US applauds Vietnam's issuance of direct power purchase agreement rules

The U.S. Mission to Vietnam, having supported Vietnam's Ministry of Industry and Trade in designing and developing the direct power purchase agreement (DPPA) decree, has applauded the Vietnamese government for approving the DPPA decree.

In a Friday statement, the U.S. Mission to Vietnam said the U.S. Agency for International Development (USAID) would continue to partner with the Ministry of Industry and Trade on the DPPA’s implementation.

"Our Comprehensive Strategic Partnership marks a new era of collaboration between our two nations, and the DPPA is a testament to our deepening ties and shared commitment to sustainable development," said U.S. Ambassador to Vietnam Marc Knapper.

When implemented, the new policy will allow businesses in Vietnam to purchase electricity directly from private firms producing renewable energy, enabling them to power their operations with 100% renewable energy, according to the U.S. Embassy.

This will help Vietnam attract private sector investment in renewable energy while meeting the needs of corporate leaders seeking to integrate renewable energy into their operations and achieve their corporations’ emissions reduction targets, the embassy added.

"The U.S. Mission to Vietnam through the USAID is honored to have partnered with the Ministry of Industry and Trade over several years to reach this milestone," said USAID/Vietnam Mission director Aler Grubbs.

"The DPPA will enable businesses to reduce their carbon footprint while also enabling Vietnam to accelerate its clean energy transition and advance its goal of net-zero emissions by 2050. The United States remains Vietnam’s partner as you roll out this important initiative, and expand Vietnam’s access to clean and renewable energy," Grubbs added.

The DPPA will enable international and domestic businesses in Vietnam to achieve greater carbon-reduction toward their net-zero goals while accelerating the country’s clean energy transition.

The United States partners with Vietnam to reduce greenhouse gas emissions and increase resilience to climate change for those most vulnerable to its impacts, by, in part, supporting a fair and inclusive energy transition, the embassy stated.

"The United States is a committed partner of Vietnam in advancing the country’s transition to a clean, secure, and market-based energy sector, in line with our two countries’ shared priorities under the Comprehensive Strategic Partnership," it added.

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.