Could wind power imports from Laos fall to 5.51 cents/kWh?

EVN proposes options for importing wind power from Laos - Photo: T.TR.

The Ministry of Industry and Trade has requested the Vietnam Electricity Group (EVN) to finalize the documentation regarding the policy on electricity purchase and sale, the plan for connecting the Truong Son wind power plant from Laos to Vietnam, as well as selling electricity in the reverse direction from Vietnam to Laos for testing and connection purposes.

Accordingly, the Ministry of Industry and Trade requested EVN to clarify further its ability to receive and release the capacity of the Truong Son 2 wind power plant, which depends on the progress and operation of the 220kV grid connected to the Truong Son wind power plant.

Carefully evaluate the factors to propose a pricing mechanism for electricity imports.

EVN, in coordination with the investor, is carefully reviewing and calculating to ensure safe operation, in accordance with the plant connection plan approved by the Prime Minister .

Simultaneously, assess the socio-economic effectiveness of the project in the event that part or all of it becomes operational after December 31, 2025, and propose a corresponding electricity pricing mechanism to ensure feasibility.

The corporation needs to update on the progress and status of power source and grid deployment in the region, including power sources imported from Laos.

Carefully assess the planned commissioning schedule of the Truong Son 2 Wind Power Plant project and the connecting transmission lines to ensure feasibility and meet electricity supply needs.

EVN is also tasked with coordinating with the National Power System Operation and Market Company (NSMO) and the National Power Transmission Corporation (EVNNPT) to assess the risk of electricity shortages in Vietnam's power system in 2025-2027, especially in the North, and the necessity of importing electricity from Laos in general and the Truong Son wind power plant in particular to ensure electricity supply.

Regarding the sale of electricity for testing purposes and for self-consumption during the testing and operation of the Truong Son wind power plant, the Ministry of Industry and Trade requires research and calculation of the appropriate power demand based on the characteristics and technical operating requirements of the project.

Previously, at the request of the Ministry of Industry and Trade, EVN was tasked with calculating the price framework for electricity generation imported from Laos for the period from December 31, 2025. The Electricity Trading Company (EPTC), the unit assigned to carry out this task, stated that there are currently no regulations on calculating the price framework for imported electricity sources.

Therefore, EPTC proposes reviewing the pricing framework for electricity imported from Laos with specific criteria.

Research appropriate pricing.

This includes a ceiling price (maximum price) for importing electricity from Laos to Vietnam, with the project approved by the Prime Minister, which will be 6.95 cents/kWh, applicable to power plants operating before December 31, 2025.

However, since wind power is an unstable source of electricity, EPTC recommends that, in addition to determining the price ceiling for imported electricity generation, a sliding price adjustment to 2025 should be applied based on an average annual reduction in investment costs of 3.46%.

Accordingly, the price framework for importing electricity from Laos, applicable from December 31, 2025, for wind power plants is 5.51 US cents/kWh, taking into account the reduction in investment costs.

Based on EPTC's calculations, in May 2024, EVN reported to the Ministry of Industry and Trade and added alternative pricing options for electricity generated from Laos at 5.51 cents/kWh and 6.4 cents/kWh to seek approval for a suitable pricing framework.

According to EVN, although Vietnam always desires low electricity purchase prices to cover its electricity costs, the issuance of electricity price frameworks and the method of calculating electricity prices for each electricity import project from Laos directly affect Vietnam's opportunities to purchase electricity.

In addition, diplomatic factors, ensuring fairness between domestic and foreign investors, encouraging electricity imports, and achieving cooperation goals between the two governments should be considered when deciding on an appropriate price that meets these criteria.

In July 2024, EVN continued to submit proposals related to importing electricity from the Truong Son 2 wind power plant with a capacity of 350MW.

The project will import electricity on a relay basis via the 220kV double-circuit Truong Son - Do Luong wind power line. We request that the Ministry promptly approve the electricity purchase price framework, electricity pricing method, and model power purchase agreement to implement the import.

Source: https://tuoitre.vn/nhap-khau-dien-gio-tu-lao-co-the-xuong-muc-5-51-cent-kwh-20240902114419136.htm