Rooftop solar power, biomass power, and small hydropower,... will be allowed to participate in direct trading on the market for large electricity consumers, according to a proposal from the Ministry of Industry and Trade (MoIT).

According to this new draft decree on Direct Power Purchase Agreement (DPPA) between renewable energy generators and large electricity consumers, submitted by the MoIT on June 17, the direct power purchase can be conducted via the national grid and private transmission lines.

However, the latest draft included some additions, particularly in the types of renewable energy that can be traded directly through private transmission lines, not through Vietnam Electricity (EVN). 

Accordingly, the renewable energy sources listed in this mechanism include solar power, wind power, small hydropower, biomass, geothermal, ocean wave, tidal, marine current, and rooftop solar power systems. These projects are not limited in capacity but must be licensed for electricity operation or exempt from being licensed as per regulations. 

Waste-to-energy is not yet included in this mechanism because there are no clear regulations on whether it qualifies as renewable energy, according to the MoIT. This type of energy will be added if it is accepted by the competent authorities.

Currently, according to data from EVN, the country has more than 100,000 rooftop solar power projects with a total installed capacity of over 9,500 megawatt peak (MWp).

According to the National Electricity Development Plan 2021 to 2030 (Power Development Plan 8), the capacity of this energy source will increase by another 2,600 MWp by 2030.

The DPPA mechanism, if approved,  will help resolve issues for this type of energy, in addition to the self-production and self-consumption development policy being drafted by the MoIT.

According to the document submitted by the ministry to the government on June 17, wind and solar power projects that wish to participate in direct power trading via the national grid must have a capacity of over 10 MW.

The MoIT also maintains the proposal for two types of buyers, namely large electricity consumers with a demand of 500,000 kilowatt-hour (kWh) per month or more. For purchases through the national grid, retail electricity units will be allowed to participate in the market. Organizations and individuals can buy electricity for their own use, but they are not permitted to resell it to others.

The DPPA mechanism has been proposed for pilot implementation on many occasions by foreign-invested enterprises, as they believe this policy will positively impact competition in the energy sector. 

Talking to VET at  the Vietnam Connect Forum 2024, Mr Hong Sun, Chairman of the Korean Chamber of Commerce in Vietnam (KOCHAM), stated that Korean businesses wish to install rooftop solar power systems on their factories. This activity aligns with the global trend of sustainable development and helps ensure stable operations for businesses. 

Additionally, Korean enterprises want to be allowed to sell excess electricity at a lower price on days when their factories are not operational to generate additional revenue. The KOCHAM Chairman also cited examples from other countries with a DPPA mechanism that have benefited both the government and businesses alike.

A survey conducted by the MoIT at the end of last year showed that around 20 large enterprises wish to purchase electricity directly, with a total demand of nearly 1,000 MW.

Additionally, there are 24 renewable energy projects with a combined capacity of 1,773 MW that want to sell electricity through the DPPA mechanism along with 17 projects with a total capacity of 2,836 MW are considering participation.