The direct power purchase agreement (DPPA) mechanism is considered a foundation to build a competitive power market, according to Deputy Prime Minister Tran Hong Ha.

Addressing a meeting held in Hanoi on May 14 to discuss a draft decree on DPPA, developed by the Ministry of Industry and Trade,  the Deputy Prime Minister noted that State management will only focus on ensuring the national energy security while enterprises, whether state-owned or private, can compete equally.  

The DPPA decree needs to clarify participants, responsibilities and obligations of parties to ensure economic benefits and grid safety and develop policies to encourage the use of green and renewable energy to get green credits, according to Mr. Ha.

The draft regulates the direct power purchase to be conducted via the national grid and separate lines, implementation procedures and responsibilities of relevant parties, according to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan.

Accordingly, direct power purchase through separate lines can be applied to customers who are located near generation sources with the prices agreed upon the generators and customers.

Direct power purchase through the national grid will be applied to customers who are located far the generation sources and conducted via the spot electricity market with fees including transmission, distribution, dispatching, trading operation, and others.

The decree is expected to meet consumers’ demand for clean energy and encourage investment in sustainable development of renewable energy and development of a competitive power market.