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  • News
  • News in Vietnam
  • 10 December 2021

Proposal for private investment in power transmission project

The Government proposes to amend the Electricity Law to allow all economic sectors to invest in power transmission projects.

On the morning of December 8, the Standing Committee of the National Assembly held its 6th session to discuss amendments to 8 laws (including the Law on Public Investment, the Law on Investment in the form of public-private partnership, the Law on Investment, the Law on Bidding, the Law on Electricity, etc.), Law on Enterprises, Law on Special Consumption Tax and Law on Execution of Civil Judgments).

Amending the Electricity Law, the Government proposes to amend Article 4 that the State attracts all economic sectors to participate in investment in the construction of transmission grids, except for power grid projects invested by the State according to the planning electricity development in each period.

Letting the private sector do the power transmission infrastructure is one of the solutions to reduce the current grid load. The proportion of renewable energy sources (solar power, wind power…) increases in total capacity, but it is mainly concentrated in a few low-load areas.

Most opinions of the Standing Committee of Science, Technology, and Environment, during the preliminary examination, agreed to allow enterprises of all economic sectors to invest in the construction of the transmission grid. But there are also suggestions to consider when opening to private investors to support this field.

National Assembly Chairwoman Vuong Dinh Hue suggested that a more thorough assessment of the impact on energy security and national defense is needed when economic sectors invest in building power transmission networks, especially stations and roads. 500 kV grid wire.

According to him, the State had a monopoly in electricity transmission in the past, including construction, operation, and management. If open to all economic sectors, including foreign investors, investment in transmission lines and stations, including critical power transmission systems, backbone such as substations, and 500 kV transmission lines in the North-South axis.

“It is necessary to clearly define which type of power transmission line can be built by private investors, which type is planned by the State and assigned to EVN to do,” he said.

National Assembly Vice Chairman Nguyen Khac Dinh also agreed that they should clearly state in the revised law that lines above 500 kV are not decentralized for private use. As for transmission lines below 500 kV, all sectors can participate, but there are still important projects that the State follows the planning. For example, if the transmission line is short but passes through the security and defense areas, the State must invest.

After explaining on behalf of the Government, Minister of Industry and Trade Nguyen Hong Dien agreed with the suggestion of the Chairman of the National Assembly. The draft law will specify the transmission grid works that private investors can invest in. According to him, the State will support essential and lifeline power grid projects such as 500 kV high-voltage lines and 800 kV super-high-voltage lines. As for transmission lines below 500 kV (such as 100 kV and 220 kV lines).

Regarding the cost of private investment, National Assembly Chairman Vuong Dinh Hue raised the issue of publicity and transparency in managing operating expenses, depreciation, and maintenance of the power transmission grid when the private sector started working personally.

“The State even approves the total investment and audits… Now that investors make one, declare it in 12, how do we control it? They will later include these investment costs in the list of electricity transmission costs, which are included in the electricity selling price and electricity purchase. How is this place managed?” he raised a series of problems.

Minister Nguyen Hong Dien explained that allowing the private sector to participate in the investment in the power transmission grid will help the State control, without significant fluctuations in the electricity price and the security of the power system. Residents also do not incur additional costs. As for state-owned enterprises, the burden of investment in transmission grids will be reduced, with an estimated annual investment savings of about 11,000 billion VND.

“For the regulation of the power system is still in the hands of the State, which ensures that the power system is operated efficiently and stably,” affirmed the Minister of Industry and Trade.

On the other hand, when investing in the transmission grid, the private sector must comply with the regulations on investment and construction, subject to the State management on operation, such as allowing other entities to have the right to connect to the transmission grid. load. “Whoever does that part gets to enjoy it,” he said.

After discussion, the National Assembly Standing Committee members voted and approved the addition of this bill into the 2021 law and ordinance-making program. They will submit the revised statement according to simplified procedures for the National Assembly to approve at an extraordinary session scheduled at the end of this year.

(Source: VnExpress)