DECISION

ON APPROVAL FOR PLAN FOR OPERATION OF PILOT COMPETITIVE WHOLESALE ELECTRICITY MARKET IN 2016

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to the Law on Electricity dated December 03, 2004 and Law on amendments to some articles of the Law on Electricity dated November 20, 2012;

Pursuant to the Government’s Decree No. 95/2012/ND-CP dated November 12, 2012 defining functions, tasks, entitlements and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Decision No. 63/2013/QD-TTg dated November 08, 2013 of the Prime Minister on roadmap, conditions and structure of electricity sector for formation and development of different levels of electricity market in Vietnam;

Pursuant to the Decision No. 8266/QD-BCT dated August 10, 2015 of the Minister of Industry and Trade on approval for detailed design of Vietnam's competitive wholesale electricity market;

At the request of the Director of the Electricity Regulatory Authority,

...

...

...

Article 1. The plan for operation of pilot competitive wholesale electricity market in 2016 is approved. To be specific:

1. Targets

a) Pilot the first step of electricity wholesale competition where multiple sellers and many buyers take part in. Generators, power corporations, National Load Dispatch Centre, Electric Power Trading Company and relevant units shall carry out pilot transactions in the competitive wholesale electricity market;

b) Pilot distribution of power purchase agreements signed between generators and EVN to 05 power corporations. Pilot assignment given to power corporations to manage power purchase agreements with generators.

2. Rules

a) Operate electricity market and make real payment to generators as prescribed in the Circular No. 30/2014/TT-BCT dated October 02, 2014 of the Minister of Industry and Trade on operation of competitive electricity generation market, Circular on amendments to some articles of the Circular No. 30/2014/TT-BCT on operation of  competitive electricity generation market and Circular No. 56/2014/TT-BCT dated December 19, 2014 of the Ministry of Industry and Trade on methods for determining electricity generation costs and procedures for inspecting power purchase agreements and other relevant documents promulgated by the Ministry of Industry and Trade;

b) Simulate the following tasks on paper: (i) Distribute power purchase agreements signed between generators and EVN to 05 power corporations; (ii) Consider signing vesting agreements between 05 power corporations and generators; (iii) Consider addressing issues that arise and make payment between 05 power corporations and generators in accordance with regulations on electricity market.

3. Pilot competitive wholesale electricity market participants

a) Affiliates participating in the competitive electricity generation market;

...

...

...

4. Mechanism for operation of pilot competitive wholesale electricity market in 2016

a) Consider distributing the signed power purchase agreements between generators and EVN to power corporations in 02 phases. To be specific:

- Phase 1 (from January 01 to the end of June 30, 2016): 01 agreement with a hydropower plant, 01 agreement with coal-fired power plants and 01 agreement with gas-fired power plants provided in the Appendix 2 hereof will be distributed to power corporations. During operation of pilot competitive wholesale electricity market in 201, according to actual conditions, the Electricity Regulatory Authority of Vietnam (hereinafter referred to as “ERAV”) will consider increasing the number of agreements distributed to power corporations;

- Phase 2 (from July 01 to the end of December 31, 2016): consider and pilot methods of distributing agreements as prescribed in the Decision No. 8266/QD-BCT dated August 10, 2015 of the Minister of Industry and Trade on approval for detailed design of Vietnam's competitive wholesale electricity market.

b) Forecast load: power corporations shall forecast load to serve payment and preparation of the contractual power output (Qc) chart (annual Qc, monthly Qc and hourly Qc) according to Phase 2;

c) Collect and manage metering data within the boundary between transmission grid and distribution grid:

- The National Load Dispatch Centre shall remotely collect, aggregate and store metering data measuring within the boundary between transmission grid and distribution grid, between power corporations and use such data for making payment in the spot electricity market;

- The National Power Transmission Corporation and 05 power corporations shall collect on-site metering data under their management and provide it for the National Load Dispatch Centre for standby, comparison and cross-checking purposes.

d) Make payment in the spot electricity market: the National Load Dispatch Centre shall make payment in the spot electricity market and publish the list of daily payment by generators and power corporations; compare and confirm the list through the electricity market website.

...

...

...

Article 2. Plan for organizing implementation

1. Assign ERAV to:

a) supervise, instruct and encourage EVN, National Load Dispatch Centre, Electric Power Trading Company, power corporations, generators and relevant units to complete necessary preparations for operation of pilot competitive wholesale electricity market;

b) take charge of designing and completing the agreement distribution and electricity market simulator before July 01, 2016;

c) take charge and direct EVN, National Load Dispatch Centre, Electric Power Trading Company, generators and power corporations to complete  plans for piloting distribution of agreement and contractual power output Qc in the fourth quarter of 2016 between generators and power corporations;

d) supervise and submit periodic reports on operation of competitive wholesale electricity market to the Ministry of Industry and Trade, carry out a review of operation of competitive wholesale electricity market in 2016, which serves as a basis for making the next steps.

