VINACHEM

Electricity prices will likely rise next year due to increasing power generation costs triggered by price hikes in coal, fuel, and water environment taxes, officials from the Electricity Regulatory Authority of Vietnam (ERAV), under the Ministry of Industry and Trade, said at a meeting held on November 30 in Hanoi, Nguoi Lao Dong newspaper reported.

Specifically, Vietnam National Coal and Mineral Industries Group (TKV) is seeking to raise coal prices sold to coal-fired plants by 5%, placing much pressure on the Vietnam Electricity Group (EVN) to consider hiking power prices.

Addressing the meeting to announce EVN’s power generation costs and business performance in 2017, Nguyen Anh Tuan, head of ERAV, said the ministry and EVN are seeking to determine the impacts of the proposed power price hikes on residents, economic growth, consumer prices, and especially cement and steel industries that consume large volumes of power.

Based on their assessment, the ministry will send a report to the Government and the Steering Committee for Price Management to map out a plan of power price hikes for next year.

As such, EVN will adjust power prices if power generation costs rise by 3-5%, while the ministry takes charge of the price adjustment if the generation costs increase by 5-10%. The prime minister will decide the price hike rates if the costs exceed 10%, Tuan said.

Regarding the coal shortage faced by coal-fired power plants, typically with the Quang Ninh thermal power plant, the ministry has ordered TKV and Dong Bac Corporation to adopt appropriate solutions to ensure sufficient coal supplies for the power industry, in addition to considering importing coal from foreign countries.

Also, a number of thermal power plants, including Vinh Tan 1, Thai Binh 1 and Thang Long, have come into operation, resulting in a rapidly rising demand for coal, said Dinh Quang Tri, EVN deputy general director.

Accordingly, EVN will need 54 tons of coal as planned, but TKV and Dong Bac Corporation can supply only 46 tons, said Tri. As a result, EVN and the coal suppliers agreed, following discussions, to import the remaining eight tons of coal, with EVN’s subsidiaries buying four tons and TKV importing the remainder.

The eight tons of coal will then be resold to EVN, Tri said.

Tuan noted that thermal power plant operators will sign long-term contracts for purchasing coal with TKV and Dong Bac Corporation, to actively control the production of power. - VNN -