trial period will be used to improve information technology infrastructure and finish training companies in how the market works.

Nguyen Anh Tuan, director of the Electricity Regulatory Authority of Vietnam (ERAV), said the agency is preparing to put energy generated by the Electricity of Vietnam (EVN)’s hydroelectric plants into the market. The next step will be to allow renewable energy providers to connect the national grid.

To protect investors in renewable energy and ensure the market is operated fairly, experts say State agencies should develop regulations that support small power plants with a capacity under 30MW. This move would boost the renewable energy sector and help the long-term health of the marketplace.

Deputy Director of the National Load Dispatch Centre of Vietnam (NLDC) Vu Xuan Khu told congthuong.vn that, during the pilot period, electricity companies have improved their business practices.

According to the NLDC, the nascent market has had to overcome challenges stemming from IT infrastructure shortages and the unability to forecast hydroelectric output.

The ERAV, under the Ministry of Industry and Trade, reported that 87 power plants have entered the electricity generation market over the past five years, with a total capacity of nearly 23,000MW.

ERAV representative Le Hong Hai said the market has already increased its transparency and helped create a system that investors can trust to integrate their new power plants into the national electric grid.

However, Hai said the insufficient IT infrastructure will limit the effectiveness of the market.