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

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

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

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

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

According to Article 1 of Decision 2503/QD-BCT, the electricity generation price range in Vietnam 2023 applicable to price negotiations of electricity purchase contracts of power plants specified in Point a, Clause 2, Article 1 of Circular 57/2014/TT-BCT is prescribed as follows:

- The electricity generation price range for coal-fired power plants is 0–1,559.70 VND/kWh (excluding value-added tax). In there:

The ceiling price of the electricity generation price bracket applied to coal-fired power plants (excluding value-added tax) is determined as follows:

- Parameters used to calculate the ceiling price of the electricity generation price bracket applied to coal-fired power plants in 2023:

+ Net capacity: 2x600 MW.

+ Net heat consumption rate at 85% load: 2411.39 kcal/kWh.

+ Coal heating value (HHV): 5,280 kcal/kg.

+ Coal price (excluding value-added tax and transportation costs): 1,808,000 VND/ton.

+ Exchange rate: 24,885 VND/USD.

- Power generation price range for hydroelectric plants: 0–1,110 VND/kWh (excluding water resource tax, forest environmental service fees, water resource exploitation rights grant, and value-added tax).

2. Procedures for developing and promulgating electricity generation price range in Vietnam

Article 10 of Circular 57/2014/TT-BCT (amended and supplemented in Circular 31/2022/TT-BCT) stipulates the procedures for developing and promulgating electricity generation price range in Vietnam 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 of Circular 57/2014/TT-BCT 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.

Nguyen Ngoc Que Anh

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