Learning from Power Sector Reform Experiences : The Case of Vietnam
Vietnam's power sector has developed rapidly since the 1990s to become a top performer among developing countries. This success has occurred mostly under a state-owned utility, Electricity Vietnam. Select market-oriented reforms to date have a...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/757761583166223011/Learning-from-Power-Sector-Reform-Experiences-The-Case-of-Vietnam http://hdl.handle.net/10986/33412 |
| Summary: | Vietnam's power sector has
developed rapidly since the 1990s to become a top performer
among developing countries. This success has occurred mostly
under a state-owned utility, Electricity Vietnam. Select
market-oriented reforms to date have also had some positive
impact. By the late 1990s, the Government realized the need
to gradually introduce competition to ensure long-term
sustainability without jeopardizing security of supply for
the fast-growing economy. Vietnam's 2004 Electricity
Law has provided the framework to develop a competitive
power market, unbundle Electricity Vietnam, set prices that
better reflect costs, promote private investment, and
establish a regulatory authority. Today, state-owned
entities continue to dominate the sector. Whereas the power
market is partially competitive, improved operational
efficiency and financial performance of generators in this
market has contributed to keeping generation costs
relatively low. Plans are broadly on track for further
extensive reforms, including a clean energy transition.
Lessons include that state-centric institutions can develop
the power sector with top-level government commitment,
highly-qualified staff, and consensus among sector
institutions. Gradual reforms offer an opportunity to learn
by doing; yet, the sequence of reforms matters. Introducing
market mechanisms ahead of other elements may limit the
market effectiveness and even make subsequent reform steps
more difficult. |
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