Australia shares energy regulation approach with Vietnam

Energy experts from the Australian Energy Regulator (AER) travelled to Vietnam in late May to share knowledge on Australia’s approach to energy market regulation with the Electricity Regulatory Authority of Vietnam (ERAV).

With the support of Australia’s Partnerships for Infrastructure (P4I) initiative, 3 AER staff delivered a 3-day workshop for ERAV in the central province of Thừa Thiên Huế from 29 to 31 May. The workshop covered the regulatory issues associated with the integration of renewable energy into the energy market, and how energy regulation and governance can act as enablers of the energy transition.

Opening remarks were delivered by Mr Pham Quang Huy, Deputy Director General of ERAV, who explained the need for energy market regulation to support Vietnam’s ambitious decarbonisation agenda through the eighth national power development plan, or PDP8, released in May 2023.

“Establishing the right regulatory frameworks can create competition in the electricity market and attract the private investment needed to achieve Vietnam’s renewable energy targets,” he said.

“Vietnam and Australia’s electricity market and energy transition journey have a lot of similarities and we value the partnership with the AER to help us learn from the Australian experience and develop our own energy market regulation.”

Mr Ben Davis, First Secretary at the Australian Embassy in Hanoi, welcomed participants and said Vietnam and Australia have a lot to learn from each other as they both navigate the path to net zero.

“The partnership between ERAV and the AER is an important example of how we can cooperate on meeting our climate change commitments, and share energy regulatory challenges and solutions,” said Mr Davis.

Under PDP8, renewable energy, including solar, onshore wind and offshore wind, is expected to play an increasingly important role in Vietnam’s energy mix by 2030. Rapid energy sector growth has occurred alongside major structural reforms by the Government of Vietnam to liberalise the power sector and introduce a wholesale and retail electricity market. Energy legislation and rules are needed to monitor the operation and compliance of these energy markets.

The AER regulates wholesale and retail energy markets and energy networks in eastern and southern Australia, under national energy legislation and rules.

Mark Feather, AER’s General Manager of Strategic Policy and Energy Systems Innovation, said the workshop in Vietnam was an opportunity to share how the reform of Australia’s regulatory and market frameworks for energy are supporting Australia’s clean energy transition.

“Australia has sought to evolve and reform its regulatory frameworks to help deliver an affordable and reliable clean energy transition for energy consumers. As Vietnam establishes its own energy markets, we are sharing Australia’s regulation approach to help inform their own energy transition,” said Mr Feather.

The workshop began with an overview of Vietnam’s wholesale electricity market by ERAV and its proposed development roadmap. This was followed by presentations on Australia’s energy market by AER, including the integration of renewable energy and impacts on wholesale market design and regulation, and information on the role and functions of an energy regulator and how these are evolving.

Information was also provided on the regulatory mechanisms for integrating distributed power sources in the energy retail market and direct power purchase agreement mechanisms. The final day of the workshop included a site visit to Phong Dien solar farm which supplies clean electricity to around 33,000 Vietnamese households. 

The workshop in May is the first of 2 workshops being held in 2023 between ERAV and AER to advance cooperation under their 2017 Memorandum of Understanding. A second workshop on regulatory programs and mechanisms is scheduled for late 2023.

Prior to travelling to Vietnam, the 3 AER delegates attended an ASEAN-Australia knowledge exchange workshop on best regulatory practice for increased renewable energy in Luang Prabang, Laos. This workshop was held as a side event during the ASEAN Energy Regulators Network annual meeting held 24 to 26 May 2023.

ERAV and AER signed a long-term agreement in 2017 to strengthen capability in energy regulation through a series of knowledge exchange activities, recommencing with an energy roundtable discussion in April 2022 following COVID-19 disruptions.