Vietnam opens energy market to bilateral PPAs

The Vietnamese government issued new rules this week allowing direct power purchase agreements (DPPA) between independent power producers (IPPs) and energy consumers, according to state-owned media. IPPs can now sell power to final clients via the national grid or direct connection lines.

July 5, 2024 Emiliano Bellini

Image: Derek Sutton, Unsplash

The Vietnamese government issued new rules this week allowing DPPA between IPPs and energy consumers, according to state-owned press agency Baochinhphu.

The new provisions were implemented via the Decree No. 80/2024/ND-CP, which is now in force. The Ministry of Industry and Trade (MoIT) will oversee the development of the PPA market.

IPPs will be allowed to sell power to buyers either via the national grid or direct connection lines.

With the first option, the sellers will sign PPAs with local utility EVN, which will in turn sign PPAs with the buyers. Buyers and sellers will then sign contract-for-difference (CfD) deals on a price per kilowatta basis.

With the second option, IPPs and buyers agree directly on the contracted terms and have the possibility to sell excess power to EVN.

Before introducing the new rules, the Vietnamese government backed large-scale solar via a feed-in tariff (FIT) program that expired in 2020.

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Vietnam had 17.07 GW of solar capacity by the end of last year, according to the latest data from the International Renewable Energy Agency (IRENA). About 11 GW of the total was installed in 2020, with only 1 GW added in the preceding three years.

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