VIETNAM WHOLESALE ELECTRICITY MARKET 2019vepg.vn/wp-content/uploads/2019/09/NLDC_VWEM-2019.pdf · In 2019, EVN will continue to perform the spot electricity payment function until

VIETNAM WHOLESALE

ELECTRICITY MARKET 2019

Content

02. Key features of VWEM 2019

04. VWEM implementation in Q3/2019 & Q4/2019

03. Operational result of Q1/2019 & Q2/2019

01. Preparation background

PREPARATION BACKGROUND

01

National Load Dispatch Center 4

Legal framework

Decision 63/2013/QĐ-TTg: Decision on the roadmap, conditions and sector structure for

establishment and development of power market grades in Vietnam

Decision 8266/QĐ-BCT: Approval of the detailed design of Vietnam's competitive

wholesale electricity market

Decision No. 3038 / QD-BCT dated August 10, 2018 of the Minister of Industry and Trade

on the plan to operate the wholesale electricity market in 2019.


Regulatory framework

Cost regulation (cross-subsidizing) between PCs

According to Decision 8266/QĐ-BCT: cost regulation (cross-subsidizing) between PCs through

a balance account or equivalent mechanism. This appeared to be new mechanism that needs

to be researched carefully.

In 2019: the cost regulation between the PCs will continue to be implemented through the

Bulk Supply Tariff mechanism of EVN.

Contract allocation

According to Decision 8266/QĐ-BCT: allocate all existing contracts (CfD) between EVN and

Generation company to PCs.

In 2019, only a number of contracts will be allocated to PCs due to the absence of a regulatory

mechanism between the PCs through the Balance Account.

In 2019, EVN will continue to perform the spot electricity payment function until NLDC is

accounted independently and the mechanism of separating payment of CFD contracts and

spot market is established.


VWEM 2019 objectives

Implement the operation of VWEM 2019 under Decision 8266/QD-BCT subjects to the

constraints on apparent conditions;

Improve mechanisms to participate in electricity market for generation company;

Evaluate the mechanisms of VWEM 2019; completing the legal framework, IT

infrastructure to gradually implement VWEM under Decision 8266/QD-BCT.

KEY FEATURES OF VWEM 2019

02


The operating mechanism

Generators: participate in electricity market similar to the on-going generation market;

PCs:

Purchase a part of the electricity consumption (off-take from the grid) on the electricity

market. The rest of the electricity consumption is purchased from EVN under the mechanism

of BST;

Continue to implement the contract allocation of Phu My 1 and Phu My 4 power plants with

the same mechanism as 2018;

Directly sign PPAs with 04 new power plants (go into operation in 2018 and 2019).


Signing contracts with new power plants participating in VWEM

In 2019, there are expected to be 04 new power plants participating in the power market

to sign contracts directly with the PCs: Thai Binh 1, Vinh Tan 4, Duyen Hai 3 MR, Vinh Tan 4

MR (From the first day of the month following the month of COD).

Principles of negotiation and signing contract:

EVN negotiates with 05 PCs as regulated in Circular 56/2014/TT-BCT and Circular 13/2017/TT-

BCT of the Ministry of Industry and Trade and other Circulars (if any).

Each new power plant signs 05 contracts with 05 PCs. The contract quantity (Qc) of the power

plant with a PC is directly proportional to the power consumption (load) of the PC. The

contract price is the negotiated price agreed between 06 parties.

National Load Dispatch Centre 10

Current VWEM Arrangements under Circular No. 45 (for 2019)

Generation

Indirect Trading Generators

scheduled by SMO

Scheduled by SMO

Direct Trading

Generators

PV Power

TKV

EVN GENCO 1

EVN GENCO 2

EVN GENCO 3

SMHPs

Equitised EVN

GENCOs

BOTs

Single Buyer

Electric Power Trading

Company (EPTC)

SPPA (CfD)

SPPA (CfD)

SPPA (CfD)

SPPA (CfD)

SPPA (CfD)

SPPA (CfD)

PPA

Hanoi PC

Northern PC

Central PC

Southern PC

HCM PC

BST

BST

BST

BST

BST

Non Contestable Customers

Tariff

Tariff

Tariff

Tariff

Tariff

Spot Market

Sp

ot

reve

nu

e

Spot costsSMO

Prices

Bids

Dispatch

Dispatch

Transmission DistributionPower Power Power

HPC End User

NPC End User

CPC End User

HCMPC End User

SPC End User

IPPsSPPA (CfD)

A limited number of PPAs have been signed between PCs and EVN’s Generators in 2019

OPERATIONAL RESULTS IN THE FIRST 6 MONTHS OF 2019

03


Generation Installed Capacity & Energy Production for First 6 months

96 direct trading power plants; 25549;

48%

110 indirect trading power plants; 15146;

28%

11 strategic hydro power plants; 8442;

16%

Other; 4467;

8%

Generation Installed Capacity by Market Participation Status

96 direct trading power plants 110 indirect trading power plants

11 strategic hydro power plants Other

Hydro26%

Coal52%

Oil&Gas20%

Others2%

CategoryEnergy production

(bil. kWh)(%)

Hydro 30.3 26 %

Coal 59.6 52 %

Oil & Gas 22.8 20 %

Others 1.98 2 %

Total 114.7 100%


Operational results - System

System Operation difficulty

The rate of load growth is still high (approximately 10% annually)

The installation of plants and grid is slow and inconsistent. It does not meet proposed

schedule causing overload and electricity shortage on the power system.

