UPDATES ON VIETNAM POWER SYSTEM AND

ELECTRICITY MARKET OPERATION

NATIONAL LOAD DISPATCH CENTER

 Content

01. Updates on Power system and market operation

02. Current challenges

03. Future development of Vietnam Electricity Market

 01
UPDATES ON POWER SYSTEM AND
ELECTRICITY MARKET OPERATION
VIETNAM POWER SYSTEM IN BRIEF – INSTALLED CAPACITY

By the end of 2022, the total number of power

plants in operation was 360 (not including small
hydropower plants) with a total installed capacity
of 80597 MW (without imports).

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VIETNAM POWER MARKET IN BRIEF – INSTALLED CAPACITY

In 2022, there are 4 power plants that directly participate

in the electricity market, with a total installed capacity of
2889 MW; bringing the total number of power plants
directly participating in offering prices on the electricity
market to 108 plants.

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POWER SYSTEM OPERATION IN 2022

In 2022, the total power production of national power system reached about 271 billion kWh (including power
production sold to Cambodia) which increased by 6.1 % as compared to 2021.

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POWER SYSTEM OPERATION IN 2022

The national peak demand of 2022 reached 45434 MW on June 21, which raised 6.95% as compared to the 2021 figure

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POWER SYSTEM OPERATION IN 2022

Renewable energy (Solar farm, rooftop solar, wind power, and

small hydro) daily generation is distributed at a high
concentration level in the period from June to September.

Renewable energy generating capacity in the fourth quarter is

lower than the rest of the year. The highest value of power
generation output is about 17 GW in the second quarter .

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OPERATIONAL RESULTS: POWER MARKET PRICE IN 2022

The price cap of 2022 is 1602.3 VND / kWh. After basically controlling the Covid-19 epidemic, Vietnam's economy has
to face rising fuel prices. This is a factor that has a strong impact on Vietnam's electricity market.

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OPERATIONAL RESULTS: POWER MARKET PRICE IN 2022

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 02
CURRENT CHALLENGES
POWER SYSTEM OPERATIONAL CHALLENGES
• Currently, 25 overload 220/110kV lines/transformers
• 500kV regional transmission
CONGESTION • 220 RE power plants haven’t been fully dispatched due to local
congestion
During low-peak hours, especially weekends and Tet Holiday,
RENEWABLE SURPLUS over-generation occurs due to high renewable penetration

• Low system inertia

SYSTEM INERTIA => Risk of system instability

High RE forecast errors increase the absolute value of imbalance

RE FORECAST ERRORS and bring difficulties in system planning

• The incentive mechanism for ancillary services is not attractive

SUPPORTING MECHANISM => lack of reserve to meet the uncertainty of renewables
• Currently there is no mechanism for BESS
There is no specific regulation on the fault ride through of
renewable energy sources => The adjustment parameters of the
solar inverters and wind turbines are always kept at the rated
FAULT RIDE THROUGH/LOW SCR
parameters set by the issuer => The serious incident occurs
because the fault ride through parameters are not properly set
(accidents May 13, 2021, June 2, 2021)
Low SCR → power swing

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Power market operational challenges
Difficult to forecast Significant impact on the output of year-ahead
renewable in the long-term power market planning such as: Capacity Add-on
planning (CAN) price, contract quality allocation

The solar power is mainly

Capacity Add-on (CAN) prices do not totally
generated during daytime reflect the actual peak hours of power system
peak hours

National Load Dispatch Center (NLDC) 13

Power market operational challenges
The day-ahead and half-hour-ahead indicative
market prices could be largely different from the
ex-post settlement price

Wind and solar power

Increase in reserve requirement that leads to
intermittency and more complex optimization problems
fluctuation

Difficulty in renewable energy Occurrence of constrained-on payment in ex-post

forecast for day-ahead and settlement
half-hour-ahead

Increasing in the total cost of system due to

scheduling and dispatching costly generators and
frequent start-up/shut-down generator units

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 03
Future development of Vietnam Electricity Market
Future development of Vietnam Electricity Market

Developing DPPA mechanism

❖ The DPPA mechanism allows large consumers to buy electricity directly from renewable energy power plants.
❖ Power transactions between parties are conducted via the spot market in accordance with the rules and regulations of VWEM.
Developing ancillary service market

❖ Building up co-optimization of energy and reserves mechanism.

❖ Building up mechanism for facilitating the participation of renewable energy power plants in Ancillary Service (frequency & voltage control).
Developing mechanisms for BESS and smart grid
❖ BESS can act as an integral source in order to provide reserve when occurring differences between supply and demand in power system
(unit faults, sudden decrease in RE generations,…).
❖ BESS can directly participate in power market or in ancillary service market.
❖ Developing and integrating smart grid in power system (Electrical Vehicles, DERs, smart meters,…).
Developing mechanism for VRE to participate in power market
❖ VRE can directly participate in the power market as a price-taker by adapting new market design to high Shares of VRE.

Revising current market rules, grid codes

❖ Revising market rules (Circular 45/2018, 24/2019), grid codes (Circular 25/2016, 30/2019) in order to cope with the high shares of VRE.

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Future development of Vietnam Electricity Market

Developing new financial mechanisms

Promoting the implementation of commercial DR programs in order to improve the

response of load on market-based

Developing Financial Transmission Right (FTR) regime in order to hedge the risk of price
difference between load’s node and the generator’s node

Creating new forms of financial contracts such as CfD, Swap, Options for power market
participant to flexibly contract with different partners

Creating new derivative financial market for electricity such as contract auctions, forward
market, future markets

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Thank You!