New power projects are not cheap.

Ensuring electricity supply to serve socio -economic development and people's daily life. Photo: Duc Thanh

New, Big Power: No Low Prices

At the recently held 2025 Annual General Meeting of Shareholders, Vietnam Oil and Gas Group (PV Power) said that in 2025, the base year power purchase contract price (Pc) of Nhon Trach 3 and 4 Power Plants is expected to be 3,006 VND/kWh.

Thus, with the average retail electricity price of VND 2,103.11/kWh (excluding VAT) applied from October 11, 2024, when Vietnam Electricity Group (EVN) buys electricity from Nhon Trach 3 and 4 Power Plants to resell to the economy, it will have to compensate for a loss of about VND 900/kWh.

In 2025, the planned electricity output of Nhon Trach 3 and 4 Power Plants is 2,403 billion kWh. If everything goes as planned and there is nothing unusual about the electricity output as well as the price of imported LNG to calculate the above Pc electricity price, when mobilizing electricity output from Nhon Trach 3 and 4 Power Plants, EVN will have to compensate for a loss of more than VND 2,162 billion.

Most recently, the Ministry of Industry and Trade issued a series of new electricity purchase price frames for 2025. Among these, the types of power plants with maximum electricity purchase prices lower than the average retail electricity price issued by the State currently applied include hydropower, concentrated solar power with and without battery storage, wind power (onshore and nearshore), coal-fired thermal power and electricity imported from Laos. Meanwhile, types of power sources such as waste-to-energy, biomass power, electricity imported from China and electricity from domestic gas all have higher prices than the average retail electricity price before May 10, 2025.

In fact, EVN is still the only wholesale electricity buyer with the task of ensuring electricity for the economy. There are not many options for taking appropriate steps to balance EVN's finances and at the same time create incentives to attract investors to invest in electricity projects.

Coal and gas electricity account for an increasingly large proportion

Speaking to the press regarding this electricity price adjustment, Mr. Vo Quang Lam, Deputy General Director of EVN, said that to ensure electricity supply for socio-economic development and people's daily life, EVN has been implementing the National Power Supply and Operation Plan for 2025.

The growth rate of commercial electricity in 2025 is expected to be about 12.2%, equivalent to the total electricity output of the entire system in 2025 increasing by about 33.6 billion kWh compared to 2024.

Accordingly, the growth rate of commercial electricity in 2025 is expected to be about 12.2%, equivalent to the total electricity output of the entire system in 2025 increasing by about 33.6 billion kWh compared to 2024.

With the power source structure in 2025, low-cost hydropower can only provide about 25% of the total system output; the remaining 75% of output is provided by high-cost power sources such as coal, gas, oil, renewable energy, etc.

The current power source structure also causes the system's additional power output (33.6 billion kWh) to basically have to be mobilized from high-cost power sources, such as oil-fired thermal power, liquefied natural gas (LNG) turbine thermal power, and imported coal-fired thermal power.

It is worth mentioning that the foreign exchange rate (USD) has been unpredictable and increasing recently. This has affected the cost of electricity generation (accounting for about 83% of the cost of electricity production).

Before the electricity price increase in October 2024, according to the report of the Ministry of Industry and Trade, EVN's electricity production and business activities in 2023 (income from financial activities and from the sale of reactive power) recorded a loss of VND 21,821.56 billion (excluding income from other production). Amounts not yet accounted for in the cost of electricity production and business in 2023 are about VND 18,032.07 billion, including the remaining exchange rate difference implemented according to the electricity purchase and sale contracts of the remaining power generation units in 2019 and the exchange rate difference according to the electricity purchase and sale contracts for the years 2020 - 2023.

As for 2024, the Ministry of Industry and Trade currently has no information on electricity price inspection activities or EVN's business results.

Source: https://baodautu.vn/du-an-dien-moi-khong-co-gia-re-d281753.html