CBP scheme to be applied for electricity pricing

Minister of Industry and Trade Vu Huy Hoang has submitted to the Prime Minister a plan on building up the competitive electricity generation market in Viet Nam. The ministry has also suggested three projects to restructure the electricity industry.

According to the Ministry of Industry and Trade (MOIT), after thoroughly studying Vietnam’s electricity industry, its goals and capability of building a power market, and legal framework, with the direct consultancy of international consultants and the World Bank and Asian Development Bank (ADB), MOIT has decided to apply the cost-based pool scheme (CBP) for electricity pricing.

Under the scheme, all power plants with the capacity of 30MW and higher will have to bid prices on the market, except the BOT (build-operation-transfer) power plants. Electricity generation units will sign contracts on selling electricity with the only buyer.

Power plants with have different modes of investment (thermopower, hydropower, multi-functional hydropower plants and BOT plants) will have to offer prices in accordance with different principles and with different ceiling and floor prices, which aim to avoid sudden price increases on the market.

Leaders of MOIT believe that CBP is the optimum model. They say it will allow electricity stability and avoid unexpected price increases, while minimising risks for investors.

MOIT has also suggested three plans to restructure the electricity industry to make it suitable to the competitive power generation market and the CBP scheme.

MOIT has suggested assigning the National Load Dispatch Centre to give advice to the MOIT on the issue of state management, in order to ensure the safe, effective and stable provision of electricity.

The centre also has the function of reporting to the Minister of Industry and Trade, so that the minister can submit plans on electricity price retailing to the government for approval.

The centre will also have the function of verifying and assessing the power development strategies in provinces and cities put under central management. (Tien phong)