Vietnam Businesses Adjust Production as Peak Electricity Prices Shift to Evenings

The Ministry of Industry and Trade's decision to shift peak electricity pricing to the evening hours, from 5:30 PM to 10:30 PM, is prompting significant adjustments for Vietnamese businesses. Previously, peak hours were during the day, allowing manufacturers to utilize lower off-peak rates during the night. Now, companies like Hiep Phat Mechanical and Electronic Co., Ltd. are recalculating their production strategies. Mr. Bui Thanh Luan, the company's director, stated that they plan to consolidate production for large machinery during the day and operate smaller machines in the evening. Furthermore, they are considering investing approximately 3 billion VND in energy storage systems to purchase electricity at cheaper rates overnight for use during peak hours. This strategic shift aims to mitigate the impact of higher electricity costs on their overall production expenses. While this presents challenges, some businesses see potential benefits. Mr. Kieu Huynh Son, General Director of Viet Steel Machinery and Products Co., Ltd., noted that the evening peak hours could be more manageable for businesses operating two shifts, allowing for better production planning during the day. He also emphasized the ongoing efforts to improve energy efficiency, including investing in solar power and upgrading technology, as electricity costs, though currently under 5% of their product costs, are a critical factor in maintaining competitiveness, especially with tightening energy supplies. For service businesses, however, the evening peak pricing is expected to have a notable impact on operating costs.

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We use a lot of electricity, so we must always find solutions to optimize production costs, especially electricity usage. With the changed hours, businesses will focus on production during the day to adjust evening operations to only run small-capacity machines. We are also considering investing about 3 billion VND in a storage system to buy cheap electricity at night to proactively manage power sources at reasonable costs.