According to the trade and industry ministry, based on studying the real situation of Vietnam's electricity industry, targets and capacity of developing the electricity market, the allowed legal system together with direct support of international consultants and opinions of World Bank, Asian Development Bank (ADB) and others, the model that is selected for the official competitive electricity market in Vietnam is the cost-based-pool (CBP).

With such a model, all electricity plants with capacity of 30 MW or higher except for BOT electricity plants having service and consumption contracts for many years are required to participating into offering prices in the market. Electricity generating plants will sign electricity trading contracts with only one buyer.

Different kinds of electricity plants will have to offer prices in the market in the upcoming time based on different principles with different ceiling and floor prices in order to avoid unexpected hike of electricity prices in the market.

The trade and industry ministry also puts forward three scenarios of restructuring the electricity industry for developing the competitive electricity market, ensuring to strictly following the CBP model.

Electricity prices will be built by the trade and industry ministry's electricity regulation department under Decision 153/2008/QD-TTg.

Accordingly, the department is liable to consult the trade and industry ministry about state management and regulation for electricity activities.

The department is also required to submit the trade and industry ministry retail and wholesale electricity prices, lists of retail and wholesale electricity prices and regulations, requirements, procedures on granting, amending, supplementing, revoking and managing electricity operating licenses and others.

Tien Phong - December 2, 2008