DPPA mechanism to promote a competitive energy market in Vietnam
The direct power purchase agreement (DPPA) mechanism is a breakthrough step in the roadmap to develop a competitive power market. It also gives businesses a chance to select electricity suppliers to obtain “green certificates”.
Minister of Industry and Trade Nguyen Hong Dien chairs the teleconference on the implementation of works related to the protocol on direct power purchase. (Photo: VietnamPlus)
Hanoi (VNA) - Minister of Industry and Trade Nguyen Hong Dien on July 5 chaired a conference on the implementation of🎃 the Government’s decree that stipulates the direct power purchase agreement (DPPA) mechanism between renewable energy producers and large power consumers.
On July 3, 2024, the Prime Minister issued Decree No. 80/2024/ND-CP, which stipulates the DPPA mechanism between renewable energy generators and large power consumers.
The leader of the Ministry of Industry and Trade (MoIT) described this as a breakthrough step in the roadmap to develop a competitive power market in Vietnam that also gives businesses a chance to select electricity suppliers to obtain “green certificates” amid a changing world.
Pham Quang Huy, Deputy Director of the MoIT’s Electricity Regulatory Authority of Vietnam, talks about the DPPA mechanism. (Photo: VietnamPlus)
Pham Quang Huy, Deputy Director of the MoIT’s Electricity Regulatory Authority of Vietnam, emphasised that the issuance of the DPPA mechanism reflects the strong determination by the Government, the MoIT, and relevant sectors, and enterprises in building and perfecting advanced, equal, and transparent industry mechanisms/policies. These new policies will create momentum for attracting private funding for renewable energy investment and use, and also for developing a competitive power market in Vietnam.
The DPPA mechanism will, for the first time, enable renewable energy generators to directly sell electricity to consumers, aside from power corporations. It will also ensure activities of electricity generators or power project investors do not conflict with the strategic targets currently applied by the national power development plan.
Compliance with legal regulations on planning and investment is the prerequisite for renewable energy generators in both power trading policies to engage in this mechanism.
Vo Quang Lam, Deputy General Director of the Vietnam Electricity (EVN), affirmed that the DPPA application is a highly important step to promote a competitive power market in Vietnam.
EVN has reviewed its internal processes and will finish the work this July to ensure those processes align with the decree and relevant legal rules so that its member corporations can apply the mechanism immediately, he noted.
To efficiently implement the DPPA mechanism, Minister Dien asked the People’s Committees of provinces and centrally-run cities to properly carry out the tasks specified in the decree. In particular, they need to boost examining and supervising the implementation of DPPAs, settling denunciations, and dealing with wrongdoings during the mechanism application.
Offshore wind power helps guarantee energy security. (Photo: VietnamPlus)
He asked EVN and its subsidiaries to quickly calculate the expenses of using power system services under the DPPA mechanism. They were also tasked with building invoice calculation, payment, and management processes, giving guidance to the units participating in the mechanism via the national grid. The units will also monitor technical requirements to guarantee stable, safe, and uninterrupted operations of the power system.
Dien also ordered MoIT agencies to boost the dissemination of the decree’s role, importance, and main content, make monthly reports on implementation results, and submit timely advice to MoIT leaders and competent agencies to promptly address difficulties and obstacles.
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