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Vietnam Today

Power sector needs independent regulatory agency

Released at: 15:05, 01/07/2015

Power sector needs independent regulatory agency

Agency needed to ensure needs of all stakeholders are considered, workshop told.

by Nguyen Quynh

“It is necessary for Vietnam to establish an independent regulatory agency in the power sector to balance the benefits between enterprises in the industry and the State,” Mr. Julian Scarff, an experienced expert in the power sector at the Faculty of Business Law and Taxation at Monash University told a workshop on the “Institutions for a Competitive Energy Market in Vietnam”, hosted by the Central Institute for Economic Management (CIEM) on July 1.

Mr. Scarff pointed out that to reform its power sector Vietnam needs an independent regulatory agency to act as arbitrator to strike a balance between the needs of both sides. The Electricity Regulatory Authority of Vietnam is already in place but is under the Ministry of Industry and Trade (MoIT).

Such an agency needs to be given certain rights to make the general rules for competition between businesses in order to ensure transparency in electricity prices and market monitoring in both wholesale and retail activities. It must also introduce and adjust rules on the operation of the electricity market, at the same time advising the government on the market’s development.

Addressing the workshop, Mr. Nguyen Dinh Cung, President of CIEM, said that Vietnam is on its way towards adopting full market mechanisms. “Sectors that can be competitive should allow competition,” he said. “The State should only conduct management and supervision.”

Reform of the power sector in Vietnam has hit a number of stumbling blocks. While the demand for electricity is increasing, supply is regularly in shortage and remains unstable. The development of private investment projects have been delayed and infrastructure investments have been inadequate.

Under development plans, Vietnam’s power market is to be created and developed in three stages: competitive power generation in 2005-2014, competitive wholesale in 2015-2022, and retail competition after 2022.

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