Vietnam: Regulations on fixed pricing method and variable pricing method

10:38, 30/06/2015

Recently, the Ministry of Industry and Trade of Vietnam issued Circular No. 21/2015/TT-BCT regulating the pricing method for electric power system’s ancillary services and the procedures for scrutinizing a contract for provision of electric power system’s ancillary service.

Quy định về phương pháp xác định giá cố định và xác định giá biến đổi, thông tư 21/2015/TT-BCT

According to Circular No. 21/2015/TT-BCT of the Ministry of Industry and Trade of Vietnam, fixed pricing method and variable pricing method are as follows:

1. Fixed pricing method

Fix priced (gcd) for a provider of ancillary services is calculated by the following formula:

In which:

gcd:	Fixed price (VND/(kW.month));
Gcd,N:	The ancillary service provider’s total fixed income (in VND) in the year N;
	Planned annual coefficient of availability of the provider of ancillary services is determined as per section 2 of this Article;
Pkd,i:	Scheduled available output of generator i in the year N (kW);
n:	Quantity of power generators of the provider of ancillary services.

Note: The provider of ancillary services are responsible for defining the scheduled available output of a generator in the year N, which shall be negotiated and stipulated in the contract for provision of ancillary services with Vietnam Electricity Corporation. Such parameter is a factor for the calculation of the fixed price for the provider of ancillary services.

- Planned annual coefficient of availability of the provider of ancillary services is calculated by the following formula:

In which:

	The number of hours for repairs of the generator i according to the repair plan in the year N (hour);
HDMCB,i:	The limit of hours of forced outage of the generator i due to unexpected factors in the year N (hour), according to the parties' negotiations;
n:	The quantity of generators of the provider of ancillary services.

2. Variable pricing method

The following formula determines the variable price for the provider of ancillary services supplying supporting services at the request of the operator of electric power system and market:

In which:

	The variable price of the generator i at its maximum output j (VND/kWh);
bi,j:	Refined fuel consumption rate of the generator i at the power j is determined subject to the fuel consumption characteristics of the generator (kg/kWh or BTU/kWh);
Gnl:	The price of fuel for production of electricity (VND/kg or VND/BTU);
CvIp,i:	Auxiliary material cost rate for the generator i to produce 01 kWh of electricity (VND/kWh);
i:	Generator i of the provider of ancillary services.

Note: Ancillary service providers are responsible for establishing fuel consumption characteristics of the generators and auxiliary material cost rate for production of electricity, which shall be negotiated and stipulated in the contracts for provision of ancillary services with Vietnam Electricity Corporation. Such parameters are factors for the calculation of the generators’ variable prices. Characteristics and rates in the year N-1 can be utilized for the year N, if necessary.

View more details at Circular No. 21/2015/TT-BCT of the Ministry of Industry and Trade of Vietnam, effective from August 07, 2015.

Ty Na

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