Ministry of Industry and Trade "finalizes" plan to apply 2-component electricity price

According to the Electricity Department ( Ministry of Industry and Trade ), the two-component electricity price is the price structure to be paid for the registered capacity and the actual electricity used. This is different from the current price mechanism which is the selling price according to a component of consumed electricity, that is, calculated according to the actual amount of electricity used. The current application of the ladder method of calculating electricity prices only reflects the amount of electricity consumed and does not reflect the true nature of the electricity selling price for each subject.

Mr. Nguyen Anh Tuan, General Director of EVN proposed that, in the immediate future, the subject of application should only be considered for large production customers with electricity consumption of 200,000 kWh/month or more, connected to a voltage level of 22 kV or more (the customer group that is subject to the direct power purchase mechanism - DPPA according to regulations), not yet applied to residential customers because they have to invest in replacing the entire metering system.

According to Minister of Industry and Trade Nguyen Hong Dien, it is necessary to soon implement the two-component electricity price mechanism (capacity price and electricity price) according to the provisions of the Electricity Law. Initially, it will be applied to the group of customers with large electricity consumption, starting from January 1, 2026.

In order to effectively and promptly apply the 2-component electricity price mechanism to meet new requirements, Minister Nguyen Hong Dien directed the Electricity Department to coordinate with EVN and relevant units to review and complete the 2-component electricity price project in a scientific and feasible manner, learning from international experience, and submit it to the Ministry's leaders and competent authorities before October 15, 2025. Along with that, there must be an assessment report on the project's impact, providing full information, and reporting to the Government.

The Minister of Industry and Trade and the Electricity Authority shall preside over, with relevant units and EVN, the review, calculation, and proposal of amendments to Decision No. 14/2025/QD-TTg of the Prime Minister on the structure of retail electricity prices based on current legal bases and the implementation process in practice.

At the same time, urgently develop a Circular amending Circular 16 to regulate the method of building a price framework. Minister Nguyen Hong Dien emphasized that this must be done in parallel with the roadmap for building a price framework for the 2-component electricity price mechanism. In particular, EVN must play a leading role, propose a method for building a price framework, ensuring the principle of calculating correctly, fully, and calculating all costs in the process of electricity production and trading, including transmission costs;

Continue to advise the Government (or Minister) to decide on the target group to apply the 2-component electricity price mechanism. EVN needs to hire consultants, build transparent and smooth operating software, complete before October 20, 2025 but must closely follow the Electricity Law, Resolution 70, and the upcoming Decree of the Government implementing Resolution 70 of the Politburo.

“In the immediate future, this mechanism will apply to large electricity users, without exception. From now until December 31, two bills will run in parallel, one according to the current mechanism for actual payment, one according to the two-component mechanism for customers to refer to and self-adjust,” said the Minister of Industry and Trade.

For EVN, the Group needs to proactively hire consultants and build management software to ensure transparent and smooth operations, to be completed before October 20.

In parallel with completing the 2-component electricity price project, from September 15, the Minister of Industry and Trade requested full communication about the 2-component electricity price so that people can understand.

“We have no time to hesitate. This is the will and aspiration of the entire industry. Once we have a complete political and legal basis, the remaining thing is to take decisive action,” the Minister of Industry and Trade emphasized.

Currently, Vietnam is applying a single-component retail electricity price mechanism, which is based on the electricity used. The two-component retail electricity price is based on the capacity price and the electricity price.

Experts believe that converting the single-component electricity price to a two-component electricity price at the present stage is necessary and appropriate to collect the correct and sufficient costs of the electricity industry to provide electricity to electricity customers (including costs of using electricity industry infrastructure (power source, grid) and electricity costs). This creates transparency and fairness among electricity customers, reflecting the true nature of electricity usage by customers in the electricity system. This creates transparency and fairness among electricity customers, reflecting the true nature of electricity usage by customers in the electricity system. However, this is a method that has never been applied in Vietnam, and will fundamentally change the electricity industry and electricity prices, so it takes time to research, develop and assess specific and thorough impacts.

According to Dr. Nguyen Huy Hoach (Vietnam Energy Institute), the two-component electricity price is a breakthrough in electricity price policy, applied by many countries in the world and mostly applied to large electricity users for production and business purposes. In particular, the two-component electricity price will bring fairness to electricity users for production and business purposes.

Energy expert Ngo Duc Lam, former Deputy Director of the Energy Institute, said that with the effective revised Electricity Law, Decree 55 and recently Decree 70 of the Politburo, policies and mechanisms on electricity prices need to change towards market approach. Without a two-component electricity price mechanism, calculating the voltage selling price according to the direct buying and selling mechanism will be difficult and difficult to implement successfully. It needs to be implemented soon to move towards building a truly competitive electricity trading market.

Source: https://cand.com.vn/Xa-hoi/bo-cong-thuong-chot-phuong-an-ap-dung-gia-dien-2-thanh-phan-i780853/