Decision No. 63/2013/QD-TTg stipulates the roadmap, conditions, and industry structure for forming and developing electricity market levels in Vietnam.

 Pursuant to …;

Regulations on the roadmap, conditions, and industry structure for the formation and development of electricity market levels in Vietnam
To form and develop electricity market levels in Vietnam

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Electricity Law dated December 3, 2004; and the Law Amending and Supplementing Certain Provisions of the Electricity Law dated November 20, 2012;

At the proposal of the Minister of Industry and Trade;

The Prime Minister issues this Decision to regulate the roadmap, conditions, and industry structure for the formation and development of electricity market levels in Vietnam.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decision regulates the roadmap, conditions, and industry structure for the formation and development of electricity market levels in Vietnam.

Article 2. Applicability

This Decision applies to entities participating in the electricity market.

Article 3. Explanation of Terms

In this Decision, the following terms shall be understood as follows:

1. The SCADA/EMS system (English abbreviation: Supervisory Control And Data Acquisition/Energy Management System) is a data collection, monitoring, control, and energy management system in the operation of the national power system.

2. The SCADA/DMS system (English abbreviation: Supervisory Control And Data Acquisition/Distribution Management System) is a data collection, monitoring, control, and distribution network management system in the operation of the power distribution system.

3. A bilateral contract is a document agreeing on the sale and purchase of electricity with a term between the buyer and seller of electricity.

4. The spot electricity market is a market for buying and selling electricity during trading cycles carried out by the market operator according to the regulations of the various levels of the electricity market.

Article 4. Roadmap for the formation and development of electricity market levels in Vietnam

The electricity market is formed and developed through three levels as follows:

1. Competitive power generation market (Level 1): Continue implementing the competitive power generation market until the end of 2014.

2. Competitive wholesale electricity market (Level 2):

a) From 2015 to 2016: Implement a pilot competitive wholesale electricity market;

b) From 2017 to 2021: Implement a complete competitive wholesale electricity market.

3. Competitive retail electricity market (Level 3):

a) From 2021 to 2023: Implement a pilot competitive retail electricity market;

b) After 2023: Implement a complete competitive retail electricity market.

Article 5. General principles of operation of the electricity market

The electricity market operates under the following general principles:

1. Transmission companies and distribution companies provide transmission and distribution services.

2. National power system dispatching units and market operation dispatching units provide power system dispatching and market operation services.

3. Entities participating in the electricity market must pay fees and prices when using power system dispatching services, market operation dispatching services, transmission, distribution, and other services in the electricity market.

4. The Electricity Regulatory Authority implements regulation of power activities in the electricity market.

Chapter II
COMPETITIVE POWER GENERATION MARKET

Article 6. Principles of operation of the competitive power generation market

In addition to the principles stipulated in Article 5 of this Decision, the competitive power generation market operates under the following principles:

1. Power generation units that meet the prescribed conditions sell electricity to the sole wholesale buyer through bilateral contracts and on the spot electricity market. The ratio of electricity sold through bilateral contracts and on the spot electricity market is announced annually by the Electricity Regulatory Authority.

2. The sole wholesale electricity buyer purchases electricity from power generation units through bilateral contracts and on the spot electricity market to sell wholesale to the Electricity Joint Stock Corporations under the Vietnam Electricity Corporation.

Chapter III
COMPETITIVE WHOLESALE ELECTRICITY MARKET

Article 7. Principles of operation for the competitive wholesale electricity market

1. In addition to the principles stipulated in Article 5 of this Decision, the competitive wholesale electricity market operates according to the following principles:

a) State-owned Electricity Corporation, Electricity Company, certain retail electricity suppliers, and large electricity consumers meeting the prescribed conditions may purchase electricity from power generation units and wholesale electricity suppliers through bilateral contracts and on the spot electricity market.

In addition to the rights and obligations of distribution and retail electricity suppliers, State-owned Electricity Corporations and Electricity Companies also perform the rights and obligations of electricity trading entities.

b) New wholesale electricity suppliers established and meeting the prescribed conditions may purchase electricity from power generation units and wholesale electricity suppliers through bilateral contracts and on the spot electricity market to sell electricity to other wholesale electricity suppliers, retail electricity suppliers, and large electricity consumers.

c) Power generation units sell electricity to wholesale electricity suppliers, retail electricity suppliers, and large electricity consumers through bilateral contracts and on the spot electricity market.

d) During the pilot phase of the competitive wholesale electricity market, certain State-owned Electricity Corporations and Electricity Companies under the Vietnam Electricity Group, and some retail electricity suppliers and large electricity consumers are selected to participate in the pilot competitive wholesale electricity market.

