Vietnam’s methods of setting annual average electricity prices

Vietnam’s methods of setting annual average electricity prices

The average electricity price means an average electricity retail price within the average electricity retail price bracket defined by the Prime Minister of Vietnam. 

According to the Circular, the methods of setting the annual average electricity prices shall be calculated based on the costs of electricity generation, costs of ancillary services for power systems, costs of purchase of services for electricity transmission, electricity distribution-retail, load dispatching, and regulation of electricity market transactions, and administrative costs in annual average electricity prices. 

For the purpose of having calculation grounds, Circular No. 09/2024/TT-BCT also provides specific guidelines on the method of setting the total cost of stages, such as electricity generation; ancillary services for power systems; services for electricity transmission; services for electricity distribution-retail; services for load dispatching and regulation of electricity market transactions; administrative costs and target profit, etc. 

Specifically, the estimated total commercial electricity generation output in the year N calculated by Vietnam Electricity (EVN) shall be according to the plan for power supply and power system operation in the year N. 

Additionally, Circular No. 09/2024/TT-BCT also provides guidelines on methods of setting the average electricity prices in the year.  

According to the Circular, the total cost of the purchase of services for electricity transmission, electricity distribution-retail, and load dispatching and regulation of electricity market transactions and the total administrative cost shall comply with the scheme for the annual average electricity price; 

The total cost of electricity generation and the total cost of the provision of ancillary services for power systems by power plants shall be updated quarterly. 

The Electricity Regulatory Authority of Vietnam shall take charge and cooperate with relevant agencies in submitting reports to the Minister of Industry and Trade of Vietnam on the inspection, review, and supervision of schemes for average electricity prices developed and revised by EVN under Decision No. 05/2024/QD-TTg.

EVN shall implement Decision No. 05/2024/QD-TTg and Circular No. 09/2024/TT-BCT.

See more details in Circular No. 09/2024/TT-BCT, effective as of September 14, 2024. 

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