New Points on the Principles of Determining Electric Power System Ancillary Service Prices

Circular 46 stipulates regulations for plants on the list of providers of quick start auxiliary services and must frequently operate auxiliary services of power plants to ensure the security of the power system:

The price of auxiliary services is determined on the principle of ensuring that it sufficiently covers reasonable and legitimate actual costs and provides a reasonable profit for the auxiliary service provider, which includes thermal power plants; the price of auxiliary services does not include value-added tax, other types of taxes, and other payable amounts as prescribed by relevant laws. The price of auxiliary services for this unit includes the following components:

- Fixed price;- Variable price;- Start-up cost;- Other expenses (if any).

For frequency regulating auxiliary services, the principles for determining the price are stipulated in Circular 46 as follows:

- For strategic multipurpose hydropower plants of Vietnam Electricity that do not directly participate in the electricity market and are on the list of frequency regulating auxiliary service providers: The reasonable and legitimate costs incurred due to providing frequency regulating auxiliary services are included in the annual costs of the strategic multipurpose hydropower plant as stipulated in the Regulations on methods, procedures for determining annual costs, and electricity prices of strategic multipurpose hydropower plants issued by the Ministry of Industry and Trade;- For plants directly participating in the electricity market and on the list of frequency regulating auxiliary service providers: Revenue is calculated according to the Regulations on competitive electricity market operations issued by the Ministry of Industry and Trade.

Further, Circular 46 also stipulates regulations for spinning reserve auxiliary services, with the principles for determining the price as follows:

- For strategic multipurpose hydropower plants of Vietnam Electricity that do not directly participate in the electricity market and are on the list of spinning reserve auxiliary service providers: The reasonable and legitimate costs incurred due to providing spinning reserve auxiliary services are included in the annual costs of the strategic multipurpose hydropower plant as stipulated in the Regulations on methods, procedures for determining annual costs, and electricity prices of strategic multipurpose hydropower plants issued by the Ministry of Industry and Trade;- For plants directly participating in the electricity market and on the list of spinning reserve auxiliary service providers: Revenue is calculated according to the Regulations on competitive electricity market operations issued by the Ministry of Industry and Trade.

For voltage regulating auxiliary services, must operate auxiliary services of gas turbine power plants, and black-start auxiliary services, the principles for determining the price are as follows:

- For strategic multipurpose hydropower plants of Vietnam Electricity on the list of voltage regulating auxiliary service providers, black-start auxiliary services: The reasonable and legitimate costs incurred due to providing voltage regulating auxiliary services, black-start auxiliary services are included in the annual costs of the strategic multipurpose hydropower plant as stipulated in the Regulations on methods, procedures for determining annual costs, and electricity prices of strategic multipurpose hydropower plants issued by the Ministry of Industry and Trade;- For plants on the list of voltage regulating auxiliary service providers, must operate auxiliary services of gas turbine power plants, and black-start auxiliary services that are not strategic multipurpose hydropower plants of Vietnam Electricity: The auxiliary service provider is responsible for negotiating the price of auxiliary services, negotiating, and signing a contract to provide auxiliary services with Vietnam Electricity. The method for determining the cost of voltage regulating auxiliary services, must operate auxiliary services of gas turbine power plants, and black-start auxiliary services.

For detailed information, see Circular 46/2018/TT-BCT effective from January 1, 2019.

-Thao Uyen-

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