Article 8. Industry Structure for Establishing a Competitive Wholesale Electricity Market

To establish a competitive wholesale electricity market, the industry structure must meet the following conditions:

1. Pilot Phase of the Competitive Wholesale Electricity Market

a) The national electricity system dispatch unit and the electricity market transaction management unit must be independent entities with no common interests with market participants;

b) The State-owned Power Generation Corporation and power plants under the Vietnam Electricity Group (excluding large power plants with significant economic, social, defense, and security importance managed exclusively by the State pursuant to Article 4 of the Electricity Law) must be separated into independent power generation units with no common interests with wholesale electricity suppliers, transmission units, national electricity system dispatch units, and electricity market transaction management units;

c) The total installed capacity of a single power generation unit shall not exceed 25% of the total installed capacity of all participating power generation units;

d) State-owned Electricity Corporations and Electricity Companies meeting the required conditions and selected to participate in the pilot competitive wholesale electricity market must implement separation regarding organizational structures and accounting of distribution and retail electricity departments.

2. Complete Phase of the Competitive Wholesale Electricity Market

Electricity companies directly under State-owned Electricity Corporations must be organized as independent accounting units; such units must implement separation regarding organizational structures and accounting of distribution and retail electricity departments.

Article 9. Conditions for Establishing a Competitive Wholesale Electricity Market

1. Regarding Legal Frameworks

a) The restructuring plan for the electricity industry approved by the Prime Minister;

b) The design plan for the competitive wholesale electricity market approved by the Ministry of Industry and Trade;

c) The Ministry of Industry and Trade promulgates or amends and supplements the following regulations:

- Regulations on conditions for participation in the competitive wholesale electricity market for market participants; regulations on the operation of the competitive wholesale electricity market;

- Regulations on electricity regulation activities; regulations on the transmission electricity system; regulations on the distribution electricity system; regulations on electricity metering; regulations on electricity prices suitable for the operation of the competitive wholesale electricity market;

- Regulations on calculating transmission electricity prices, distribution electricity prices, and system dispatch fees and market transaction management fees for the competitive wholesale electricity market;

- Other necessary regulations for the operation of the competitive wholesale electricity market.

2. Regarding Infrastructure of the Electricity System

a) Fully establish the SCADA/EMS system and remote metering systems for independent accounting distribution electricity units and large electricity consumers, meeting the requirements of the competitive wholesale electricity market;

b) Equip information systems serving the management and operation of the electricity market to meet the requirements of the competitive wholesale electricity market.

3. Regarding Operational Capacity of Participating Entities: Entities participating in the competitive wholesale electricity market must have a team of professionally trained staff; equip necessary infrastructure systems to meet the requirements of the competitive wholesale electricity market.

4. Prior to commencing operations of the complete competitive wholesale electricity market, the legal frameworks and infrastructure of the electricity system must be adjusted to meet the requirements of the complete competitive wholesale electricity market.

Chapter IV
COMPETITIVE RETAIL ELECTRICITY MARKET

Article 10. Principles of operation of the competitive retail electricity market

1. In addition to the general principles stipulated in Article 5 of this Decision, the competitive retail electricity market operates according to the following principles:

a) Retail electricity units purchase electricity from power generation units and wholesale electricity units through bilateral contracts and from the spot electricity market to sell electricity to end-users.

b) New retail electricity units established in accordance with the prescribed conditions may purchase electricity from power generation units and wholesale electricity units to sell electricity to end-users.

c) End-users meeting the prescribed conditions may purchase electricity from power generation units, wholesale electricity units, and retail electricity units through bilateral contracts and from the spot electricity market.

2. During the pilot phase, certain end-users will be selected to participate in the pilot competitive retail electricity market.

