EVN expects the cost of electricity production of 2023 is still higher than retail price by 9.3% although fuel prices lowered for the past few months.
EVN’s electricity production cost structure shows that generation cost accounts for 82.8%. EVN’s representatives said this year, due to rising fuel prices, the cost of coal-fired and gas power has increased very high.
According to EVN, this year has seen a significant increase in the cost of coal-fired and gas power due to the surge in fuel prices. (Photo: EVN)
Specifically, the price of imported coal this year is expected to increase by 186% compared to 2020. Mixed coal is expected to increase between 29.6% and 49.8%, which varied from different types of coal and companies. As for brent crude oil, EVN expects it to increase by 86% compared to 2020. In addition, the Nam Con Son gas output was declined sharply which made many gas-thermal power plants turned to other suppliers with higher prices. Not to mention, the US dollar kept strengthening against Vietnamese dong which is expected to rise by 4% compared to 2021.
The change of electricity generation structure makes situation even worse. For example, the hydroelectric power generation, which is cheaper in Vietnam, decreased by about 13.9 billion kWh. Though many transitional solar and wind power plants that have been put into operation since this June, along with other 21 power plants with total capacity of 1201.42 MW, EVN’s cost of renewable energy hasn’t changed much and always higher than average sale price.
EVN said the cost of transmission, delivery, sale and others reduced through years. Those operation cost is expected to lower to 347 VND/kWh this year from 392.9 VND/kWh in 2020. EVN also took some cost-saving measures which cut 10% of normal expenditure and slashed 20%-30% of main fixed asset maintenance fees.
EVN estimates that the cost of power generation is about 2,098 VND/kWh which is still higher than average sale price by 9.3%. The EVN has raised retail price by 3% since May 4 this year, but it can only partially solve the problem. The EVN is still at a loss.
Recent years, EVN is not in a good shape and the place of market is unstable which casts doubts by government and people. From the power generation side, EVN is no longer dominating the market. The private operators are taking 42% of a total capacity of 80 thousand GW this year compared to 9% of 2021. The nation-owned companies such as EVN, PVN, VINACOMIN are taking 47%.
From the transmission and delivery side, EVN is still operating 500kV and 220kV grid nationally. But the power failure of northern part of Vietnam this year brought out the difficulty of redistributing renewable energy from south. As from the sale side, EVN and its subsidiaries’ market share are still up to 92%.