Experts Urge Speed In Building A Competitive Power Market

April 4, 2014



The push towards a competitive power market in Vietnam has been rather steady, but the country should speed up the process to minimise monopoly in the industry, energy experts have said.

A seminar on the development of the energy market in Vietnam was recently held in Hanoi, which attracted the participation of several energy experts and officials from relevant ministries and branches.

Speaking at the gathering, Dr. Nguyen Minh Due, from the Vietnam Energy Association (VEA), said that under the approved road map, it would take nearly 20 years for Vietnam to accomplish its goals, as it includes three levels, ranging from 2005 to 2023.

According to Due, the move is actually aimed at renovating the economic management of the power industry so as to gradually transfer from a monopolised system to one that is more modern.

“The development of a competitive power market is a new introduction to Vietnam and a complicated process. However, if the country fails to work out drastic and more streamlined solution, a monopoly may continue, harming the electricity industry and the national economy as a whole,” he emphasised.

He went on to say that the current management over electricity mainly rests with the Ministry of Industry and Trade, whose management capacity may not be up to the task. The ministry has yet to work out a suitable model for a competitive power market after nearly ten years of study.

Currently, the state-owned Electricity of Vietnam Group (EVN) continues to dominate the electricity market.

Meanwhile, Dr. Bui Huy Phung, also from VEA, said that the current electricity market still lacks transparency, which proves confusing for consumers, who are subject to frequent price hikes.

“Even though the government stipulated that power prices are only to be adjusted quarterly, most consumers in Vietnam don’t understand the reason for a price hike,” he commented.

Vo Tri Thanh, Deputy Director of the Central Institute of Economic Management (CIEM), proposed that, in order to foster competition in the electricity industry, phases of power generation, power transmission and power distribution should be decentralised.

“While consumers continue complain about coal, electricity and petroleum price hikes, the producers are claiming losses. Each party has their own reason but the lack of a comprehensive set of standards has been the cause of losses to the national economy and has hindered the country’s development,” said Nguyen Van Thao, assistant to the state president.

He added that, in order to build up market mechanism, it will be vital to make sure monopoly does not exist.


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