Ministry reviews policy designs for competitive electricity market

Ministry reviews policy designs for competitive electricity market

The Ministry of Industry and Trade held a technical consultation meeting on May 16 to review and adjust the policy design for the country's competitive electricity market.

Vietnam Electricity workers check the transmission system. — VNA/VNS Photo

The Ministry of Industry and Trade held a technical consultation meeting on May 16 to review and adjust the policy design for the country's competitive electricity market, in an effort to accelerate power sector reforms and prepare for the launch of a competitive retail electricity market.

Deputy Minister of Industry and Trade Nguyễn Hoàng Long said that the review was an important step in implementing the Politburo's Resolution 70-NQ/TW on ensuring national energy security through 2030.

After nearly 14 years of operating a competitive power generation market and the launch of a competitive wholesale electricity market in 2019, Việt Nam's power sector is entering a new stage of development, according to Trịnh Quốc Vũ, deputy director general of the Electricity Authority of Vietnam.

"The challenges and shortcomings have been clearly identified. The task now is to determine solutions that can be implemented in a coordinated, effective and timely manner," Vũ said.

He stressed that developing a competitive electricity market is complex and requires close coordination between regulators, the National System and Market Operator (NSMO), State-owned utility Vietnam Electricity (EVN), energy groups PetroVietnam and Vinacomin, power corporations, electricity generators, large consumers and other stakeholders.

NSMO Deputy General Director Nguyễn Quốc Trung said that the proposed electricity market framework aims to ensure reliable electricity supply, transparent transactions and risk allocation, improved risk management for market participants and stronger investment signals for the power sector.

He stressed that the wholesale electricity market should serve as the foundation for the future retail market, adding that the retail market should not be developed as a standalone system, but should be introduced gradually as the wholesale market matures and existing operational challenges are addressed.

The draft also emphasises an open-access approach to ensure fairness among all market participants while safeguarding consumer interests throughout the reform process.

Experts agreed that the market design needs to be improved to ensure efficiency and support the long-term development of Việt Nam's electricity sector as well as the country’s overall economic growth.

Reforms must be implemented gradually and in line with the country's institutional and infrastructure readiness, experts said.

Participants at the consultation discussed a range of issues, including the gap between current market design and operational realities, mechanisms for electricity trading and settlement, pricing and support services, data management, risk-sharing arrangements and the role of EVN, as well as measures to ensure payment security and cost allocation.

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