Vietnam is advancing its green energy goals with the signing of the Direct Power Purchase Agreement (DPPA) decree on July 3. This new policy allows large electricity consumers to buy renewable energy directly from producers, including solar, wind, hydro, biomass, and more. It aims to diversify the energy market and accelerate the use of clean energy.
What’s New
- Decree 80 establishes two DPPA models: the Private Line Model (PLM) and the Grid-Connected Model (GCM).
- It focuses on large energy consumers and allows generators to bypass the Vietnam Wholesale Electricity Market (VWEM) through the PLM.
How DPPA Works
The DPPA provides two options for purchasing renewable energy:
- Private Power Lines: Large-scale renewable energy producers can build their own power lines to supply electricity directly to consumers, bypassing the national grid operated by Vietnam Electricity (EVN).
- National Grid Access: Renewable energy producers also have the option to use the existing national grid to sell electricity directly to consumers. This pathway is more suitable for smaller projects and allows broader participation in the DPPA program.
Key Regulations
Renewable energy generators must negotiate power purchase agreements with Vietnam Electricity (EVN) or other authorized entities, covering capacity, output, and pricing for any surplus energy that can be fed into the national grid. When buying from EVN or other retailers, prices are regulated by the Ministry of Industry and Trade.
Direct Trading Rules
Specific guidelines govern direct electricity trading via private connection lines:
- Large electricity users are allowed to buy and sell electricity with the Electricity Corporation or other approved electricity retailers.
- Both parties must mutually agree on the terms of the electricity purchase contract, in line with the Law on Electricity and other relevant regulations.
- The price of electricity will be agreed upon between both parties, with exceptions as detailed in the decree.
- Renewable energy producers must establish agreements with EVN or an authorized unit for any surplus electricity generated.
Easier Access for Corporations
The decree reduces the minimum consumption for corporate buyers to 200,000 kWh per month, down from the draft proposal of 500,000 kWh. While typical households aren’t eligible, around 7,700 corporate users meet the criteria, accounting for about 36.5% of total electricity usage.
This policy is expected to boost demand for renewable energy in Vietnam, helping the country transition towards a cleaner energy future.
In addition to purchasing green power through DPPA, adopting Renewable Energy Certificates (RECs) is recommended, especially for RE100 compliance. Visit here to explore RECs under DPPA.
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