EVN pushes for direct consumer involvement in VREM

Electricity of Vietnam (EVN) suggested in the document sent to the Ministry of Industry and Trade (MoIT) last week that consumers requiring a voltage of 110 kV or higher must purchase electricity directly from the electricity market.

The proposal will allow consumers to participate in VREM instead of being required to purchase electricity at the retail tariff set by the government in July 2021.

However, the MoIT has no specific intention to deploy VREM as of this date. According to EVN, the hold up in implementing the market risks delaying the roadmap for the competitive retail electricity market outlined in Decision No. 63/2013/QD-TTg of the Prime Minister.

According to the roadmap, VREM must be piloted between 2021 and 2023 and then fully implemented after 2023. Therefore, EVN proposes that ERAV examine their proposals and reports to rapidly implement the competitive retail electricity market in accordance with the prescribed timeline.

EVN have also proposed that the MoIT and ERAV request consumers connected to the grid with a voltage of 110 kV or greater purchase electricity directly on the electricity market. This means that consumers will be able to choose when to purchase electricity from power supply units at an acceptable price, rather than being required to purchase electricity from EVN as they do today.

This proposal is based on EVN's belief that the estimation and release of distribution costs for voltage levels of 110 kV and above are simpler and that the number of consumers connecting to other voltage levels is lower.

If this mechanism is approved, these large consumers will no longer be required to purchase back electricity from EVN, the solitary buyer on the electricity market. Currently, the number of customers connecting to the grid with voltages of 110 kV or higher is small, but they account for a significant output, approximately between 40 and 45 per cent of the nation's electricity demand.

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