CaliToday (10/10/2025): Vietnam Electricity (EVN), the country's state-owned power utility, has initiated a significant pilot program to test a new two-component electricity tariff structure. The trial, which is currently being conducted as a paper-based simulation, is aimed at large-scale consumers—specifically those with a monthly consumption exceeding 200,000 kilowatt-hours (kWh).
This move signals a strategic shift towards modernizing Vietnam's electricity pricing mechanism to better reflect the costs of power generation and grid management, aligning the nation with international best practices.
Understanding the Two-Component Tariff
The proposed pricing model is a departure from the current single-component system, where customers are billed solely based on the total volume of electricity they consume (the energy charge, measured in kWh). The new structure introduces a second critical element: a capacity charge.
Here’s how the two components work:
Energy Charge (per kWh): This component is similar to the existing system. It is a variable charge based on the total amount of electricity a customer consumes over a billing period. It covers the costs of fuel, power generation, and other variable expenses.
Capacity Charge (per kW or kVA): This is the new component. It is a fixed charge based on the customer's maximum registered power demand or the peak amount of power they draw from the grid at any one time (measured in kilowatts, kW, or kilovolt-amperes, kVA). This charge is designed to cover the fixed costs of the power system, such as investment in power plants, transmission lines, and substations required to meet peak demand.
In essence, the new tariff will bill customers not only for how much energy they use, but also for how intensely they use it at peak times.
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| Mr. Nguyen Quoc Dung, Head of EVN's Business Department, informed about the application of two-component electricity price. Photo: Bao Xay dựng |
Objectives of the "Paper-Based" Trial
The initial phase is being conducted as a "paper-based trial," meaning that EVN will calculate customers' bills using the new two-component method and compare them against their actual bills under the current system. This simulation allows EVN and its major customers to analyze the potential financial impact without any real-world billing changes.
The key objectives of this pilot are:
Encourage Grid Stability: By charging for peak demand, the tariff incentivizes large industrial users to spread their electricity consumption more evenly throughout the day, a practice known as "load balancing." This reduces strain on the national grid during peak hours.
Promote Energy Efficiency: It provides a clear financial incentive for businesses to invest in more energy-efficient technology and optimize their production schedules to avoid high simultaneous power usage.
Fairer Cost Allocation: The model ensures that customers who place a greater strain on the grid by demanding high capacity pay a proportionally higher share of the infrastructure costs.
The Road Ahead
The trial is a critical first step. After gathering and analyzing the data from this simulation, EVN is expected to consult with business associations, industrial park management boards, and relevant government ministries. These discussions will be vital for refining the mechanism, setting appropriate price levels for each component, and developing a clear roadmap for a potential real-world implementation.
This move is seen by industry experts as a necessary evolution for Vietnam's rapidly growing economy, which demands a more sophisticated and stable energy infrastructure to support its continued industrialization.
