From Viet Nam News:
Ceiling prices set in accordance with each power station’s capacity technology and costs have been suggested for Viet Nam’s proposed competitive energy market in Viet Nam.
British energy-industry consultant Campbell Carr made the proposal at a seminar to discuss the design of a competitive power market in Ha Noi yesterday.
The Trade and Industry Ministry’s Electricity Regulatory Authority of Viet Nam, ERAV, organised the discussion as part of the project to overcome difficulties in organising the electricity market.
The Public-Private Infrastructure Advising Facility, PPIAF, sponsors the project; Campell Carr is its principal consultant.
Application of a ceiling price would avoid the risk of market domination by generators who might otherwise increase their prices to influence the market price, the consultant said.
A floor price should apply but it would need to be the same for all power stations to avoid the risk of market manipulation through lower prices.
I don’t know enough about Viet Nam’s power industry to comment productively, but if I were evaluating the proposal I’d ask the consultants about other markets in which similar approaches have been successfully implemented.