Scenario: a factory director hears “you will soon choose your power retailer” and asks: “When — and will it be cheaper than EVN?” The straight answer: the roadmap exists, but “cheaper” is not the default — a competitive market brings choice, plus price-volatility risk businesses have never had to manage.
Roadmap: wholesale first, retail later
Vietnam’s power market follows a three-level roadmap: competitive generation → competitive wholesale market (VWEM) → competitive retail market. VWEM now operates with directly participating generators (including DPPA-eligible plants). The competitive retail market is being piloted, moving toward letting eligible customers choose their power retailer instead of buying only from Power Corporations as today. Exact timing depends on guiding documents under the new Electricity Law — businesses should follow rather than guess.
Impact on business power prices: two sides of one coin
Upside: retailer competition can bring flexible pricing packages (time-of-use, long-term fixed, indexed prices), better service and — for large customers — bargaining power never had before. Risk side: market power prices swing with supply and demand (dry season, plant outages, fuel prices) — businesses used to EVN’s stable retail tariffs will face power price risk for the first time, like FX or commodity risk. The lesson from opened markets: businesses do not die from high prices but from sudden spikes they cannot react to.
Preparation: long-term contracts vs market prices
The smart strategy is to hedge: part of consumption under long-term fixed-price contracts (cost stability), part on market prices (capturing low-price periods) — the split depending on risk appetite and load profile. Plus: tracking wholesale market prices like FX rates, and considering DPPA (Decree 57/2025/ND-CP) as a “green long-term contract” in the procurement portfolio.
Recommended actions
1. Follow the retail-market roadmap — do not guess timing. 2. Build power price-risk management capability now (like FX management). 3. Design the procurement portfolio: long-term + market + DPPA. 4. Train procurement teams on power market pricing.
Frequently Asked Questions
What is the competitive retail power market roadmap?
A three-level roadmap: competitive generation → competitive wholesale market (VWEM, operating) → competitive retail market (being piloted). Moving toward letting eligible customers choose power retailers. Exact timing depends on guiding documents under the new Electricity Law.
When can businesses choose their power supplier?
When the competitive retail market formally operates with a complete legal framework — currently in pilot phase. Businesses should follow guiding documents rather than guess timing, and build price-risk management capability now.
Long-term power contracts vs market prices: how to choose?
Hedge: part of consumption under long-term fixed-price contracts (cost stability), part on market prices (capturing low periods) — the split by risk appetite and load profile. Include DPPA as a “green long-term contract”.
How to manage power price volatility risk?
Like FX/commodity risk management: track wholesale market prices regularly, diversify the procurement portfolio (long-term + market), and set alert thresholds when prices exceed plan. The lesson from opened markets: businesses die from sudden spikes they cannot react to, not from high prices.
Will the competitive retail market make power cheaper?
Not by default. Competition brings choice and flexible pricing, but market prices swing with supply and demand — sometimes cheaper, sometimes dearer than today’s stable retail tariffs. The real benefit is bargaining power and service, not “guaranteed cheap prices”.
How does DPPA relate to the competitive retail market?
DPPA (Decree 57/2025/ND-CP) lets large customers sign forward contracts buying directly from renewable sources — a “green long-term contract” in the procurement portfolio, independent of choosing retailers in the competitive market.
