Has the EVN lost its monopoly in operating the competitive electricity retail market?

VCN- The Ministry of Industry and Trade has stated that putting the competitive electricity retail market into operation will change the nature of electricity purchase and sale transactions. According to each level of development of the electricity market, the monopoly of Vietnam Electricity (EVN) has been gradually eliminated.
Solar Power Trading: Deadlock due to lack of clear regulations Solar Power Trading: Deadlock due to lack of clear regulations
Due to deadlock over Covid-19 pandemic, many projects of power source behind schedule Due to deadlock over Covid-19 pandemic, many projects of power source behind schedule
1353-2735-img-20181125-215152
The Ministry of Industry and Trade has been developing a project to restructure the electricity industry to serve the competitive electricity retail market to submit to the Prime Minister in 2020. Photo: Nguyen Thanh

Electricity price determined by the market

Recently, the Ministry of Industry and Trade received many questions and requests from members of the National Assembly related to the modification of the electricity retail price schedule, the electricity price adjustment roadmap as well as the operation of the competitive electricity retail market

Specifically, some have said that the implementation of the electricity market in Vietnam is slow and how has the Ministry of Industry and Trade been implementing a competitive electricity retail market amid the impact of competition on the electricity market?

Regarding this, according to the Ministry of Industry and Trade, on August 7, the Ministry issued Decision No. 2093 / QD-BCT approving the design of the competitive retail electricity market model.

In the fully competitive retail electricity market, electricity users will have the option to change their electricity retail unit and at the same time reach agreement with electricity retailers on electricity selling prices.

Putting the competitive electricity retail market into operation will change the nature of electricity purchase and sale transactions, shifting from the State-regulated mechanism of electricity prices to a market-determined electricity price mechanism and according to an agreement between the electricity seller and the electricity user.

The competitive electricity retail market plan from 2022 has been developed by the Ministry of Industry and Trade according to the roadmap, expanding the number of customers participating in the retail market according to scale of electricity consumption and by supply voltage from high to low.

In particular, the first step will pilot a mechanism allowing large electricity users to sign contracts directly with renewable energy sources, before proceeding to expand the large electricity consumers (110 kV) allowed buying electricity directly in the spot market and the final step will be for smaller electricity retailers to change electricity retailers.

"In preparation for the electricity retail market, the Ministry of Industry and Trade has been developing a project to restructure the electricity industry to serve a competitive electricity retail market to submit to the Prime Minister in 2020, and at the same time coordinate with relevant ministries and branches to review and propose amendments and supplements to legal documents that are suitable for the operation of the electricity retail market,” said a representative of the Ministry of Industry and Trade.

Has the EVN lost the monopoly?

From the perspective of whether developing the electricity market can erase the monopoly role of EVN or not, the Ministry of Industry and Trade clearly states that according to each level of the development of the electricity market, the Ministry of Industry and Trade has developed and submitted a project to the Prime Minister on restructuring the electricity industry to meet the requirements of electricity market operation.

The principle throughout the restructuring process is to create a fair and transparent competitive environment, eliminating monopoly in electricity generation, buying/wholesaling electricity and retailing electricity. Activities with a natural monopoly (power transmission and distribution) will be separated and subject to State regulation.

Via that process, the monopoly of the EVN in the stages has been gradually eliminated.

In the power generation stage, currently, two power generation corporations belong to State economic groups, namely Vietnam Oil and Gas Group (PVN) and Vietnam Coal-Mineral Industries Group (TKV), have been equitised. A third of EVN's Power Generation Corporations have been equitised.

After equitisation, companies have the participation of many domestic and international private investors. The remaining two power generation corporations under the EVN are also in the process of implementing equitisation procedures.

In the electricity wholesale stage, the EVN is no longer the only electricity wholesaler as before, there are five more Electricity Corporations (Electricity Corporation in the north, central, south, Hanoi, HCM City) are directly involved in purchasing electricity in the spot market as well as signing contracts with power plants.

At the electricity retail stage, the Ministry of Industry and Trade is implementing a project to restructure the electricity industry to serve a competitive electricity retail market to submit to the Prime Minister in 2020. The distribution stage of retail electricity will be restructured to create a competitive environment, allowing customers to choose their electricity suppliers.

To attract social resources to invest in the power sector and enhance the competitiveness and efficiency of electricity units, the Ministry of Industry and Trade believes a strong synchronous institutional innovation is required and accompanying mechanisms on organisation, finance, mechanism to attract domestic and foreign private investment.

By Thanh Nguyen/Bui Diep

Related News

Build a flexible mechanism and "reinforce" governance for state-owned enterprises

Build a flexible mechanism and "reinforce" governance for state-owned enterprises

VCN - State-owned enterprises (SOEs) always need flexible and responsive operating mechanisms as well as adequate legal corridors to remove bottlenecks and free up resources for SOEs in socio-economic development
Remove gold monopoly to bounce back its normal state

Remove gold monopoly to bounce back its normal state

VCN - According to Dr. Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, gold should be allowed to return to its normal state because the fear of "goldization" only occurs when gold is deposited in commercial banks as a form of deposit. The most radical solution to eliminate the unreasonably huge gap in domestic and international gold prices is still to allow gold imports.
Strong decentralization for ministries, branches and localities to manage and use electricity projects

Strong decentralization for ministries, branches and localities to manage and use electricity projects

VCN - Responding to petitions from voters in Lao Cai province related to problems in handing over public assets such as power grid projects to the electricity industry for management, the Ministry of Finance said that it has submitted to the Government to promulgate Decree No. 02. /2024/ND-CP on transferring power projects as public assets to Vietnam Electricity Group (EVN).
The "ambitions" and proposals of state-owned enterprises

The "ambitions" and proposals of state-owned enterprises

VCN - Despite the difficulties, 2024 also opens up many opportunities, and state-owned enterprises (SOEs) have proposed many plans to develop businesses, motivating them to make significant contributions to economic development.

