MoIT seeks to broaden participation in power purchasing agreement

Originally, the proposal primarily catered to industrial electricity consumers. However, during a recent meeting held on April 10, it became evident that there is a growing interest from a broader spectrum of customers to participate in this initiative.

Under the current draft decree, direct electricity transactions are limited to organisations and individuals involved in industrial production, with renewable energy plants (wind and solar) that are grid-connected and have a capacity exceeding 30MW. Notably, household consumers are currently excluded from direct purchasing.

Trinh Quoc Vu, deputy director of the Department of Energy Efficiency and Sustainable Development at the MoIT, highlighted the increasing interest in the DPPA mechanism beyond its initial scope.

"The interest in the DPPA extends far beyond our initial estimates, indicating a strong market desire for broader access and diversified energy sources," Vu remarked, advocating for the inclusion of a wider array of renewable energy sources, beyond the traditional wind and solar, to meet this burgeoning demand.

Responding to these insights, Minister of Industry and Trade Nguyen Hong Dien voiced his support for expanding the scope of eligible buyers within the DPPA framework.

However, he was adamant about maintaining a strategic approach in the selection of energy types.

"While we're open to expanding our buyer base, it's crucial that we remain selective about the types of energy we include, ensuring that only clean and renewable sources like wind, solar, biomass, and hydropower are considered," Minister Dien emphasised.

This careful selection is aimed at bolstering the development of sustainable energy sources within the country.

Minister Dien also touched on the subject of capacity limits for participants, suggesting a more flexible approach that prioritises the transmission system's efficiency and the promotion of renewable energy.

"We envisage no capacity limits, shifting our focus instead to ensuring that the electricity involved is of a clean and renewable nature. This approach aims to serve the best interests of all parties," he declared.

The DPPA mechanism has captured the attention of international investors, drawn to its potential to significantly enhance the competitive edge of Vietnam's energy sector. Despite unveiling a pilot draft for the DPPA with a proposed initial capacity of 1,000MW two years ago — a proposal that garnered interest from leading global conglomerates like Samsung — the official launch of the mechanism is pending.

Elaborating on the progress made, Minister Dien revealed the ministry's commitment since 2019 towards developing the DPPA, leveraging expertise from both domestic and international consultants.

"With approval from the government and the prime minister, we have been tasked with the crucial responsibility of formulating the decree for the DPPA," he said.

Contributing to the draft, Dau Anh Tuan, deputy secretary-general of the Vietnam Chamber of Commerce and Industry (VCCI), emphasised the need for the decree to clearly define the procedures, rights, and responsibilities of all parties involved.

Additionally, Tran Viet Hoa, director of the Electricity Regulatory Authority of Vietnam, mentioned that the DPPA cannot be separated from regulations on investment, planning, and the power development mechanism, including electricity pricing and transmission in Vietnam.

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