Vietnam allows direct renewable power purchases starting July 3

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

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; or via the national grid. With the former, sellers and consumers can negotiate prices on their own.

Terms regarding power purchase via the national grid focus on renewable energy developers with capacity of at least 10 MW, consumers with electricity connection of at least 22 kV, and electricity retailers (within industrial park, economic zones, exporting-processing zone, industrial clusters, high-tech parks, high-tech agricultural parks) assigned by large consumers to purchase power from state utility Vietnam Electricity (EVN).

Renewable energy developers must make daily reports on their output so electricity regulators can manage power plants accordingly.

In case consumption is lower than the electricity output of power developers in a particular period, relevant sides must pay EVN fees and costs related to power transmission, management, power loss on grid and other factors.

In case consumption is higher than the output of power developers in a period, payment will follow the above-mentioned rules for the renewable energy portion. For the remaining portion, retail prices set by the Ministry of Industry and Trade for power supplied by national utility EVN will apply.

Per the ministry’s Decision 2941 dated November 8, 2023, retail electricity prices for manufacturing businesses range between VND1,044 and VND3,314 (4.1-13 U.S. cents) per kWh, based on different settings.