Samsung appreciates Vietnam’s DPPA to expand renewable energy purchases: CEO

Samsung Electronics Vietnam (SEV) will be able to strengthen its institutional foundation for securing access to renewable energy thanks to a new decree by the Vietnamese government on Direct Power Purchase Agreements (DPPA), the electronics giant said.

Samsung, SEV’s parent company, said in a statement on its website on Tuesday that the DPPA will allow companies to buy renewable energy from private producers without intermediaries, provided they commit to signing renewable energy contracts above a certain scale with private producers, not just state-owned Vietnam Electricity (EVN).

Previously, businesses mainly obtained renewable energy through small solar panels installed on the roofs of their commercial properties or by purchasing Renewable Energy Certificates (RECs).

According to the statement, Samsung has been continuously working with various stakeholders, including the Vietnamese government and civil society organizations, to implement the DPPA system and the climate strategy.

Since discussions on the DPPA first began in 2019, the tech giant has stressed the need to introduce a renewable energy 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 sustainable manner.

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

“Through the DPPA, we plan to engage with large renewable energy producers, proportionate to the size of Samsung Electronics Vietnam’s operations, and make competitive purchases of renewable energy,” said Executive Vice President Joo Ho Choi, General Manager of Samsung Vietnam Complex.

“We will continue to work with the Vietnamese government to develop renewable energy infrastructure in Vietnam,” the executive added.

Samsung Electronics’ four Vietnamese subsidiaries reported revenue of KRW 81,146.7 billion (USD 60.83 billion) in 2023, down 11.83% year-on-year, and a combined net profit of KRW 5,263.1 billion (USD 3.95 billion), down 13.09%.

The four companies reported improved performance in 2024, with total revenue of KRW 21,983.9 billion (USD 15.96 billion) in the first quarter of 2024, up 4.7% year-on-year, and net profit of KRW 1,583 billion (USD 1.15 billion), up 12.5%.

Samsung Electro-Mechanics (SEM), Samsung’s semiconductor and camera module unit, and Samsung SDI, its battery unit, achieved 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 came into force on July 3.

It defines large consumers as those who used an average of at least 200,000 kWh per month over the last 12 months. Businesses that used energy for less than 12 months will also be considered large consumers if they used at least 200,000 kWh per month.

According to the decree, renewable energy includes solar energy, wind energy, small hydropower, biomass energy, geothermal energy, wave energy, tidal energy, ocean current energy and roof-mounted solar energy.

The decree focuses on two types of energy purchases: through private power lines and through the national grid. In the case of the former, sellers and consumers can negotiate prices independently.