Ministry of Industry and Trade Revises Electricity Generation Pricing Framework and Service Cost Determination Methods
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The revision aims to update the formula system, price determination criteria, and expand the scope of applicable entities to align with the practical requirements of the electricity market operation.
According to Circular 54, several provisions in Circular 09 have been adjusted, notably the addition of new power plant groups required to apply the new electricity generation pricing framework. These include plants whose pricing period or power purchase agreements have expired; BOT projects fully transferred to the state; and small-scale renewable energy plants no longer eligible for the avoided cost pricing mechanism. This framework will serve as a crucial reference for market participants after the conclusion of incentive periods or long-term contracts.
Circular 54 also clearly defines its scope of application to organizations and enterprises owning and operating power plants within Vietnam. Exemptions include multi-purpose strategic hydropower plants; renewable energy projects currently benefiting from the avoided cost mechanism; units exclusively providing ancillary services; and standalone battery energy storage systems.
A notable innovation is the introduction of the “flexible power plant” concept into legal documents. This encompasses plants using Reciprocating Internal Combustion Engine (RICE) or Aero-Derived Gas Turbine (Aero-GT) technologies, offering rapid start-up, modular design, and suitability for balancing supply-demand fluctuations and supporting grid stability amidst increasing renewable energy penetration.
Additionally, concepts and calculation methods related to pumped storage hydropower plants have been refined. These updates accurately reflect the unique characteristics of energy storage technology by leveraging elevation differences between reservoirs for pumping, storage, and electricity generation based on system needs.
Circular 54 also revises various aspects of the electricity generation pricing calculation methodology, including investment cost determination, discount rates, loan interest rates, domestic and foreign capital structures, and other input parameters. These parameters are clearly defined regarding data sources, averaging periods, and legal bases to ensure transparency, scientific rigor, and practical implementation.
The Ministry of Industry and Trade announced that Circular 54 will take effect from November 21, 2025. During implementation, if any issues arise, relevant organizations and individuals are responsible for reporting them to the Ministry for consideration and adjustments to ensure alignment with the actual dynamics of the electricity market and system operation requirements.
– 8:30 PM, November 24, 2025
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