The Ministry of Industry and Trade to issue the electricity generation price bracket for 2023

The Ministry of Industry and Trade to issue the electricity generation price bracket for 2023 (Internet image)

Regarding this issue, LawNet would like to answer as follows:

On September 28, 2023, the Ministry of Industry and Trade issued Decision 2503/QD-BCT approving the electricity generation price framework in 2023.

The Ministry of Industry and Trade to issue the electricity generation price bracket for 2023 in Vietnam

Electricity generation price bracket of 2023 applied to negotiation over power purchase agreement of power plants under Point a Clause 2 Article 1 of Circular 57/2014/TT-BCT:

(1) Electricity generation price bracket for coal-fired thermal power plant: 0 - 1.559,70 VND/kWh (VAT not included). Where:

The top limit of electricity generation price bracket applicable to coal-fired thermal power plant (VAT not included) is determined as follows:

Parameters used for calculating the top limit of electricity generation price bracket applied to coal-fired thermal power plant of 2023:

- Net capacity: 2x600 MW.

- Heat rate at 85% load: 2411,39 kcal/kWh.

- Higher heating value: 5.280 kcal/kg.

- Coal price (VAT and transport costs not included): 1.808.000 VND/tonne.

- Rate: 24.885 VND/USD.

(2) Electricity generation price bracket of hydroelectricity power plant: 0 - 1.110 VND/kWh (water resource tax, forest environment service fees, water resources extraction licensing fees, and VAT not included).

Decision 2503/QD-BCT takes effect from the date of signing.

Procedures for developing and promulgating electricity generation price range in Vietnam

Procedures for developing and promulgating electricity generation price range are specifically stipulated in Article 10 of Circular 57/2014/TT-BCT (amended in Circular 31/2022/TT-BCT) as follows:

- Within 15 working days from the date on which Feasibility study for construction investment of power plants is approved. Project developers of these power plants are responsible for providing Feasibility study for construction investment for Vietnam Electricity (EVN).

- Before November 1 of each year, the EVN is responsible for:

+ On the basis of data under approved Feasibility study for construction investment and total investment valid at the time of calculating electricity generation price range received by the EVN before October 15 of each year or data under negotiation over power purchase agreement (if any), the ENV shall calculate or hire experts to calculate electricity generation price for thermal power plants in accordance with Article 5, Article 6, Article 7, and Article 8 of Circular 57/2014/TT-BCT;

+ Propose Standard Power Plant and parameters involved in the calculation of electricity generation price for Standard Power Plant under Appendix I hereof depending on implementation of power purchase agreements and produce documents on calculation of electricity generation price range in accordance with Article 11 hereof and request Electricity Regulatory Authority of Vietnam (ERAV) to appraise:

+ Calculate ceiling costs of hydroelectricity plants using methods under Article 9 of Circular 57/2014/TT-BCT.

- Within 5 working days from the date on which documents on calculation of electricity generation price range under Point b Clause 2 of Article 10 of Circular 57/2014/TT-BCT are received, the ERAV is responsible for inspecting legitimacy of the documents. If necessary, the ERAV shall request the EVN to amend or clarify contents of the documents.

Within 15 working days from the date on which the request for revision is received, the EVN is responsible for submitting reports explaining contents of the documents as requested.

- Within 20 working days from the date on which legitimate documents and reports clarifying contents of the documents sent by the EVN are received, the ERAV is responsible for choosing Standard Power Plants and organize appraisal of electricity generation price range proposed by the EVN.

- Within 15 working days from the date on which electricity generation price range is appraised, ERAV is responsible for completing documents and requesting the Minister of Industry and Trade to approve electricity generation price range for the following year and publishing on website of the ERAV.

The case where electricity generation price range of the following year has not been announced, the latest valid electricity generation price range shall prevail.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE