EuroCham met ERAV in Hanoi to explore the latest developments in the clean energy sector in Vietnam.
EuroCham's GGSC's advocacy has focused on creating more space for private sector energy developers, financiers and investors in the medium sized power plant market.
ERAV have been very productive lately, preparing improvements in the energy market related to:
- More transparency on retail power tariffs and a forward "pricing framework"
- Reducing licensing requirements for small power plants and
- Preparing the legal ground for direct power purchase agreements
- Implementing different wholesale energy prices for different regional energy markets in Vietnam. The relative pricing may reflect the relative abundance of energy in the North and Central regions, and the tighter supply in the south. The sale cost of energy in HCMC, from wholesale EVN, to retail EVN, being ~380VND (US 1.8 cents) higher than the same transaction in the north.
These are extremely positive developments, particularly after 2+ years of no adjustment of the retail tariffs, despite strong evidence of rising power production and distribution costs. This could lead to a closing of the "economic energy gap" which is simply the difference between the economic value/cost of energy and the price ascribed to it in the market place.