DPPA not applied to non-manufacturing consumers, Vietnam ministry insists

Vietnam’s Ministry of Industry and Trade does not plan to extend the direct power purchase agreement (DPPA) mechanism to non-manufacturing consumers using the national grid.

Direct power purchase refers to buying renewable energy directly from producers, not via Vietnamese state utility Vietnam Electricity (EVN).

In its draft decree to replace the current DPPA mechanism in Decree 80/2024, the ministry clarified that the electricity prices for non-manufacturing consumers are different from those for manufacturers, while the cross-compensation mechanism among different power buyers is already available.

The ministry (MoIT) also noted that it has yet to calculate the impacts on EVN and other power companies from possible addition of power buyers.

Decree 80/2024 on DPPA between renewable energy producers and "large consumers" took effect in July 2024. It defines large consumers as those who’ve consumed (not buying for re-selling) at least 200,000 kWh per month on average in the last 12 months and the voltage must be at least 22 kV.

Firms that have been consuming power for fewer than 12 months will also be deemed large consumers if they have consumed at least 200,000 kWh per month.

Such terms are unchanged in the latest draft decree.

The ministry aims to put the new draft decree into effect from February 1, 2025.

One of the most recent DPPA cooperations in Vietnam include one between Power Engineering Consulting JSC 2 (PECC2) and fashion brand H&M signed in November, and another between PECC2 and First Solar signed in December 2024.