Uncertainty of hydro power plant with many constraints in operation and irrigation

Limited fuel for electricity generation (coal, gas…)


Operational results - System

System Operation difficulty


Renewable Energy

By the end of June 2019, the total number of renewable power plants in operation was 91

(including 82 solar power plants, 06 wind power plants and some other biomass) with a

total installed capacity of 4900 MW.

1,5

36

3,0

94

4,9

04

6 8 10 1013

16 16

29

57

91

0

10

20

30

40

50

60

70

80

90

100

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1/9/2018 1/10/2018 1/11/2018 1/12/2018 1/1/2019 1/2/2019 1/3/2019 1/4/2019 1/5/2019 1/6/2019

No

. of

pla

nts

MW

82

6

3

0 20 40 60 80 100

Điện mặt trời

Điện gió

Điện sinh khối

No. of plants

4463.74 MW, 91%

270.8 MW, 6%

169 MW, 3%

INSTALLED CAPACITY

Biomass

Wind

Solar


Renewable Energy

The total renewable power production reached about 607 billion kwh (about 20.23 million

kwh per day), contributed 2.8 percent of the total power production of national power

system.

13,608 28,977 46,750

77,286

191,720

483,743

596,689 635,944

579,967

558,515 550,806

560,489

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1 2 3 4 5 6 7 8 9 10 11 12

MW

h

Month

Biomass Wind Solar


Operational results – Hourly market Price


MonthSMP

(VNĐ/kWh)CAN

(VNĐ/kWh)No. of hour reach

Celling priceFMP

(VNĐ/kWh)CFMP

(VNĐ/kWh)Max thermal bid

(VNĐ/kWh)

January 868 130 52 998 1017 1285

February 884 126 172 1010 1038 1345

March 1152 133 423 1285 1392 1345

April 1085 138 312 1222 1257 1347

May 1089 140 311 1229 1258 1394

June 1177 152 331 1329 1350 1418

1425 1295 2255 1986 2282 2347

868 8841152 1085 1089 1177

998 1010

1285 1222 12291329

1017 1038

13921257 1258

1350

0

500

1000

1500

2000

2500

0

500

1000

1500

2000

2500

3000

3500

4000

4500

January February March April May June

Bill

ion

VN

D

VN

D/k

Wh Spot payment

CFMP

FMP

SMP

Operational results – Full market Price


Contract Quantity (Qc) versus Metered Quantity (Qm)

Qc Qm

785.6 774.8

1,045.4

2,868.12,972.3

876.0 846.9

1,170.6

3,046.2

3,251.5

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

CPC HANOI HCMPC NPC SPC

Mill

ion k

Wh


Operating results

The capability of PCs and market participants in the VWEM has been significantly

improved

CfD contracts, market settlement mechanism;

Improve knowledge of electrical system operation and skills through training and practical

operations.

Demand forecasting ability has been developed

The load forecast is noticeably improved, leaving only a few unstable moments due to the

large proportion of the residential load, affected by unpredictable factors such as weather,

especially in abnormal weather periods.

Complete the collection, publication and checking of metered data: with over 99% of

accurate data collected by NLDC

Information technology infrastructure operates stably, meeting operation requirements

VWEM IMPLEMENTATION IN THE NEXT 6 MONTHS OF 2019

04


Electricity production for 2nd half of 2019

Electricity (bil.kWh)

2nd half of 2018Plan of MOIT for 2nd half of

2019

Updated Schedule

Hydro 44.6 45.7 (3%) 36.5 (-18%)

Coal 42.9 55.9 (30%) 61.4 (43%)

Gas turbine 18.5 20.5 (11%) 20.7 (12%)

Oil (DO & FO) 0.0 - 1.6

Renewable 0.3 1.9 (537%) 3.9 (1232%)

Total 106.3 124.0 (17%) 124.2 (17%)

44.6 45.7 36.5

42.9 55.9

61.4

18.5

20.5 20.7 0.0

- 1.6

0.3

1.9 3.9

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

6 months late of 2018 Plan of MOIT 2019 Updated schedule

Tỷ k

Wh

Hydro Coal Gas turbine Oil (DO & FO) Renewable


Forecast market price and spot payment

2576

1884

2500

1734

22691939

1490 1460 1456 1485 15131428

0

200

400

600

800

1000

1200

1400

1600

0

500

1000

1500

2000

2500

3000

7 8 9 10 11 12

VN

D/k

Wh

Bill

ion

VN

D

Spot payment CFMP


Contract Quantity (Qc) versus Expected Metered Quantity (Qm)

705 747945

2745 2723

785 8311053

3058 3036

0

500

1000

1500

2000

2500

3000

3500

CPC HANOI HCMPC NPC SPC

Qc Qm


Shorten the trading and dispatching interval from 60 min to 30 min

5,800

6,000

6,200

6,400

6,600

16:00

17:00

18:00

19:00

Luzo

n D

eman

d (M

W)

Hour of Day

30-min 30-min 30-min 30-min 30-min 30-min

30 min load forecast

Secured system

Secured system Secured system

Secured system

Secured system

Error between load forecast and actual source

Ancillary services required

Thank You!

Documents

VIETNAM WHOLESALE ELECTRICITY MARKET 2019vepg.vn/wp-content/uploads/2019/09/NLDC_VWEM-2019.pdf · In 2019, EVN will continue to perform the spot electricity payment function until