Under the draft plan compiled by the Electricity Regulatory Authority (ERA), the electricity competitive retail market would begin operating in 2021, but in the immediate time it would mostly serve big clients (110 KV voltage).

Meanwhile, the retail market for household use would only be activated after 2025.

Under the Prime Minister’s Decision 63 dated November 8, 2015, the electricity market in Vietnam would take shape in three stages – the competitive electricity generation market, the competitive electricity wholesale market and the competitive electricity retail market.

The wholesale market has been operating for nearly two years and the retail market is under preparation which is scheduled to begin operating the next year.

The retail market would be developed in four stages, including the preparation period 2020-2021, the period when big clients buy electricity from wholesale market (2021-2023, the period when big clients choose retailers (2023-2025) and the expansion of the retail market (after 2025) with priority given to big clients.

As such, two-thirds of the workload that needs to be done to obtain the electricity retail market has been implemented and only one-third of the workload is left. However, analysts commented that the retail market is still far away.

The retail market would be developed in four stages, including the preparation period 2020-2021, the period when big clients buy electricity from wholesale market (2021-2023, the period when big clients choose retailers (2023-2025) and the expansion of the retail market (after 2025) with priority given to big clients.

It is still unclear when household consumers can access the market.

There are four groups of clients classified by power companies, including manufacturers, administration agencies, household use for daily consumption and use for business purposes.

Of these, clients using electricity for production account for the largest proportion, about 60 percent, and enjoy the lowest average prices. Meanwhile, households just consume 30 percent of total demand.

However, though the electricity volume consumed by households is smaller than manufacturers, consumption is much higher.

The electricity market has three major elements, including electricity generation, transmission and distribution. Of these, electricity generation and distribution are believed to operate more effectively in the context of competition.

Vietnam’s electricity retail market still lacks the right to choose distributors for households.

When electricity distribution companies are established, the market principle would force companies to compete with each other in price and service quality, which would benefit customers.

An analyst when there are many suppliers, competition would allow users to easily change their service suppliers. In France, which began opening the electricity market on July 1, 2007,
30 companies provide electricity to households out of total 43 companies and consumers can choose service providers after comparing service quality and prices.

Kim Chi

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