Article 11. Structure of the electricity industry for the formation of the competitive retail electricity market

To form the competitive retail electricity market, the structure of the electricity industry must meet the following conditions:

1. Pilot phase of the competitive retail electricity market: The retail electricity units within some Electricity Companies that meet the prescribed conditions to participate in the pilot competitive retail electricity market must be separated into independent accounting retail electricity units.

2. Complete phase of the competitive retail electricity market: The retail electricity units within Electricity Companies must be separated into independent accounting retail electricity units.

Article 12. Conditions for forming the competitive retail electricity market

1. Regarding Legal Frameworks

a) The Prime Minister approves the adjustment of the restructuring plan for the electricity industry (if necessary);

b) The retail electricity market design proposal is approved by the Ministry of Industry and Trade;

c) The Ministry of Industry and Trade issues new or amends and supplements regulations applicable in the competitive retail electricity market:

- Regulations on the conditions for participating in the competitive retail electricity market for entities participating in the electricity market; operational regulations for the competitive retail electricity market;

- Regulations on: Power regulation activities; transmission system; distribution system; metering; electricity prices suitable for the operations of the competitive retail electricity market;

- Regulations on calculating transmission tariffs, distribution tariffs, and system operation fees and market transaction management fees for the competitive retail electricity market;

- Other necessary regulations for the operations of the competitive retail electricity market.

2. Regarding Infrastructure of the Electricity System

a) The SCADA/DMS system and remote metering systems for the distribution network are fully invested in and completed to meet the requirements of the competitive retail electricity market;

b) Information systems serving the management and operation of the electricity market are equipped appropriately to meet the requirements of the competitive retail electricity market.

3. Conditions regarding the operational capacity of participating entities: Entities participating in the competitive retail electricity market must have a team of staff trained in specialized fields and equipped with necessary infrastructure systems to meet the requirements of the competitive retail electricity market.

4. Prior to the commencement of the complete phase of the competitive retail electricity market, all relevant documents and infrastructure systems must be adjusted to comply with the requirements of the complete phase of the competitive retail electricity market.

Chapter V
IMPLEMENTATION

Article 13. Implementation Organization

1. The Ministry of Industry and Trade shall be responsible for:

a) Develop and submit to the Prime Minister for approval a restructuring plan for the electricity industry in line with the development roadmap for various levels of the electricity market;

b) Direct the implementation of the construction and development of the electricity market in Vietnam according to the roadmap set out in this Decision; monitor and evaluate the implementation and development of the electricity market;

c) Approve proposals for designing the electricity market at various levels;

d) Issue operational regulations for the electricity market and related regulations;

đ) Receive support from international financial organizations for projects to construct and develop various levels of the electricity market;

e) Aggregate funding needs for developing the electricity market annually for the Ministry of Planning and Investment to compile and submit to the Prime Minister for approval.

2. The Ministry of Planning and Investment shall coordinate with the Ministry of Finance to allocate sufficient funds from the state budget for the activities of the Ministry of Industry and Trade related to the tasks of constructing and developing the electricity market at each level according to the approved budget.

3. The Vietnam Electricity Group shall have the responsibility:

a) Invest in completing the necessary technical infrastructure for the operation of the competitive power generation market and the competitive wholesale electricity market;

b) Organize training to enhance the professional skills of staff of units under the Vietnam Electricity Group to meet the requirements of participating in the electricity market at various levels;

c) Invest in technical infrastructure and provide financial support for the establishment of newly independent units and activities to improve capacity and professional training to meet the operational requirements of the electricity market at various levels.

4. Power generation units, transmission units, national power system dispatch units, market transaction management units, distribution units, wholesale electricity units, retail electricity units, and other units participating in the electricity market shall be responsible for:

a) Investing in necessary technical equipment to meet the operational requirements of the electricity market at various levels;

b) Training professional skills for staff teams to meet the operational requirements of the electricity market at various levels.

Article 14. Effective Date

This Decision takes effect from December 25, 2013; Decision No. 26/2006/QĐ-TTg dated January 26, 2006 of the Government approving the roadmap, conditions for formation and development of various levels of the electricity market in Vietnam ceases to be effective from the date this Decision takes effect.

Article 15. Responsibility for Implementation

1. The Ministry of Industry and Trade is responsible for guiding and implementing this Decision.

2. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the Central Government, the Vietnam Electricity Corporation, and related organizations and individuals are responsible for enforcing this Decision./.