Developing electricity market in Vietnam: the current situation and the solutions Phát triển thị trường điện lực tại Việt Nam: thực trạng và giải pháp INTRODUCTION Electricity is one of the most important products in any national economy. In fact, it is the essential input of almost products and services that modern people consume nowadays. That is why even the smallest trouble in electricity provision system can cause many serious problems for the whole country. Shortage of electricity can limit the national development. Electricity cut-off can make huge losses for production, industrial factories, hospital, etc. and badly affect people’s work and life. Despite that great importance of electricity to the society and the economy, Vietnam is facing serious shortage of electricity and regular power cut-off especially in dry season. Lack of capital and technology, also skillful human resources to enlarge the size, also the number of conventional-energy power projects is one issue. Low ability to exploit alternative energy sources though they are estimated to be highly abandoned is another issue. There are not enough instructions and guidelines to support a new competitive electricity market which is being established; that is also a problem. Though in recent years, Vietnam has achieved significant success in electricity market, no one can deny that there are a lot of things to do in coming years. Due to the current situation of electricity market in Vietnam, this thesis is written for three purposes. The first one is to collect and present the most scientific information and widely-accepted opinions on a number of concepts, definitions, and models which are popular when considering electricity markets in general. The second one is to identify the current situation of Vietnam electricity market with up-to-date information. The third one is to propose some personal suggestions as solutions for government, electricity suppliers, and also electricity consumers to resolve existing issues and develop the efficiency of Vietnam electricity market. There are three chapters corresponding to these three goals as following: - Chapter 1: Some theoretical basis and practical ones of electricity market - Chapter 2: The current situation of electricity market in Vietnam - Chapter 3: Some solutions to develop Vietnam electricity market Though a lot of time and efforts are put into this thesis, mistakes are still inevitable due to limited knowledge, skills, and available information. As a result, I do desire for and highly appreciate comments and assessment of readers for further fulfillment of this thesis. My last words, I would like to show my great thankfulness to my family to support me through hardness, to my lecturers in university for their inspiring lectures, and to Dr.Hoàng Xuân Bình for his help through the long progress in which I did this writing. CONTENT INTRODUCTION CHAPTER 1 SOME THEORETICAL BASIS AND PRACTICAL BASIS OF THE ELECTRICITY MARKET 1.1.Theoretical basis of electricity market . 1.1.1. Electricity and its role as commercial goods . 1.1.1.1.Introduction to electricity 1.1.1.2.Characteristics of electricity as commercial goods 1.1.2. Some determinants of electricity supply 1.1.2.1.Natural resources . 1.1.2.2.Capital 1.1.2.3.Technology 1.1.3. Some determinants of electricity demand 1.1.3.1.Economic growth . 1.1.3.2.Budget constraint . 1.2.Some practical basis of electricity market . 1.2.1. Wholly competitive electricity market in Brazil 1.2.2. Partly competitive electricity market in Italy CHAPTER 2 . THE CURRENT SITUATION OF ELECTRICITY MARKET IN VIETNAM 2.1. An overview of electricity market 2.2. The current situation of electricity market 2.2.1. Market structure . 2.2.2. Supply of electricity . 2.2.2.1. The current status of electricity supply . 2.2.2.2. The issue of energy resources 2.2.2.3. The issue of capital . 2.2.2.4. The issue of technology 2.2.3. Demand for electricity . 2.2.3.1. The current status of demand for electricity . 2.2.3.1. The impact of economic growth . 2.2.3.3. The impact of budget constraint 2.2.4. Some governmental regulations on electricity market . 2.2.4.1. Regulations on electricity price 2.2.4.2. Regulations on electricity supply 2.2.4.3. Regulations on electricity consumption 2.3. An assessment on electricity market in Vietnam 2.3.1. Some achievements 2.3.2. Some existing problems and their reasons . CHAPTER 3 ORIENTATION AND SOLUTIONS TO DEVELOP ELECTRICITY MARKET IN VIETNAM 3.1. Government orientation to develop electricity market 3.1.1. Establishment of a competitive electricity market . 3.1.1.1. Three-phase path . 3.1.1.2. Plan to implementation 3.1.2. Orientation for electricity supply . 3.1.2.1. Increase supply capacity . 3.1.2.2. Encourage a wide range of energy sources 3.1.2.3. Orientation to support renewable energy . 3.1.2.4. Develop transmission system 3.1.2.5. Financial support for electricity supply 3.1.3. Orientation for electricity demand . 3.1.4. Orientation for price settlement . 3.2. Some specific solutions . 3.2.1. For supply side . 3.2.1.1. Cooperate with private and foreign investors . 3.2.1.2. Reduce distribution losses 3.2.1.3. Consider the option to settle price of electricity seasonally . 3.2.1.4. Widely publish information on three-price model 3.2.2. For demand side . 3.2.2.1. Rent energy ******** services . 3.2.2.2. Adjust electricity consumption manner based on three-price model 3.2.2.3. Consume small-sized energy generation system for households and buildings 3.2.3. For government and competitive authorities 3.2.3.1. Adjust tax levied on imported energy – saving equipments 3.2.3.2. Support research and assessment on power potential of Vietnam 3.2.3.3. Fulfill legal framework to support the application oaf alternative energy equipment . CONCLUSION . BIBLIOGRAPHY LIST OF GRAPH AND TABLES .