Deputy Prime Minister requests early implementation of two-component electricity prices

The Ministry of Industry and Trade is assigned to work with EVN to soon implement two-component electricity prices to improve awareness of using energy economically and increase the efficiency of investment in power sources and grids.

This content is stated in the 17 April 2024 announcement of the Government Office, regarding the renewable energy development opinion of Deputy Prime Minister Tran Hong Ha.

Currently, Vietnam applies one-component electricity prices, which means payment according to the amount of electricity used during the month. This calculation method is considered to not accurately reflect the costs spent by the electricity industry (depreciation of assets, lines, substations...) for each customer.

In today's announcement, the Deputy Prime Minister requested the Ministry of Industry and Trade and EVN to soon implement two-component electric prices, including calculations based on consumption output and registered capacity used during the month. Under this mechanism, customers will pay separately for each 1 kW of capacity which they register monthly with the supplier. When they don't use it all, they have to pay the cost, instead of the electricity industry paying it and recovering it through price adjustments like today.

Government leaders believe that piloting and applying the new pricing mechanism will help people use electricity economically, and increase the efficiency of investment in sources and grids.

In fact, since 2014, the two-component electric price has been mentioned in Decision 28/2014 on the electricity retail price structure, but until now the Ministry of Industry and Trade has assigned EVN to conduct pilot research. Because, the electricity industry infrastructure, especially the ARM (automatic meter reading) meter system, has only now met the requirements, according to the explanation of the Electricity Regulatory Authority (Ministry of Industry and Trade).

For now, this pilot will only be researched for customers who use electricity for production and business - large consumers who are applying prices based on time of day. Currently, EVN hires consultants to develop this price mechanism project and application roadmap.