Vietnam fuels renewable energy shift

August 08, 2023 | 13:45
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Vietnam's Ministry of Industry and Trade has put forth innovative measures for direct electricity purchases, bypassing conventional channels and potentially accelerating the country's transition to renewable energy sources.
Vietnam fuels renewable energy shift

In a strategic stride, Ministry of Industry and Trade (MoIT) has introduced a proposal to establish direct electricity trading pathways, sidestepping the conventional route involving Vietnam Electricity Group (EVN), the nation's key power entity.

The novel framework comprises two distinct avenues. Customers can opt to acquire electricity through private lines invested in by private enterprises, or they can engage directly with the national grid system, facilitating a direct connection between power generators and consumers.

The MoIT's visionary initiative has been laid out for Prime Minister Pham Minh Chinh, outlining a progressive blueprint for the creation of streamlined electricity trading mechanisms between renewable energy producers and major power consumers. One scenario even explores the potential of private lines operating independently of EVN, as reported by Vietnamnet.

In its comprehensive report, the MoIT sketches out two possibilities for direct electricity transactions, focusing on renewable energy generators and large industrial consumers.

The initial proposal envisions customers engaging in electricity transactions via privately funded power lines. This arrangement offers greater flexibility, unshackling power generators and sizeable consumers from the limitations concerning capacity, output, voltage connection, and usage intent.

Under this framework, power generation entities take up the mantle of investing in and executing power projects in line with the nation's strategic electricity development plan. This includes adherence to regulations governing the acquisition of electricity operation licences.

A key tenet of this approach mandates that both power generators and customers comply with electricity purchase and sale regulations, inclusive of pricing parameters. For larger power consumers, the retail electricity price conforms to the guidelines stipulated in Decision 1062, dated May 4.

The second scenario introduces an alternative route wherein customers can partake in electricity trading through the national grid system. However, this avenue retains an intermediary layer in the form of EVN, maintaining a structured transactional process.

Under this mechanism, specific conditions come into play for both buyers and sellers. Power generation units overseeing wind or solar power plants must be seamlessly integrated into the national power grid and boast an installed capacity surpassing 10MW.

Large-scale power consumers, encompassing both entities and individuals procuring electricity for industrial use at 22 kilovolts and above, form the focal point of this approach.

Pending the enforcement of the upcoming Law on Price and its corresponding fee guidelines, the onus lies with the electricity retail unit to ensure the seamless distribution and supply of electricity. This falls under the purview of Decision 24 by the prime minister, which outlines the mechanism for adjusting average retail electricity prices, and Decision 28, which structures retail electricity tariffs.

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By Trung Duong

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