Estimation of the Future Electricity Price Surcharge for the Integration of Wind and Solar Power into the Vietnamese Electricity System

The Vietnamese electricity market is expected to see a significant investment in wind and solar power in the upcoming years. Yet the current feed-in tariff mechanism (FIT) which maps the extra cost on the state budget seems not to be the appropriate financial instrument to handle the expected robust growth in the future. In this work, a methodology is learned and developed to determine the future progress of renewable electricity surcharge (RE surcharge) for Vietnam which based on a financial instrument that transfers the extra cost to electricity consumers instead to the state budget. Assuming the share of wind and solar electricity production reaches 20% by 2035, and the growth rate is determined based on the diffusion rule, we have found out that a slight increase in the surcharge (0.10 US cents/kWh in 2020, and 1.07 US cents/kWh after two decades) will be added to the electricity price for consumers. Additionally, estimated in the reference case, by 2032 for solar photovoltaics, and 2034 for onshore wind power, the electricity generation price including surcharge will be lower than the average wholesale market price, which means that the feed-in tariffs will become out of date.