2. Assign EVN to:

a) direct and encourage its affiliates to complete the following tasks before December 15, 2015:

- Direct relevant units to help power corporations in installing payment assistance software; direct power corporations to complete transmission line in accordance with regulations to establish a connection to the electricity market intranet portal, thereby serving provision and exchange of information in the electricity market and providing assistance in payment.

...

...

...

- Direct relevant units to install appropriate hardware and software to satisfy requirements for participation in pilot wholesale electricity market in 2016;

- Direct the Electric Power Trading Company to assign power purchase agreements with power plants provided in Appendix 2 hereof to power corporations; provide guidelines for agreements and make paper-based payment;

- Direct power corporations to provide training and provide sufficient personnel for operation of pilot competitive wholesale electricity market.

b) cooperate with relevant units in completing and piloting the agreement distribution and electricity market simulation program under the direction of ERAV.

c) cooperate with relevant units in assessing the operation of pilot competitive wholesale electricity market in 2016 under the direction of ERAV.

3. Assign the National Load Dispatch Centre to:

a) satisfy requirements for infrastructure in service of operation of pilot wholesale electricity market in 2016 as prescribed in Point a Clause 2 Article 2 of this Decision, complete pilot operation of such infrastructure and commission it before December 15, 2015;

b) provide assistance in connecting power corporations’ transmission line to the electricity market intranet portal before December 15, 2015;

c) provide sufficient personnel for operation of pilot wholesale electricity market in 2016 before December 15, 2015;

...

...

...

dd) cooperate with relevant units in completing and pilot the agreement distribution and electricity market simulator to consider distributing agreements from July to the end of December, 2016.

4. Assign power corporations to:

a) satisfy requirements for infrastructure in service of operation of pilot wholesale electricity market in 2016 as prescribed in Point a Clause 2 Article 2 of this Decision, complete pilot operation of such infrastructure and commission it before December 15, 2015;

b) provide training in pilot wholesale electricity market in 2016 and provide sufficient personnel for participation in the electricity market before December 15, 2015;

c) submit weekly and monthly reports on operation and issues that arise during participation in pilot competitive wholesale electricity market in 2016 to ERAV.

5. Assign generators to provide sufficient personnel and perfect infrastructure to participate and cooperate with relevant units in operation of pilot competitive wholesale electricity market in 2016.

6. Assign the National Load Dispatch Centre, generators and power corporations to:

a) From January 01 to the end of September 30, 2016: make paper-based payment and address the issues that arise during payment according to the chart showing power output Qc in 2016, monthly Qc and hourly Qc calculated and agreed upon by the National Load Dispatch Centre, Electric Power Trading Company and generators;

b) From October 01 to the end of December 31, 2016: make paper-based payment and address the issues that arise during payment according to the chart showing monthly contractual power output Qc and hourly Qc calculated and agreed upon by the National Load Dispatch Centre, power corporations and generators.

...

...

...

PP. THE MINISTER
THE DEPUTY MINISTER




Hoang Quoc Vuong

APPENDIX 1

PROCEDURES FOR OPERATION OF PILOT COMPETITIVE WHOLESALE ELECTRICITY MARKET IN 2016
(Enclosed with the Decision No. 12751/QD-BCT dated November 23, 2015 of the Minister of Industry and Trade)

No.

Procedures

...

...

...

 Competitive electricity generation market
(actual operation)

Simulating operation of pilot competitive wholesale electricity market (paper-based payment)

1

Distribute contract for differences (CfD) to power corporations

Not applicable

- From January to the end of June, 2016: pilot distribution of 03 CfD to each Power Corporation (see Appendix 2 for details).

- From July to the end of September, 2016: pilot the contract distribution software according to the rules specified in the Decision No. 8266/QD-BCT dated August 10, 2015 of the Ministry of Industry and Trade, complete the software and pilot plans for distributing contracts. Procedures for distributing contracts are provided in Appendix 3.

- From October to the end of December, 2016: use results of contract distribution to serve pilot distribution: assess methods and tools for distributing contracts to make amendments (if necessary).

2

...

...

...

Comply with the Circular No. 30/2014/TT-BCT dated October 02, 2014 of the Minister of Industry and Trade on operation of competitive electricity generation market

- Use power plants’ annual and monthly contractual power output data included in the annual plan for operation of competitive electricity generation market to simulate competitive wholesale electricity market.

- Before December 15, 2015, the electricity system and market operator (National Load Dispatch Centre) shall unveil the 2016 electricity market operation plan which must include the annual contractual power output in the vesting contract provided in Appendix 2 according to Circular No. 30/2014/TT-BCT.

- National Power Transmission Corporation and power corporations shall review delivery points between transmission grid and distribution grid and collection of metering data at such delivery points and report thereon to ERAV.

- Power corporations shall inform ERAV of the chart showing power corporations’ total demand (30-minute resolution) for typical days of each week of 2016 to serve supervision and assessment of load forecasting error.

