Power sector needs recharge

Engineers check equipment at Nhon Trach 2 power plant in Dong Nai. Experts are saying that the country's power market needs to become more competitive. — VNA/VNS Photo Huy Hung

While the power generation market is fairly competitive, State-owned Electricity of Viet Nam remains the sole distributor, and demanded a rise in prices to offset rising costs.

The association's chairman, Tran Viet Ngai, accepted the need to increase electricity prices but said it should be based on market forces and that the Government should amend the laws and eliminate the monopoly in the sector.

"If the market is determined top-down like now, it cannot operate healthily," he said.

Other experts said that only when consumers are able to choose the seller would there be a truly competitive market.

A plan drafted by the Ministry of Industry and Trade envisages Viet Nam having a competitive retail power market after 2023.

"We began to create a competitive system for the power market since 2005 but it will be finished only in 2023," said Nguyen Minh Due from Ha Noi Polytechnique University.

"It is too long a period and will have a bad impact since a monopoly still exists and causes great losses to the electricity sector and the economy."

Ngai said that after 10 years of having a competitive power generation market, the country is no closer to meeting the requirements of true competitiveness, namely effectiveness, fairness, and healthy competition.

EVN remains the largest power producer.

Ngai pointed out that while Article 19 of the Power Law stipulates the setting up of an independent electricity regulatory agency, nothing has been done about it yet.

Many delegates said the Government should create a power ministry to help develop with a master plan, development, policy making, and restructuring and equitising the industry.

Duong Quang Thanh, deputy general director of EVN, protested about the fact that the competitiveness policy is only applicable to the power generation market and not to inputs like coal and gas, whose prices are not based on market demand.

Dinh The Phuc deputy head of the Ministry of Industry and Trade's Power Regulation Department, agreed, saying that coal prices for thermal electricity plants had been increased sharply, causing the cost of power production to rise from VND846 per kWh to VND1,168 in the last two years.