The Ministry of Industry and Trade–the MoIT–has set a maximum price the state power provider Electricity Vietnam–or EVN–can pay for power generated by LNG power plants at VND 2,590.85 per kilowatt. There is no minimum price.
In Vietnam, for power projects, the MoIT typically sets a maximum and minimum price within which EVN then negotiates with individual power producers. It’s not clear what the purpose of these price brackets is and announcing the maximum price EVN can pay in advance seems counterintuitive to the negotiation process. Regardless this is the process through which most power project prices are determined.
Also worth noting, is that the LNG price bracket is much higher than that of renewables. For wind power projects it’s between US 8.5 cents and US 9.8 cents per kilowatt-hour if they were online before November 1, 2021. If they went online after that, the bracket comes down to between US 6.42 cents and 7.34 cents per kilowatt hour.
It’s also worth considering that EVN has been struggling to manage its finances of late. As of January, it was losing about VND 142.5 per kilowatt-hour sold on the back of higher input prices but an aversion to raising electricity prices. That said, in this current context, EVN will need to pay much less than the maximum price for LNG or will need to raise retail electricity prices to accommodate this new, more expensive, addition to Vietnam’s energy mix.
See also: Electricity in Vietnam: Foreign Investor Cheat Sheet 2024