The Ministry of Industry and Trade has explained it suspended the competitive electricity generation market from October 1 due to abnormal weather that has made power supply unpredictable, coupled with unforeseen electricity supply and demand.
Workers are seen working inside Nhon Trach 2 gas-fi red power plant
Hydropower plants had been running at full capacity as the longer-than-expected rainy season made water levels in their reservoirs swell rapidly. Since July, however, many plants have discharged water to avoid possible dam breaches, which make power generation from these plants unpredictable, said Deputy Minister of Industry and Trade Hoang Quoc Vuong.
There were 21 hydropower plants having to discharge water in July, 55 in August, and 54 in September. Since October 1, there have been 54 plants opening sluice gates to ease the pressure on their dams, he said.
In the competitive electricity generation market, which has been in place for five years, hydropower plants have to offer their electricity price and power volume one day ahead. However, weather conditions in recent months and ensuing water discharges have made it hard for the operators of such plants to determine pricing.
In addition, Vietnam Electricity Group (EVN) as the monopolistic buyer of electricity has increased purchases of electricity from gas-fired power plants, which is another major reason.
Under its agreements with gas-fired power plants, EVN has to consume all electricity generated from these plants in their entire life cycles.
Due to such reasons, the Ministry of Industry and Trade decided to suspend the competitive electricity generation market to prevent the 500kV power line from becoming overloaded and focus on purchasing electricity from gas-fired power plants.
Another minor reason, according to Vuong, is electricity consumption in the first eight months of this year grew only 8.5% year-on-year, much lower than earlier predicted. The main reason for the low power consumption growth was the shorter-than-normal dry season in southern Vietnam this year.
The low demand for electricity has also made it more difficult to maintain the competitive electricity generation market.
However, during the suspension time, the ministry will still prefer purchasing electricity from hydropower plants, gas-fired power plants, and coal-fired power plants that offer low prices.
According to the Ministry of Industry and Trade, the suspension of the market is in line with Circular No.30/2014, and the market will be resumed when the above problems are solved.
The scheme for developing a competitive electricity generation market was launched by the Government in 2013 to diversify power sources and make the power market more competitive.
SGT