IDEAS home Printed from https://ideas.repec.org/p/eep/report/rr2016035.html
   My bibliography  Save this paper

Electricity Pricing for North Vietnam

Author

Listed:
  • Nguyen Van Song

    (Economics and Rural Development Faculty, Hanoi Agricultural University)

  • Nguyen Van Hanh

    (Economics and Rural Development Faculty, Hanoi Agricultural University)

Abstract

The rapid economic growth in Vietnam has resulted in an increasing demand for electricity. This in turn translates to a higher rate of coal resource extraction and consequent rise in pollution of water and land resources.This study estimated the environmental costs associated with the electricity demand requirements of the coal electricity sector, as a component of the long-run marginal opportunity cost (LR-MOC) of electricity production. The LR-MOC has three components: Marginal Production Cost or direct cost (MPC), Marginal User Cost (MUC) and the Marginal Environmental Cost (MEC). The MEC is divided further into two components: Marginal Environmental Cost of coal mining (MEC1) and Marginal Environmental Cost of coal burning (MEC2). The MEC1 consists of on-site environmental cost and off-site environmental cost while the MEC2 is made up of control cost and off-site environmental cost. The total production cost per tonne of clean coal was 241,050 VND in 1998 and was estimated to be 343,679.70 VND in 2010. The marginal environmental cost of coal mining (MEC1) is 19,029.4 VND/per tonne in 2010 or 5.5% of production cost. Of the MEC1, on-site and off-site cost is about 3.6% and 1.93% of production cost, respectively.The LR-MOC of coal electricity is 771.9 VND/per kWh at transmission and 975.5 VND/per kWh at distribution. The MEC (MEC1 + MEC2) accounts for 16.6% at transmission and 13.9% at distribution level. In comparison to the current tariff, the cost of the total electricity in 2010 is 1.75 times higher. The most suitable technological options for pollution control in coal-fired thermal power plants are precipitators for Group A and bag filters and limestone injection for Group B2. The least abatement and damage cost is associated with environmental technology alternative 2 (ETA2) valued at 1,862 billion VND. Given the worsening environmental problems in Halong Bay, which is a coal mining area, and the overall deteriorating environmental situation due to coal-fired power plants in Vietnam, the current subsidy of 25-30% to production cost and electricity tariff should gradually be removed. In fact, the environmental cost should be included in electricity and coal prices.

Suggested Citation

  • Nguyen Van Song & Nguyen Van Hanh, 2016. "Electricity Pricing for North Vietnam," EEPSEA Research Report rr2016035, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2016.
  • Handle: RePEc:eep:report:rr2016035
    as

    Download full text from publisher

    File URL: http://www.eepsea.org/pub/rr/2001_RR10.pdf
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ratana Chuenpagdee, 1998. "Damage Schedules for Thai Coastal Areas: An Alternative Approach to Assessing Environmental Values," EEPSEA Research Report rr1998081, Economy and Environment Program for Southeast Asia (EEPSEA), revised Aug 1998.
    2. Maria Corazon Ebarvia, 1997. "Pricing for Groundwater Use of Industries in Metro Manila, Philippines," EEPSEA Research Report rr1997111, Economy and Environment Program for Southeast Asia (EEPSEA), revised Nov 1997.
    3. Adis Isangkura, 1998. "Environmental Valuation: An Entrance Fee System for National Parks in Thailand," EEPSEA Research Report rr1998091, Economy and Environment Program for Southeast Asia (EEPSEA), revised Sep 1998.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nguyen Van Song & Nguyen Van Hanh, 2016. "Electricity Pricing for North Vietnam," EEPSEA Research Report rr2016058, Economy and Environment Program for Southeast Asia (EEPSEA), revised Apr 2016.
    2. Brian Witt, 2019. "Tourists’ Willingness to Pay Increased Entrance Fees at Mexican Protected Areas: A Multi-Site Contingent Valuation Study," Sustainability, MDPI, vol. 11(11), pages 1-22, May.
    3. Euston Quah & Edward Choa & K. C. Tan, 2006. "Use of damage schedules in environmental valuation: The case of urban Singapore," Applied Economics, Taylor & Francis Journals, vol. 38(13), pages 1501-1512.
    4. Pradiptyo, Rimawan & Sahadewo, Gumilang Aryo, 2012. "On The Complexity of Eliminating Fuel Subsidy in Indonesia; A Behavioral Approach," MPRA Paper 40045, University Library of Munich, Germany.
    5. Udith Jayasinghe-Mudalige & Menuka Udugama, "undated". "Motives for Firms to Adopt Solid Waste Management Controls: The Case of Food Processing Sector in Sri Lanka," Working papers 60, The South Asian Network for Development and Environmental Economics.

    More about this item

    Keywords

    Hydropower; Vietnam;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eep:report:rr2016035. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Arief Anshory yusuf (email available below). General contact details of provider: https://edirc.repec.org/data/eepsesg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.