Continuing the agenda of the First Extraordinary Session of the 15th National Assembly, this morning, January 6, the National Assembly held group discussions on the draft Law amending and supplementing a number of articles of the Law on Public Investment, the Law on Investment under the Public-Private Partnership (PPP) method, the Law on Investment, the Law on Bidding, the Law on Electricity, the Law on Enterprises, the Law on Special Consumption Tax and the Law on Civil Judgment Enforcement (hereinafter referred to as the draft Law amending and supplementing 8 Laws – Reporter).
Will resolving one bottleneck create another?
National Assembly deputies basically agreed with the Government’s submission and the verification report of the Economic Committee on the need to amend and supplement a number of articles of the 8 Laws in order to promptly remove difficulties and obstacles in mechanisms, policies, processes and procedures to promote investment, support production and business activities, accelerate decentralization and delegation of authority; institutionalize the Party’s documents and implement the National Assembly’s resolutions.
Regarding the amendments to the Law on Electricity, National Assembly deputies agreed that, for the time being, a number of provisions related to electricity transmission in the Law on Electricity should be amended and supplemented. National Assembly Deputy Trần Tuấn Anh (Khánh Hòa) agreed that the amendments were necessary to create a solid legal basis for promoting the role of the private sector and social resources in investing in the construction of power grids and electricity transmission systems. We have practical experience in mobilizing private investment to upgrade the electricity transmission system to relieve capacity bottlenecks caused by the rapid development of renewable energy power plants in recent years. In practice, this has proven to be the right direction and is also consistent with the spirit of Resolution 55-NQ/TW of the Politburo. However, there are currently no specific regulations or legal provisions to determine the operation of privately invested power grids in relation to the operation of the national power grid managed by the State.
In addition, Deputy Trần Tuấn Anh also said that there must be a clear concept and regulations to ensure the security of the national power grid system. The State’s monopoly role in system operation must be comprehensive in order to ensure the most important foundation of the power network. “In short, there must be a very clear concept, together with specific accompanying regulations,” he said.
Sharing the same view, National Assembly Deputy Nguyễn Thị Lệ Thủy (Bến Tre) raised the issue that the handover of assets in the electricity sector still lacks regulations and methods for determining their value and accounting for such assets. In practice, private investors have invested heavily and, in some cases, even handed over assets at a value of zero. The question is why investors can still make profits after investing such large amounts in assets? Could it be that the policies for attracting investment in wind and solar power are so favorable that investors are willing to spend such amounts without needing to recover the costs? According to Deputy Thủy, this is an issue that needs to be addressed when amending the Law on Electricity this time.
The amendments to the Law on Electricity are consistent with Resolution 55-NQ/TW of the Politburo and Vietnam’s national energy development strategies, as well as international commitments made and signed by Vietnam at the United Nations Climate Change Conference (COP26). However, the most important thing is to ensure national energy security and power grid safety, rather than merely setting the goal of attracting private investors, which could lead to the massive investment seen in recent years. If the Law on Electricity is amended only to attract private investment in the electricity transmission grid without paying attention to the national power grid, according to Deputy Nguyễn Thị Lệ Thủy, it will “resolve this bottleneck but create another bottleneck”. Several substations invested in by private enterprises in recent years have all connected to our 500 kV backbone. How to clearly define the roles of private investors in managing, operating and connecting to the grid in order to ensure the safety of the national power grid has yet to be reflected in the draft Law.
Need for common and consistent regulations
Pointing out that different localities are currently applying different approaches, National Assembly Deputy Nguyễn Quang Huân (Bình Dương) said that common and consistent regulations from the central level are urgently needed. “For example, the process by which localities select investors for waste-to-energy projects is currently very unclear. Some localities apply the old bidding process. Meanwhile, waste-to-energy projects are not the same as other BOT projects because their distinctive feature lies in the technology. However, some localities require investors to present their technology and then submit their prices, after which the bidding documents are prepared and the investors’ documents are disclosed, whereas bidding principles require bidding documents to remain confidential; otherwise, this will lead to discrepancies and a lack of transparency,” he said.
Regarding Article 4 of the Law on Electricity, which stipulates that the State has a monopoly over the construction and operation of large power plants, Deputy Nguyễn Quang Huân said that the definition of “large power” needs to be made more specific, including how large and under what criteria. For example, should offshore wind power projects with capacities of several Gigawatts be considered large-scale power projects? In the future, when Vietnam develops solar power, other countries may have solar power technologies capable of generating electricity at night, meaning that a foreign investor entering Vietnam would have to invest approximately 1–2 Gigawatts. With such a large and new technology, if investment were limited to only a few hundred Megawatts, investors would not participate. Therefore, the deputy proposed that clear regulations and definitions be established for implementation.
Regarding connection rights, if the first enterprises have invested their own money to build electricity transmission lines connecting to EVN’s main grid and subsequent enterprises also connect to those lines, they should have the right to do so but must pay a fee to ensure equality among enterprises. In practice, there have been cases where enterprises investing first suffered disadvantages compared with those investing later. In addition, the Law on Investment clearly affirms the right to protection of property, and when enterprises investing in grid connections hand over those connections to EVN, if EVN allows another enterprise to connect to the electricity grid without consulting the investing enterprise, according to the Bình Dương National Assembly deputy, this would infringe upon the enterprise’s property rights.
Source: Dai Bieu Nhan Dan Newspaper