Retail electricity prices lower than production costs

In its report on August 2025 electricity bills and proposed amendments to Decree 72/2025/ND-CP regarding mechanisms and timing for adjusting average retail electricity prices, EVN stated that 83% of electricity costs are attributed to power generation. The remaining 17% is split among transmission, distribution-retail, sector management, and auxiliary activities, with a decreasing trend over the years.

During the 2022-2023 period, the sharp rise in input fuel prices (coal, oil, gas) and foreign exchange rates - caused by the geopolitical crisis between Russia and Ukraine and post-COVID-19 recovery fuel demand - greatly increased production costs.

Additionally, hydropower, a cheap energy source, faced output reductions due to adverse weather and hydrological conditions. As a result, EVN had to compensate with higher-cost electricity sources.

Electricity purchased from plants under the management of EVN’s parent company and affiliated generation corporations accounted for 46% of the system’s total output in 2022 and 42% in 2023. The rest was sourced from external partners.

Amid such challenges, EVN and its subsidiaries implemented various measures to boost efficiency, reduce recurring and major maintenance costs by at least 10%.

In 2022, the production cost of commercial electricity averaged 2,032.26 VND/kWh (approximately $0.083). Generation costs made up 1,698.45 VND/kWh ($0.069), representing 83.57% of the total. However, the average retail price was only 1,882.73 VND/kWh ($0.077).

In 2023, the cost rose to 2,088.90 VND/kWh ($0.085), with the generation segment costing 1,744.12 VND/kWh ($0.071), or 83.49% of the total. The average retail price was 1,953.57 VND/kWh ($0.080).

This meant electricity was sold at a loss of 149.53 VND/kWh ($0.0061) in 2022 and 135.33 VND/kWh ($0.0055) in 2023.

According to EVN, the Ministry of Industry and Trade dispatched inspection teams to verify electricity pricing during this period. In 2024, the State Audit Office also conducted a special audit on EVN’s electricity price management from 2022 to 2023.

Unrecognized costs result in over $1.8 billion loss

EVN’s report further pointed out that during 2022-2023, approximately 44 trillion VND ($1.8 billion) in costs were either unrecognized or only partially recognized in past retail price adjustments.

As a result, EVN has not been adequately reimbursed for input costs, undermining capital preservation and growth of the state’s investment in the utility.

Moving forward, EVN plans to invest in several large-scale, urgent projects, including the Ninh Thuan 1 nuclear power plant, Quang Trach LNG power plants 2 and 3, Bac Ai pumped-storage hydropower plant, and offshore wind and hydropower expansion projects.

These projects will require significant investment capital.

EVN cited Clause 2, Article 52 of the 2024 Electricity Law, which states that retail electricity prices must be promptly adjusted based on actual input variables, ensuring cost recovery and reasonable profit to preserve and grow the business's capital in line with the economy and the stage of competitive electricity market development.

It also referenced the Law on Management and Use of State Capital, which mandates that enterprises preserve and grow state capital investments.

Therefore, EVN has proposed that Decree 72 be amended to allow previously unrecognized or partially recognized costs to be factored into upcoming electricity price plans. This would ensure adequate financial resources for upcoming projects assigned by the government and ministries.

Tam An