Latest News

MoIT sets export growth at 6% in 2025

MoIT sets export growth at 6% in 2025

The recovery of major markets such as the US and EU will be an important driving force for exports, especially in electronics, consumer goods and textiles, the MoIT said.
Vietnam's first logistics park opens in Lang Son

Vietnam's first logistics park opens in Lang Son

The Viettel Lang Son Logistics Park, the first of its kind in Vietnam, officially opened in Cao Loc district, the northern mountainous province of Lang Son, on December 11.
Vietnam’s coffee exports possibly top 5 billion USD for first time

Vietnam’s coffee exports possibly top 5 billion USD for first time

Coffee prices have increased by over 50% on average this year, enabling the export revenue to potentially surpass 5 billion USD for the first time.
Support aggregate demand to promote economic growth

Support aggregate demand to promote economic growth

VCN - Financial policy, especially fiscal policy, has played an important role in promoting aggregate demand to contribute to economic development. In the current context, when the economy is entering the final year of the 2021-2025 terms with many difficulties and challenges, it is necessary to have solutions to promote production and business, supporting economic development.

More News

Plastics demand growing, says industry association

Plastics demand growing, says industry association

The plastics industry has enjoyed impressive growth this year, driven by steady demand from the construction, packaging and consumer industries, according to the Vietnam Plastics Association.
Vietnam’s tuna exports gain larger market shares in key markets

Vietnam’s tuna exports gain larger market shares in key markets

After overcoming challenges related to tuna size regulations and market volatility, Vietnam’s tuna exports are recovering and expanding in key markets.
Efficiency in emission reduction and sustainable development for wood enterprises

Efficiency in emission reduction and sustainable development for wood enterprises

VCN - Digital transformation aimed at reducing emissions and fostering sustainable development has become an intrinsic need for businesses. This shift stems from recognizing the tangible benefits demonstrated by pioneering enterprises that have successfully implemented and achieved these initiatives.
US emerges as biggest consumer of Vietnam’s pepper

US emerges as biggest consumer of Vietnam’s pepper

Vietnam exported 235,335 tonnes of pepper, including 207,498 tonnes of black pepper and 27,837 tonnes of white pepper, in January - November to earn 1.22 billion USD, with the US being the biggest importer, according to the Vietnam Pepper and Spice Association (VPSA).
Why are seafood exports to some Middle Eastern countries blocked?

Why are seafood exports to some Middle Eastern countries blocked?

VCN - Many seafood export shipments to some Middle Eastern countries have had their documents returned by the Consular Department due to the nightmare of consular legalization procedures, leading to a blockage in exports to these markets.
Seafood exports increase competitiveness through quality

Seafood exports increase competitiveness through quality

VCN - The "wave" of orders from a number of large markets and increased consumption demand in the coming months will be the driving force to accelerate seafood exports at the end of the year. Not only racing to increase exports, Vietnamese seafood also increases its competitive advantage by focusing on product quality, seed sources, green transformation in the production process...
Textiles, footwear enterprises need support to green the supply chain

Textiles, footwear enterprises need support to green the supply chain

VCN- As one of the world's leading textile, garment and footwear exporting countries, Vietnam is facing many opportunities as well as challenges in response to strict customer regulations in "greening" production, including a number of commitments such as implementing social and environmental responsibilities and reducing emissions...
Vietnam’s seafood export hits 1 billion USD mark for October

Vietnam’s seafood export hits 1 billion USD mark for October

Vietnam's seafood industry is on a roll, with export momentum propelling it toward the 10 billion USD target for 2024, laying robust groundwork for 2025.
Opportunities for export breakthroughs through e-commerce

Opportunities for export breakthroughs through e-commerce

VCN - According to Mr. Nguyen Van Thanh (in photo), Director of the E-commerce Development Center - Department of E-commerce and Digital Economy (Ministry of Industry and Trade), developing national e-commerce programs and fostering international cooperation are key to effectively harnessing Vietnam's potential in this area, thereby enhancing competitiveness and promoting sustainable development in the global market.
Read More

Your care

Latest Most read
MoIT sets export growth at 6% in 2025

MoIT sets export growth at 6% in 2025

The recovery of major markets such as the US and EU will be an important driving force for exports, especially in electronics, consumer goods and textiles, the MoIT said.
Vietnam's first logistics park opens in Lang Son

Vietnam's first logistics park opens in Lang Son

The Viettel Lang Son Logistics Park, the first of its kind in Vietnam, officially opened in Cao Loc district, the northern mountainous province of Lang Son, on December 11.
Vietnam’s coffee exports possibly top 5 billion USD for first time

Vietnam’s coffee exports possibly top 5 billion USD for first time

Coffee prices have increased by over 50% on average this year, enabling the export revenue to potentially surpass 5 billion USD for the first time.
Support aggregate demand to promote economic growth

Support aggregate demand to promote economic growth

VCN - In recent times, the world situation has been unstable, creating many difficulties and challenges for the sustainable growth of the global economy.
Plastics demand growing, says industry association

Plastics demand growing, says industry association

The plastics industry has enjoyed impressive growth this year, driven by steady demand from the construction, packaging and consumer industries, according to the Vietnam Plastics Association.
Mobile Version