Wednesday , February 28 2024

Government mulls private sector role in electricity transmission

The government has proposed that the private sector is allowed to invest in power transmission projects.

One of the amendments to the Electricity Law proposed by the government is allowing all economic sectors, including the private one, to build power transmission networks, excluding grid projects implemented by the state according to national electricity development plans. The National Assembly Standing Committee discussed the amendment Wednesday.

Most members of the National Assembly’s Science, Technology and Environment Committee have agreed with the government’s proposal.

National Assembly Chairman Vuong Dinh Hue noted that the state currently has a monopoly in electricity transmission; so, if the proposal is approved, all economic sectors, including foreign investors, will be permitted to invest in developing transmission lines, including important ones like North-South 500-kV lines.

National Assembly Vice Chairman Nguyen Khac Dinh said the private sector should not be allowed to build power lines with high voltages of 500 kV or more.

Nguyen Hong Dien, Minister of Industry and Trade, said the draft law would specify that 500-kV and 800-kV power lines will only be built by the state; and lines with voltage of below 500 kV, like 100 kV and 220 kV, can be built by all economic sectors, including the private sector.

If the private sector is allowed to build transmission lines, state-owned enterprises will no longer have to annually invest some VND11 trillion ($478 million) in constructing them, the minister said.

“Currently, foreign investors in the electricity sector account for over half of all private power projects, so there is no reason why they should not invest in electricity transmission,” Dien noted.

The draft amendments for the law on electricity are scheduled to be submitted to the National Assembly for approval at a session held later this year.

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