3

Prepare monthly operation plan

Comply with the Circular No. 30/2014/TT-BCT dated October 02, 2014 of the Minister of Industry and Trade on operation of competitive electricity generation market

- Before 20, M-1 month, according to the monthly operation plan, the electricity system and market operator shall provide power corporations with data on distribution of hourly contractual power output in month M….

...

...

...

- In June, August and September of 2016: ERAV, electricity system and market operator and units shall cooperate in running the contract distribution program and use distribution results for the fourth quarter of 2016.

4

Operate electricity market in the next hour and day and real time 

Comply with the Circular No. 30/2014/TT-BCT dated October 02, 2014 of the Minister of Industry and Trade on operation of competitive electricity generation market

- Power corporations shall visit electricity market website to supervise operation of electricity market.

5

Make payment

Comply with the Circular No. 30/2014/TT-BCT dated October 02, 2014 of the Minister of Industry and Trade on operation of competitive electricity generation market

- Before 9h00, date D+2, the electricity system and market operator (National Load Dispatch Centre) shall inform power corporations of electricity market prices applied to date D.

...

...

...

- Before date D+6, power corporations shall confirm the list provided by the electricity system and market operator and inform errors (if any).

- On date D+6, the electricity system and market operator shall complete and send the payment list to power corporations.

- The electricity system and market operator shall provide power corporations with hourly metering data of the power plant having a contract distributed to power corporations.

- Power corporations shall make payment under the distributed contract and inspect the payment in the spot market which is published by the electricity system and market operator.

- Power corporations shall complete documents on the aforementioned payment.

APPENDIX 2

EXPECTED PILOT DISTRIBUTION OF CONTRACTS TO POWER CORPORATIONS FROM JANUARY TO THE END OF JUNE, 2016
(Enclosed with the Decision No. 12751/QD-BCT dated November 23, 2015 of the Minister of Industry and Trade)

No.

...

...

...

Installed capacity (MW)

Power corporations

I

1. Dam’Bri Hydropower Plant (IPP)

75

Northern Power Corporation

2. Phu My 1 CCGT Power Plant (Genco 3)

1059

3. Pha Lai 1 Thermal Power Plant (Genco 2)

...

...

...

II

1. Da Mi Hydropower Plant (Genco 1)

175

Hanoi City Power Corporation 

2. Phu My 2.1 CCGT Power Plant (Genco 3)

860

3. Mao Khe Thermal Power Plant (TKV - Power)

440

III

...

...

...

125

Central Power Corporation

2. Phu My 4 CCGT Power Plant (Genco 3)

440

3. Na Duong Thermal Power Plant (TKV - Power)

100

IV

1. Dong Nai 4 Hydropower Plant (Genco 1)

340

...

...

...

2. Nhon Trach 2 CCGT Power Plant (PV-Power)

750

3. Cam Pha Thermal Power Plant (TKV - Power)

670

V

1. Ban Ve Hydropower Plant (Genco 1)

320

Ho Chi Minh City Power Corporation 

2. Nhon Trach 1 CCGT Power Plant (PV-Power)

...

...

...

3. Hai Phong 1 Thermal Power Plant (Genco 2)

600

APPENDIX 3

EXPECTED PILOT DISTRIBUTION OF CONTRACTS TO POWER CORPORATIONS FROM JULY TO THE END OF DECEMBER, 2016
(Enclosed with the Decision No. 12751/QD-BCT dated November 23, 2015 of the Minister of Industry and Trade)

1. Distribution of CfD signed between generators and EVN to CfD between generators and power corporations shall be piloted according to the following rules:

- Average costs incurred from purchase of input electricity under terms and conditions of vesting contracts of power corporations are equivalent to each other;

- Contractual price and quantity are calculated in conformity with the load curve of customers of power corporations and in conformity with binding requirements set out by the generator;

- Commitments specified in the power purchase agreement between EVN and generators are fulfilled;

...

...

...

2. Contracts shall be distributed by taking the 02 following steps:

- Using CfD distribution software according to the rules specified in the Decision No. 8266/QD-BCT dated August 10, 2015 of the Minister of Industry and Trade on approval for detailed design of Vietnam's competitive wholesale electricity market;

- Analyzing and assessing results of contract distribution: simulate electricity market to estimate market prices and power generation output, etc.; use results of electricity market simulation and contract distribution to determine total revenue according to each plan and serve effect assessment. According to the assessment results, consider adjusting input data and binding conditions for contract distribution.

3. In addition to piloting distribution according to the aforementioned steps, other methods for piloting distribution may be used to carry out assessment and analysis (not mandatory).

Quyết định 12751/QĐ-BCT năm 2015 phê duyệt Kế hoạch thực hiện vận hành Thị trường bán buôn điện cạnh tranh thí điểm năm 2016 do Bộ Công thương ban hành