Vietnam allows direct purchases of renewable energy from July 3

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 Wednesday.

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 or through the national grid. In the case of the former, sellers and consumers can negotiate prices independently.

The terms of purchasing energy through the national electricity grid apply primarily to developers of renewable energy sources with a capacity of at least 10 MW, recipients with an electricity connection of at least 22 kV, and retailers of electricity (within industrial parks, economic zones, export-processing zones, industrial clusters, high-tech parks, high-tech agricultural parks) commissioned by large customers to purchase energy from the state-owned utility company Vietnam Electricity (EVN).

Companies using renewable energy sources must report their production daily so that energy regulators can manage plants appropriately.

If, during a given period, electricity consumption is lower than its production by energy suppliers, interested parties must pay EVN fees and costs related to electricity transmission, management, energy losses in the network and other factors.

In the event that consumption is higher than the energy developers’ production in a given period, payment will be made according to the above-mentioned rules for the renewable energy part. For the remaining part, the retail prices set by the Ministry of Industry and Trade for energy supplied by the national utility EVN will apply.

According to Ministry Decision No. 2941 dated November 8, 2023, retail electricity prices for manufacturing enterprises range from VND 1,044 to VND 3,314 (4.1 to 13 US cents) per kWh depending on the settings.