The Vietnam Federation of Commerce and Industry (VCCI) has proposed that the Ministry of Industry and Trade add policies to develop pumped-storage hydropower and waste-to-energy, with attention paid to the issue of electricity price mechanisms.
Supplementing policies for developing pumped storage hydropower and waste-to-energy
VCCI has just commented on the draft decree detailing a number of articles of the Electricity Law on the development of renewable energy and new energy.
According to VCCI, the Electricity Law defines renewable energy as including solar, wind, ocean, geothermal, hydropower, biomass, and waste. The draft currently has a general policy on renewable energy development and specific policies for rooftop solar power and offshore wind power.
However, for pumped storage hydropower and waste-to-energy power, specific development policies have not been issued, although these power sources are in accordance with the Electricity Law and are both considered renewable energy.
According to VCCI, pumped storage hydropower has the advantage of being able to store excess energy and release it when needed. In addition, the combination of a short mobilization time of just a few minutes makes pumped storage hydropower very suitable for combining with wind and solar power sources on the national grid.
Currently, pumped storage hydropower technology can be commercialized and needs to be focused on development in Vietnam in the coming period.
Proposal to supplement policies for the development of pumped storage hydropower and waste-to-energy. Illustration photo.
Therefore, VCCI recommends that the drafting agency study and add policies for pumped storage hydropower development to the decree.
"Specific contents need to focus on the mechanism of purchasing electricity prices for pumping water and selling electricity prices when transmitting to the grid. If these two prices have a large enough difference, it will help pumped storage hydropower investment projects become attractive to investors," VCCI proposed.
Regarding electricity from waste, according to VCCI, there are still some environmental problems, but burning waste to generate electricity is considered to reduce pollution compared to the form of burying household waste which is popular in urban areas of Vietnam today.
Many localities are researching to replace the form of burying household waste with burning waste to generate electricity.
Vietnam also has a waste-to-energy development policy in Decision 31/2014. According to the Electricity Law 2024, the waste-to-energy development policy in Decision 31 needs to be regulated in this Decree.
"The content of the waste-to-energy development policy should also focus on the electricity price mechanism and regulations on projects meeting electricity planning," VCCI recommended.
How should pumped storage hydropower prices be calculated?
Dr. Nguyen Huy Hoach - energy expert - assessed that pumped storage hydropower technology is playing a key role in the transition to green energy, an essential bridge to help effectively integrate renewable but unstable energy sources (such as wind and solar energy).
According to the eighth power plan by 2030, Vietnam will have 2.400 MW of pumped storage hydropower capacity. However, the country currently only has the Bac Ai pumped storage hydropower project (Ninh Thuan), which started construction in January 1 with a total investment of more than VND 2020 billion. However, due to many difficulties, the progress has been adjusted to be put into operation 21.100 year later than planned (1).
In particular, because there is no price framework for pumped storage hydropower, investors are not interested in considering investing in this power source.
Commenting on the price of electricity from pumped storage hydropower, Dr. Nguyen Huy Hoach said that EVN is studying and evaluating the application of two-component electricity prices and plans to apply them on a pilot basis in 2025. Therefore, in addition to determining the price framework for pumped storage hydropower, it is necessary to include the capacity price in the calculation for pumped storage hydropower to conform to the general trend of calculating electricity prices currently being implemented in the world.
"When there is a suitable electricity price frame for pumped storage hydropower plants, harmonizing the interests of investors and electricity buyers, it will certainly attract investment for the power system, providing electricity for the country's needs," said Dr. Nguyen Huy Hoach.
According to PV Xuan Phong - Tien Phong Newspaper