EVN explains the reason for the loss of 44,000 billion VND, retail price of electricity sold lower than cost price

Information from Vietnam Electricity Group (EVN) released on September 9 said that amending Decree 72 of the Government on the mechanism and time for adjusting average retail electricity prices, which allows EVN to compensate for losses, is necessary and in accordance with regulations.

EVN provides further information on factors causing losses in the electricity sector - Photo: QUANG DINH

According to EVN, in the period of 2022-2023, there were approximately 44,000 billion VND in costs that were not included or not fully included in electricity price adjustments. This has resulted in EVN not being fully compensated for input costs and has affected the preservation and development of state investment capital in the enterprise.

EVN lacks funds for investment and capital preservation.

In addition, in the coming period, EVN will implement large-scale, important, and urgent projects such as the Ninh Thuan 1 Nuclear Power Plant, the Quang Trach 2&3 LNG Power Plant, the Bac Ai Pumped Storage Hydropower Plant, and other hydropower plant expansion projects, offshore wind power projects, etc. With the investment plan as mentioned above, the capital investment needs to implement these projects in the coming period are very large.

Meanwhile, the amendment to the above decree is based on the Electricity Law of 2024 and Law No. 68/2025 - Law on Management and Investment of State Capital in Enterprises, so allowing the inclusion of costs that have not been included or have not been fully included is necessary and appropriate according to the regulations.

EVN further explained the reasons for the losses in its production and business operations, stating that in the electricity cost structure, power generation accounts for 83%; the remaining stages (transmission, distribution - retail, industry management - support) account for approximately 17% of the cost and are trending downwards due to cost savings.

However, in the period of 2022-2023, the prices of input fuels for electricity production (coal, oil, gas), and foreign exchange rates increased dramatically due to the geopolitical events between Russia and Ukraine, and the fuel demand during the post-COVID-19 pandemic recovery phase.

Furthermore, due to the influence of weather and hydrological factors, the proportion of hydropower production is decreasing (hydropower is a cheap source of electricity), so it is necessary to replace it with more expensive sources of electricity.

In fact, the total electricity purchased from power plants directly under EVN accounted for 46% in 2022 and 42% in 2023 of the total system output, with the remainder purchased by EVN from external partners.

Selling below cost continuously for two years.

EVN stated that it has consistently and optimally reduced major repair costs (by at least 10%). Therefore, in 2022, the cost of electricity production and business was 2,032.26 VND/kWh (of which the cost of electricity generation per commercial unit was 1,698.45 VND/kWh, equivalent to 83.57% of the cost), while the average selling price of commercial electricity was 1,882.73 VND/kWh. Thus, the selling price of electricity was 149.53 VND/kWh lower than the cost of electricity .

In 2023, the cost of electricity production and business was 2,088.90 VND/kWh (of which the cost of electricity generation per unit of commercial electricity was 1,744.12 VND/kWh, equivalent to 83.49% of the cost), while the average selling price of commercial electricity was 1,953.57 VND/kWh. Thus, the selling price of electricity was 135.33 VND/kWh lower than the cost of electricity.

In the context of retail electricity prices not being sufficient to cover input costs, EVN stated that for 2022, in order to stabilize the macroeconomic situation and ensure social welfare, the average retail electricity price will remain unchanged since the last adjustment on March 20, 2019, despite increases in production and business costs.

In 2023, EVN stated that, following directives from competent authorities regarding the management of electricity prices in a gradual and smooth manner, avoiding shocks to the economy, retail electricity prices were adjusted twice: on May 4, 2023 (a 3% increase) and November 9, 2023 (a 4.5% increase). However, these adjustments were significantly lower than the calculated average electricity price.

In addition, for the period of 2020-2021, EVN implemented electricity price reductions, electricity bill reductions, and electricity bill support in 5 phases with a total amount of VND 15,233.1 billion for electricity customers affected by COVID-19.

This corporation also undertakes the task of supplying electricity to ethnic minorities, remote areas, border regions, and islands, resulting in losses of hundreds of billions of dong from electricity sales.

This has resulted in approximately 44,000 billion VND in costs not fully accounted for in the electricity price adjustments during the 2022-2023 period.

In fact, the electricity prices for these years have been subject to inspections organized by the Ministry of Industry and Trade, and the State Audit Office has also conducted a thematic audit on "Electricity price management during the period 2022 - 2023".

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Source: https://tuoitre.vn/evn-giai-thich-nguyen-nhan-gay-lo-44-000-ti-dong-gia-ban-le-dien-ban-thap-hon-gia-thanh-20250909145402627.htm