The Ministry of Industry and Trade (MoIT) has recently issued a decision temporarily suspending Vietnam’s competitive power generation market from October 1 until further notice.

The decision clearly states the reasons for the temporary suspension, as stipulated in Circular No. 30/2014: to serve the mobilization of gas power plants over the remaining months of the year.

After six years with a competitive power generation market, there are now 76 power plants with a capacity of 30MW or more in the country, with a total capacity of 20,728 MW, an increase of 2.45-fold compared to 2012, when there were only 31 plants, according to a recent report from the Electricity Regulatory Authority of Vietnam (ERAV) at MoIT.

Mr. Dinh The Phuc, Deputy Director of ERAV, pointed out that obstacles remain for investors, especially regarding payment and operating procedures.

The shortening of the payment time is one of the issues businesses are most interested in when entering the market. The payment period is clearly specified, but each plant has a private power purchase agreement that specifies the payment time.

Deputy Prime Minister Vuong Dinh Hue recently asked MoIT to coordinate with the Ministry of Finance to promptly submit to the government a plan to adjust electricity prices.

Representatives of Electricity of Vietnam (EVN) said the price increases are still being calculated.

Electricity from hydro-power plants is much cheaper but prices are based on the price of coal, which is higher.

Mr. Tran Viet Ngai, Chairman of the Vietnam Energy Association, said that temporarily suspending the power generation market for gas power plants involving the market with higher prices  shows a real competitive market.

VN Economic Times