Samsung Thai Nguyen, TTC solar plant become first participants in Vietnam's direct power purchase mechanism

Samsung Electronics Vietnam Thai Nguyen (SEVT) and TTC Duc Hue 2 Solar Power Plant have become the first entities to operate under Vietnam's direct power purchase agreement (DPPA) mechanism through the national grid from June 1.

SEVT and TTC Duc Hue 2 have completed all technical and legal procedures required to officially participate in the DPPA scheme, according to the National System and Market Operator (NSMO). Under the arrangement, SEVT acts as the electricity buyer, while TTC Duc Hue 2 supplies renewable power.

The deal marks the first practical implementation of Vietnam's DPPA mechanism since the governmental Decree 57/2025, which governs direct power transactions between renewable energy generators and large electricity consumers, took effect in March last year.

The framework allows electricity buyers and sellers to trade power through the national grid under bilateral agreements rather than purchasing solely through state utility Vietnam Electricity (EVN).

Under the contract, Samsung's manufacturing complex SEVT, located in Yen Binh Industrial Park, Van Xuan commune, Thai Nguyen province, is expected to receive around 70 gigawatt-hours (GWh) of renewable electricity annually, equivalent to the power consumption of approximately 17,000 Vietnamese households.

The arrangement is expected to reduce carbon dioxide emissions by about 46,000 tons per year.

TTC Duc Hue 2 Solar Power Plant, located in Tay Ninh province and developed by TTC Duc Hue-Long An Power JSC, has a designed capacity of 49 MWp. The project achieved commercial operation on May 19, incorporates a battery energy storage system (BESS), and joined Vietnam's competitive wholesale electricity market earlier this month.

During the negotiation and signing of this contract, Schneider Electric acted as the consultant for Samsung Electronics.

Na Ki-hong, general director of Samsung Vietnam, was quoted by the Vietnamese government's news portal as saying: "Through this first DPPA contract, we hope to contribute to promoting the development of Vietnam's renewable energy market, while actively supporting efforts to address the global climate change crisis."

Previously, in 2025, two other Samsung Vietnam entities, Samsung Electronics Vietnam (SEV) in Bac Ninh and Samsung Electronics HCMC CE Complex (SEHC) in Ho Chi Minh City had promoted the use of renewable energy through the deployment of on-site rooftop solar power projects. Currently, these two entities are working to supplement and increase their power supply via DPPA, the news portal added.

The DPPA mechanism has long been advocated by foreign-invested companies in Vietnam, which argue that the policy would help them to meet emisssion reduction commitments.

According to a survey conducted by the Ministry of Industry and Trade in late 2023, around 20 large companies sought to purchase electricity directly under the mechanism, with combined demand of nearly 1,000 MW.

At the same time, 24 renewable energy projects with total capacity of 1,773 MW expressed interest in selling electricity through the scheme, while another 17 projects with combined capacity of 2,836 MW were considering participation.

Samsung is Vietnam's largest foreign investor, with registered investments totaling tens of billions of dollars. In recent years, the South Korean technology group has accelerated efforts to increase the share of renewable energy used across its global manufacturing operations as part of its carbon reduction commitments.

Belgium-invested industrial zone developer Deep C in January this year raised concerns regarding Vietnam's direct power purchase agreement (DPPA) mechanism and renewable energy development, particularly the issue of "large electricity consumers".

According to the legal framework under Decree 57/2025 on DPPA, buyers in DPPA must be "large electricity customers," requiring an average consumption of 200,000 kWh per month.

Deep C argued that small and medium enterprises (SMEs) also have high demand for renewable energy to meet international sustainability standards, but they often fail to meet this minimum consumption threshold.

The comments, a feedback to the Ministry of Industry and Trade's (MoIT) draft decree on renewable energy, has been posted on the ministry's website.

The company also pointed out that the current rules do not reflect the technical realities of rooftop solar in industrial zones. These systems are typically decentralized, of small to medium scale, and connected via private internal grids without impacts on the national grid.