Consultation for Electricity (Amendment) Act

Consultant Seminar for amended Electricity Act 2012 was held in Green Innovation and Development Center (GreenID) under the Vietnam Union of Science and Technology Associations. The Seminar welcomed the participation of experts from research institutes and universities in the country.

Issues discussed were among contents proposed by the National Assembly on amending a number of articles of the Electricity Law and diligence report from the Science, Technology and Environment Commission of the National Assembly.

There are 6 main issues including implementation of current Electricity Act during the last 7 years; policies on energy and power development; energy planning, competitive electricity market, electricity price; electricity investment; power safety, security and environment.

The experts say, there is a need to adjust structure regulating market participants from 8 components to 4 separate components ... without the role of state management accounted. Process for an electricity planning is 10 years. 10 -year vision is based on the primary energy source with authentication but without planning in district level, except for 2 major cities such as Hanoi and Ho Chi Minh City.

Electricity price is adjusted under the consideration of 3 sections including the generator; grid investment and operation; price adjustment after released audit result. Electricity price should be changed because a current paradox existing that electricity prices for production is more expensive than that for households. Electricity prices with the state regulation is not a competitive market anymore.

However, the current status shows the need to have regulation of the state, but limited in each level depending on the roadmap towards the development of a competitive electricity market. Competitive bidding mechanism for electricity generation and purchase follows the spot price in the market.

According to Dr. Ngo Duc Lam, energy expert (GreenID): Vietnam hasn’t had yet competitive electricity market but just being in only the initial stage of transitional period towards the market, so all electricity activities must be linked to each appropriate stage and must be regulated by the state on the principle of fairness, equality and transparency. Electricity prices are regulated to classify into 6 types of price and 1 type of fee, but not 3 types of price and 5 types of fee as before, no need for new fees for electricity deregulation.

As for power safety, security and environment, the special nature of future power system requires a new program added in law, in which it needs to determine the level of safety for timely processing schemes when the incident occurs, besides, regulations on disaster level are also needed to proclaim a state of emergency; electricity security, compensation for damage after the incident. Regarding electricity policies and investment, the Law should concretize policy on the use of new and renewable energy sources, creating a breakthrough on price in the structure of power in Vietnam.

"It needs to have an additional chapter on renewable energy on the Electricity (Amendment) Act" - It is the opinion of independent specialized expert group from GreedID that renewable energy is a good way for Vietnam's energy sector in the future, both for production and life, and environment protection, but it is still unclearly mentioned in the report No. 57/TTr-CP Government dated 03/04/2012 of the National Assembly attaching to the amending Electricity Law draft. This content needs to be built into a stand-alone chapter.

Many experts believe that, the content of power planning at the level of district, commune should be removed from the Electricity (Amendment) Act. A circulation for a power planning in provinces and cities directly under central management is 10 years and a 10-year vision. At the same time, it should be ensured no cross compensation in electricity price and a clear, transparent and public pricing structure towards a competitive electricity market. Great power works which are sensitive in safety, security and environment must be approved by National Assembly and considered through a referendum.

Dr. Dao Trong Hung (Vietnam Institute of Science and Technology) said that the Electricity (Amendment) Act should avoid to conflict with other laws for the Environment, Forest Protection and Development, Water Resources, Mineral products ... at the same time pay attention to livelihoods, cultural and social influences to people around the areas used for power construction ...

The workshop participants also contributed many ideas on sanctions issues of power projects behind schedule, did not approve of charging power regulating activities, to encourage investment in auxiliary industries for electricity sector...

All comments will be forwarded to the Science and Technology Commission (National Assembly) to discuss in the third session of the National Assembly XIII.