There will be ceiling and floor prices for different kinds of power plants
As said by Mr. Pham Manh Thang, Chief of ERAV, after completing the general design model of the power market, ERAV has implemented the stage of designing the detailed structure with the counseling from PB. To date, the project has been basically finished.
As evaluated in the workshop, the general model of the power market meets the demand of constructing a power market in Vietnam, which helps prevent the price fluctuation and is suitable with the conditions of Vietnam. The objectives of this model are stably providing electricity, attracting investment into power sector, encouraging competition to raise the effectiveness of business activities in power market and exactly reflecting costs by electricity tariffs.
According to the consultant PB, the competitive power market in Vietnam will operate with the model of central regulatory and offering tariffs in line with costs. Power plants which have the capacity of more than 30 MW will take part in the competition in the market. In particular, BOT plants will not participate in the power market but the power purchasing companies will offer prices instead because of some terms and conditions in the contract.
The offers have to comply with the regulations on the ceiling price established for each type of plants and the floor price. Accordingly, hydropower companies will have the ceiling prices 2% higher than the highest ceiling price of thermopower companies. The floor price will be VND 1/MWh for thermopower plants and VND 0/MWh for hydropower plants.
The power purchase contract is in the form of financial contractor. Apart from the revenue derived from the electricity tariffs, power plants are also paid for capacity cost in order for them to recover the investment. Especially, the mechanism of paying the capacity cost on hourly basis will encourage power plants to be willing to operate in peak hours and reasonably set up a maintenance schedule.
After collecting the constructive ideas, ERAV and the consultant PB will complete the evaluation report and submit to the Ministry of Industry and Trade. Therefore, the complete competitive power market will be put into practice just as planned in the roadmap.