Price Cap for Hydropower Plant Offers

Pursuant to the provisions of Article 41 Circular 28/2018/TT-BCT, the bidding price limit of hydropower plants with reservoirs regulated for more than one week is determined based on the following week's water value of that plant, announced in accordance with the provisions of Clause 2, Article 39, Circular 28/2018/TT-BCT. To be specific:

- The floor price of the bid is 0 VND/kWh;- The ceiling price of the bid is the highest value of:- The water value of that plant;- The average price of the ceiling prices of the thermal power units participating in the electricity market in the monthly operation plan.- Monthly, the operator of the electricity system and market is responsible for announcing the average ceiling price of the thermal power units for the next month to the hydropower plants along with the schedule for announcing the ceiling prices of the thermal power units for the next month.

The bidding price limit of hydropower plants with reservoirs regulated from 2 days to 1 week is determined as follows:

- The floor price of the bid is 0 VND/kWh;- The ceiling price of the bid is the highest value of:- The highest water value of the hydropower plants participating in the market;- The average price of the ceiling prices of the thermal power units participating in the electricity market in the monthly operation plan;- Weekly, the operator of the electricity system and market is responsible for announcing the highest water value of the hydropower plants participating in the market for the next week to the hydropower plants with reservoirs regulated from 2 days to 1 week.

In case the reservoir of the hydropower plant violates the first week's water limit, the ceiling price of the bid for this hydropower plant in the following week is equal to the variable cost of the most expensive DO oil thermal unit in the electricity system. When ensuring not violating the water limit of the week, the plant continues to apply the ceiling price of the bid as prescribed in Clause 1 or Clause 2, Article 41, Circular 28/2018/TT-BCT from the third day of the week.

Monthly, the operator of the electricity system and market is responsible for announcing the variable cost of the most expensive DO oil thermal unit in the electricity system.

In cases where a hydropower plant located in an area with an electricity power reserve of less than 5%, as announced according to the procedures for implementing medium-term and short-term electricity system security assessments issued by the Electricity Regulatory Authority and guided by the Ministry of Industry and Trade's regulations on the transmission electricity system, the ceiling price for the bids of the hydropower plants in this area for the evaluation week is equal to the variable cost of the most expensive DO oil thermal unit in the electricity system.

When the electricity power reserve of the area is equal to or higher than 5%, the plants in this area continue to apply the ceiling price of the bid as prescribed in Clause 1 and Clause 2, Article 41, Circular 28/2018/TT-BCT.

Hydropower plants participating in the electricity market have the responsibility to bid prices that meet the following requirements:

- Comply with the regulations on the ceiling price and floor price of the bid in Clauses 1, 2, 3, and 4, Article 41, Circular 28/2018/TT-BCT;- Requirements on downstream water usage constraints and other hydrological constraints.

For more related content, see: Circular 28/2018/TT-BCT, effective from November 15, 2018.

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