The first session of the Technical Working Group on Energy Market

Overview of the session.

The main objective of the session to update the national policies and orientations for the oil and gas, coal and electricity markets in Vietnam, especially the opportunities and challenges for developing these markets in the context that Vietnam should try the best to implement commitment for achieving net-zero carbon emissions by 2050 as announced by Prime Minister Pham Minh Chinh at COP26. The session also aimed to identify the focus subjects and unify activities of the Technical Working Group in 2022.

According to a report by the Petroleum and Coal Department (Ministry of Industry and Trade- MOIT), the oil and gas potential of Vietnam is 4.5 to 7.1 billion TOE including 25% of crude oil and 75% of natural gas, 50% of the reserves in deepwater offshore, and 85% of the natural gas output for the electricity industry. For the coal, every year, Vietnam exploits about 40-47 million tons/year of raw coal including about 37-45 million tons accounting for 85-90%) of the commercial coal. Coal output for power generation increased more than double times from about 32 million tons in 2016 to about 70 million tons in 2021.

In the next period, the petroleum and coal industries will work towards the common goal of firmly ensuring national energy security, supply of adequate, stable energy with high quality, reasonable prices for improving people's living standards, and contributing to protecting the ecological environment and at the same time, for building and developing the market with a healthy competition mechanism in each period with the regulation of the State.

As for the electricity market, a representative of the Electricity Regulatory Authority (MOIT) shared the roadmap for developing a competitive electricity market, with the levels from the competitive electricity generation market (2012 - 2018)to the competitive wholesale electricity market (2019-2000), and the pilot phase of the competitive retail electricity market (2021-2023)before officially fully applying competitive retail electricity market. The main contents of the draft pilot program of the direct electricity purchase mechanism between renewable energy generators and customers (DPPA) were also presented at the session, of which it was clearly specified the pilot scale, subjects of application, method of selecting pilot projects and pilot implementation process for interested units.

The International development partners also share many experiences and studies with abundant and qualitative information.

The United States Agency for International Development (USAID) reported on support activities within the framework of the Vietnam Low Emission Energy Program II (V-LEEP II) for MOIT and its subsidiaries, as well as the results of a deep study on fossil fuel reduction scenarios in the power sector. Besides, there were shares on the carbon market from a representative of the Asia Foundation, and a presentation on the flexible operation mechanism of coal thermal power plants in Denmark.

At the end of the first session, the participants discussed and agreed on the focus subjects of the Technical Working Group on the energy market in the new period including competitive wholesale electricity market, direct power purchase agreement, orientation for the coal market, assessment of potential and development orientation for renewable energy, LNG and green hydrogen power projects.

On the second working day, the participants visited the Thai Hoa Wind Power Project in Binh Thuan province. The project leaders and staff shared practical experiences in activities for establishing plans to construct and operate the project.

Thereby, the participants obtained a realistic view of the opportunities and challenges of the project in the market conditions and current mechanisms and policies, as well as the expectations of the project leader in the future market.

Following the first session of the Technical Working Group on Energy Market will be the session of the Technical Working Group on Grid connection and Infrastructure of the Electricity Sector expected to be held in the last week of June.