Electricity price increases by 4.5% from today, EVN will have an additional 3,200 billion in 2023

At the information exchange session on electricity price adjustment on the afternoon of November 9, Mr. Nguyen Dinh Phuoc, Chief Accountant of Vietnam Electricity Group (EVN), said: In 2023, there are a number of input parameters that affect EVN's business situation. Hydropower output, which is a cheap source of electricity, has decreased sharply this year; and input fuel prices are still high compared to 2021.

In particular, high coal prices are still weighing on the group's electricity purchase costs. The price of imported coal gbNewC increased 2.97 times compared to 2020, increased 1.3 times compared to 2021; HSFO oil price increased 1.86 times compared to 2020 and increased 1.13 times compared to 2021.

Coal purchased from Vietnam National Coal - Mineral Industries Group and Dong Bac Corporation also increased from 29.6% to 49% (depending on the type of coal) compared to the coal price applied in 2021.

Electricity price.jpg — Electricity price increased by 4.5%, to 2,006 VND/kWh. Photo: Hoang Giam

The increase in coal, oil and gas prices has also increased the cost of purchasing coal and gas-fired electricity for this group. Because in 2023, coal and gas power plants will account for 55% of the total electricity output of the entire system.

That is why the cost of electricity production in 2023 is estimated at VND2,098/kWh, higher than the average retail price of electricity by VND178/kWh. In other words, the purchase price is higher than the selling price of electricity.

With the electricity price increase to 2,006 VND/kWh (up 4.5%), it can be seen that it is still lower than the cost price as announced by EVN.

“The average retail electricity price last year was also adjusted up by 3% on May 4. As of today (November 9), there is enough basis for the time between two electricity price adjustments to be 6 months,” said Mr. Phuoc.

According to EVN representative, this electricity price increase will help EVN increase revenue in 2023 by 3,200 billion, partly reducing the difficulties of 2023.

Mr. Nguyen Quoc Dung, Head of EVN's Business Department, informed: The group that feels most affected by the electricity price adjustment is the poor and the disadvantaged in society. This is the group of people who use little electricity, less than 50kWh. Poor households are all supported with cash equivalent to 30kWh. Policy households are all supported with 30kWh on the condition that they use less than 50kWh of electricity in a month.

“This change in electricity prices has received a lot of support from the Government and has almost no impact on the poor and disadvantaged in society,” Mr. Dung assessed.

As for households that use a lot of electricity, from 400 units or more, Mr. Dung calculated the additional electricity bill to be 55,600 VND/month. These are people with conditions, so the impact of electricity prices on this group will be less.

Mr. Tran Viet Hoa, Director of the Electricity Regulatory Authority ( Ministry of Industry and Trade ) shared: To ensure electricity price adjustment, avoid jerkiness, have a specific roadmap, reflect the breath of the market, the electricity price adjustment cycle will be calculated to be reduced from 6 months to 3 months.

According to the revised draft Decision 24, there will be not only upward adjustments but also downward adjustments depending on input parameters and market fluctuations.

“The adjustment of electricity prices will be based on market parameters. This adjustment of electricity prices by EVN is still in accordance with Decision 24 issued by the Prime Minister in 2017,” said Mr. Tran Viet Hoa.

Electricity price increased by 4.5%, to 2,006 VND/kWh. This is the second time electricity price increased in 2023. The electricity price adjustment will officially apply from today, November 9, 2023.

Source