committee that oversees the unit responsible for the plans, the Institute of Energy draws on parallel plans for gas, coal, and industrial sectors (e.g. steel) as inputs. After internal government consultation, power system plans are formally approved by a Prime Minister Decision.

**Table 3: Institutional arrangements for power sector planning and procurement in Vietnam and comparators, 2015**

||**Colombia**|**Peru**|**Philippines **|**Vietnam**|**International**<br>**benchmark**|
|---|---|---|---|---|---|
|**Planning andprocurement**|**95%**|**77%**|**59%**|**59%**|**70%**|
|Generationplanning|86%|43%|71%|71%|56%|
|Procurement ofgeneration|95%|90%|100%|50%|85%|
|Transmissionplanning|100%|75%|50%|100%|72%|
|Transmissionprocurement|100%|100%|17%|17%|64%|

Note: Scores based on index developed for the Rethinking Power Sector Reform Project, where 100% denotes good practice. For detailed planning and procurement index, see Annex.

**Wholesale markets would change the role of generation planning.** The current approach to transmission planning is expected to continue following the proposed full implementation of the competitive wholesale electricity market from 2021. The future role of generation planning following the introduction of a wholesale market at this stage is less clear. The PDP to date is based entirely on the premise of a central planner and does not conform to the view of a market. In principle, as the sector departs from the single-buyer model in the future, generators will independently contract with the PCs, not with EPTC. Furthermore, PCs decisions should be guided by current and projected wholesale market prices, which may vary from the plan. If so, the generation plan should become indicative or informative, rather than being mandatory as it has been interpreted to date.

**Vietnam’s institutions for power sector procurement have been assessed as relatively weak, especially for transmission.** However, this is not the case where ODA funding is concerned **.** In terms of procurement, generation is rated 50 percent and transmission plans 17 percent in terms of good practice factors for success (Annex Table B). Vietnam lags some countries in the creation of a specific framework for procurement of new power generation plants or new transmission lines. International competition is allowed for entry of new generation, but not public auctions or unsolicited bids (as the latter two methods have been associated with corrupt practices). All investment projects in transmission facilities are most often awarded to the incumbent transmission company as this is seen to be an efficient process particularly when the incumbents are providing satisfactory services.

# _3.2 User access and affordability_

## _3.2.1 Performance_

**Vietnam achieved high rates of access to electricity, well before embarking on market reforms.** In 1990, the share of households with a grid electricity connection was less than 14 percent. By 1996, the household grid electrification rate had reached 61 percent. By 2005 when the Electricity Law was promulgated, the rate was 87 percent. Universal access was reached around 2011 (Figure 6).

**Electricity consumption per capita has increased rapidly.** Average per capita electricity consumption in 1990 was less than 200 kWh/year, which was enough only for general lighting and a few low-power appliances. By 2015 it had reached 1400 kWh/year and by 2018 it had reached 2100 kWh/year, enough for high-power appliances such as air-conditioning units. Vietnam’s economy is energy-

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