Vingroup's energy arm proposes selling electricity directly to end-users

VinEnergo, a subsidiary of Vietnam’s leading private conglomerate Vingroup, has proposed direct electricity sale to end-users instead of via state utility Vietnam Electricity (EVN) currently.

The company made the proposal while giving feedback to a draft parliamentary resolution aimed at removing obstacles to the development of national energy for the 2026-2030 period, which is compiled by the Ministry of Industry and Trade (MoIT).

It commented that the draft does not include provisions allowing electricity retailers operating in residential areas, urban developments, commercial, service zones and similar models to participate directly in the Direct Power Purchase Agreement (DPPA) mechanism.

According to VinEnergo, in many residential and urban areas, electricity demand is highly concentrated. However, electricity supply remains entirely dependent on EVN, with no current mechanism allowing retail electricity providers affiliated with urban developers to join the competitive electricity market.

The firm believed that introducing provisions for electricity retailers in residential and urban zones is necessary to reflect actual demand and support the integrated development of energy infrastructure alongside urban infrastructure.

Such a move would also promote transparency and unified supply management, while encouraging private investment in power infrastructure, enhancing competitiveness and energy efficiency, and protecting the legitimate rights of residents in these areas.

Therefore, VinEnergo proposed the inclusion of a clause allowing retail electricity units in residential areas, urban zones, and similar models to participate directly in electricity trading.

Specifically, the proposal suggests that electricity retailers operating in residential areas, urban developments, commercial, and service zones or similar models as defined by competent authorities should be allowed to participate directly in the DPPA mechanism, provided they meet certain conditions.

If the investor of a residential or urban project owns the power grid infrastructure, they should be allowed to sell electricity directly to end-users within that area, it says.

In response to this proposal, the MoIT acknowledged that expanding customer choice in electricity suppliers is a correct long-term direction. However, it emphasized that more time is needed to assess the actual demand for clean energy among residential consumers in urban areas (linked to Renewable Energy Certificates – RECs) and that this must align with Vietnam’s overall roadmap for developing a competitive retail electricity market.

Currently, the DPPA mechanism is only an initial step towards a fully liberalized electricity retail market, it noted.

Thus, the ministry held that competitive mechanisms like DPPA should only be extended to retail electricity providers after the competitive retail market has operated stably and supported by a robust legal framework that ensures consumer protection.

Earlier, VinEnergo also gave comments on an MoIT proposal in the draft on an offtake of no less than 75% of the average annual electricity output for LNG-to-power projects.

While agreeing with the 75% minimum offtake rate, the firm proposed extending the term to up to 25 years (compared to the current draft's 10 years) for projects entering commercial operation between January 1, 2030 and December 31, 2031.

For projects that begin operations earlier, from January 1, 2026 to December 31, 2029, VinEnergo suggested a minimum offtake rate of no less than 90%, also applied over a debt repayment period of up to 25 years, significantly higher than the 75% and 10-year limits proposed in the draft.

VinEnergo was established on March 12, 2025, with headquarters at the Symphony Office Building in Hanoi. The company’s core business is in electricity generation and electrical equipment manufacturing.

Regarding ownership structure, Vingroup chairman Pham Nhat Vuong - Vietnam's richest man by stock market assets - holds 71% of the shares; his eldest son, Pham Nhat Quan Anh, 5%; and his second son, Pham Nhat Minh Hoang, 5%. The remaining 19% is owned by Vingroup.