Hanoi (VNS/VNA) - Rising production costs might force the VietnamElectricity (EVN) to raise retail power prices but no official decisions hadbeen made for this year, according to SSI Research.

In a recent report about the electricity industry, SSI Research pointed outthat the contracted output of thermal power plants decreased significantlymainly due to the increases in output of hydroelectricity and solar power.

Thermal power was also adversely affected by rising input costs, including coaland gas prices.

“The increase in input costs for the power system is mainly due to the highselling price of renewable energy, plus the increases in gas prices, whichis forcing EVN to try to control production costs,” the report wrote.

“It is likely that EVN will have to raise retail electricity prices topartially offset rising input costs, although EVN has not made any officialdecision for 2021,” SSI Research said.

According to SSI, average sales price of traditional power sources, includinghydroelectricity, gas-fired power and thermal power was 1,169 VND per kWh.

Comparing the average sales price (ASP) and feed-in-tariff (FIT), SSI Researchpointed out two scenarios.

If the FIT was kept the same at 8.38 cents per kWh, EVN must spend anadditional sum of around 12.7 trillion VND to switch to using solar energy or 17.7trillion VND if wind power was included.

In the second scenario, if the FIT was lowered to 7 cents per kWh as beingdrafted, the costs would increase by around 7.8 trillion VND or 10.7 trillion VND(including wind power).

With a seven per cent growth in power consumption nationwide, SSI said that itwould be difficult for renewable energy plants to run at full capacity. Inaddition, from the end of 2021 to 2022, there would be new wind power projectsbecoming operational.

According to the Ministry of Industry and Trade’s plan of power supply andnational power system operation in 2021, the total power output (bothdomestically produced and imported) was estimated at around 262.4 billion kWhthis year, not increasing much against 2020’s plan at 261.45 billion kWh.

However, the percentage of power generation sources changed significantly. Theoutput of renewable energy sources was expected to total 23.4 billion kWh, or8.9 percent of the total output of the power system.

Solar power output totalled 10.6 billion kWH last year, accounting for 4.3 percentof the total output of the power system./.