Speaking at the seminar, Nam said, “EVN has been entrusted by the Party, the government, and the state with multiple tasks and objectives that extend to larger socioeconomic goals while ensuring adequate electricity supply for the country.”
Nam highlighted EVN’s efforts to supply electricity to remote mountainous regions and islands, emphasising its pivotal role in ensuring energy accessibility in even the most isolated areas.
However, achieving these objectives has come with complications. Investment in electricity supply to remote areas can escalate costs up to VND 7,000/KWh, while the company is constrained to selling at VND 1,900/KWh.
"This discrepancy is reflective of the challenges EVN currently faces," said Nam.
The selling price being considerably lower than the purchase price aligns with mandates from the Party and the state, as affordable energy supply remains a top priority.
2022 spelled myriad challenges for EVN, influenced by global political instability, notably the Russia-Ukraine conflict, causing a spike in the prices of commodities essential for electricity production such as oil, coal, and gas.
There were instances where coal prices surged five-fold, reaching $400/tonne. The amplified costs put pressure on production expenses for EVN, even as prices began to cool off in 2023 yet remained quite high.
“The 3 per cent increase in electricity prices over the last four years has only partially mitigated the challenges,” Nam said.
Dr. Nguyen Duc Kien, former head of the Economic Advisory Group to Prime Minister, added a nuanced perspective, illustrating how EVN’s purchase and selling prices are trapped between market rates and government stipulations.
"If one were to include inflation over the past four years, would a 3 per cent increase adequate to offset inflation?” asked Kien, before elaborating on the additional risks EVN has had to contend with, such as exchange rate discrepancies, escalating input material costs, and the role the company played during the pandemic as it provided support for household electricity costs to the tune of more than VND16 trillion ($678 million).
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