Pilot implementation of the competitive wholesale electricity market: Shortcomings must be addressed soon

After more than a year of pilot operation of the competitive wholesale electricity market (VWEM), besides some certain optimistic results, Vice Minister of Industry and Trade Hoang Quoc Vuong pointed out shortcomings which need to be addressed soon.

What has been gained?

According to Vice Minister Hoang Quoc Vuong, more than one year of VWEM pilot operation is paper - based. The objective of this phase is to pilot the first step of electricity wholesale competition where many sellers and many buyers take part in. Market participants will pilot transactions on the competitive wholesale electricity market. Along with that, power purchase agreements signed between power generators and EVN are allocated to the five power corporations.

Mr. Dinh The Phuc - Deputy Director of the Electricity Regulatory Authority of Vietnam (Ministry of Industry and Trade) said that the PPAs/contract are allocated so that a PPA with a hydropower plant, a PPA with a coal-fired power plant and a PPA with a gas-fired power plant are allocated to each power corporation.

In particular, the information technology infrastructure has been adequately equipped, meeting the VWEM pilot operation requirements. Power corporations have been equipped with servers being installed with database and software to support payments in the electricity market, being connected to the information network of the electricity market via fiber optic lines; and these power corporations are provided with accounts and delegated with access permissions.

The examination, crosscheck and validation of payment statements are well performed by the power corporations in accordance with regulations. Weekly reports are sent to ERAV on the status of statement validation, electricity buying prices from power plants.

By the end of the second quarter of 2017, the collection of measurement / metering data, projection of load curves of power corporations, calculation and allocation of PPAs / contracts and consideration of regulatory needs among power corporations have been completed.

The operation of the competitive wholesale electricity market has achieved certain positive results during the pilot phase

Shortcoming need to be addressed early

Although some certain results have been achieved, the pilot operation of the electricity market has revealed many shortcomings such as the weak personnel of power corporations, slow development of the IT infrastructure yet to keep up with the rapid development of the market, etc.

In order to prepare for the official operation of the wholesale electricity market in 2019, Mr. Hoang Quoc Vuong emphasized that it was necessary to focus on finalizing the pilot operation in the last months of 2017, at the same time completing the infrastructure system as well as human resource training for organizations, businesses and market participants.

The Electricity Regulatory Authority of Vietnam should continue to fulfill the legal framework, including the development and submission of a new circular on operation of the competitive wholesale electricity market to the Ministry of Industry and Trade for approval and issuance. In order to move to the wholesale electricity market, ERAV should study and propose a suitable pricing mechanism. EVN should invest in its information technology infrastructure suitable to levels of the electricity market.

Mr. Tran Dang Khoa – Director of Electricity Market Department (EVN), said that the total investment cost of the information technology (IT) infrastructure project serving operation and monitoring of VWEM was about VND 500 billion. The project implementation progress is behind its original schedule, so in the coming time, EVN will speed up to complete the project in 2018. Regarding human resource training, the National Load Dispatch Center has been carrying out a huge load of works to supplement highly qualified and experienced human resources in the fields of finance, legislation and electricity market operation.

Competitive generation market operation outcomes as of June 2017:

- There are 76 power plants participating in the market;

- The total installed capacity participating in the market reached 20,728 MW, an increase of 2.45 times compared with the time when the market came into operation in July 2012 (31 generators).

- The market operation keeps safe and uninterrupted.

- All the information is disclosed, contributing to the increase of transparency and fairness in the mobilization of power sources.


  • 15/10/2017 05:22
  • evn.com.vn