Samsung appreciates DPPA in Vietnam, to expand renewable energy procurement: exec

Samsung Electronics Vietnam (SEV) will be able to strengthen its institutional foundations for securing renewable energy thanks to a new Vietnamese government decree on direct power purchase agreements (DPPA), the electronics giant said.

In a Tuesday statement posted on its website, Samsung, the parent firm of SEV, said the DPPA decree will allow enterprises to purchase renewable energy from private producers without an intermediary, provided that it commits to signing renewable energy contracts exceeding a certain scale with private producers, not just the state-owned Vietnam Electricity (EVN).

Previously, enterprises mainly procured renewable energy through small-scale solar panels on the roofs of their business sites or by purchasing renewable energy certificates (RECs).

Samsung has been working tirelessly with various stakeholders, including the Vietnamese government and civil society organizations, to introduce the DPPA system and put its climate strategy into practice, according to the release.

Since the first DPPA discussions began in 2019, the tech giant has emphasized the need to introduce a renewable energy procurement mechanism as soon as possible to achieve its net-zero carbon emissions goals, and has provided technical advice on how to implement the mechanism in a stable manner.

Samsung has also continued to communicate with stakeholders through the Asia Clean Energy Coalition (ACEC), a coalition of renewable energy buyers, in collaboration with sellers and financiers, to strategically shift policy in key Asian markets, including Vietnam.

“Through the DPPA, we plan to get in touch with large-scale renewable energy producers proportionate to the size of operations at Samsung Electronics Vietnam and make competitive purchases of renewable energy,” said executive vice president Joo Ho Choi, general director of the Samsung Vietnam Complex.

“We will continue to work with the Vietnamese government to advance Vietnam’s renewable energy infrastructure,” the executive added.

Four Vietnamese subsidiaries of Samsung Electronics reported revenue of KRW81,146.7 billion ($60.83 billion) in 2023, down 11.83% year-on-year, and combined after-tax profit of KRW5,263.1 billion ($3.95 billion), down 13.09%.

The four reported improvements in 2024, with combined revenues of KRW21,983.9 billion ($15.96 billion) in the first quarter of 2024, up 4.7% year-on-year, and post-tax profits of KRW1,583 billion ($1.15 billion), up 12.5%.

Samsung Electro-Mechanics (SEM) - the semiconductor and camera module arm of Samsung, and Samsung SDI - the battery arm, earned combined revenue of $2.36 billion in Vietnam in 2023, according to their separate financial statements.

Decree 80/2024 issued by the Vietnamese government on direct power purchase agreements (DPPA) between renewable energy developers and large consumers took effect on July 3.

It defines large consumers as those who’ve consumed at least 200,000 kWh per month on average in the last 12 months. 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.

Under the decree, renewable energy includes solar power, wind power, small-scale hydropower, biomass power, geothermal power, sea wave power, tidal power, marine current power and rooftop solar power.

The decree focuses on two types of power purchases: via private power lines and via the national grid. With the former, sellers and consumers can negotiate prices on their own.