Advancing Vietnam’s Renewable Energy Goals: Insights from ACEC’s Participation in the DPPA Draft Decree Consultation Sessions with the Government
The Asia Clean Energy Coalition is at the forefront of supporting transformative energy policies in Asia. Recently, our Program Director had the honor of participating in two pivotal consultation sessions in Vietnam, focusing on the evolving policy landscape required to meet both government and corporate requirements for implementing the latest draft of the Direct Power Purchase Agreement (DPPA) mechanisms.
The first consultation was chaired by Minister Nguyen Hong Dien of the Ministry of Industry and Trade (MoIT) on April 24, 2024. This was followed by a significant session on May 14, 2024, at the Office of the Government in Hanoi, chaired by Deputy Prime Minister Tran Hong Ha. This meeting brought together stakeholders including the Vice Minister of MoIT, the Chairman of Vietnam Electricity (EVN), and foreign business community experts to discuss the feasibility of the draft decree and the pivotal policy adjustments needed.
Deputy Prime Minister Ha outlined a crucial timeline, with the DPPA Decree set to take effect by July 1, 2024. He emphasized the necessity for further detailed discussions among key authorities including MoIT and EVN to refine elements such as distribution topics, specifics of wheeling fee services, and the regulatory framework essential for issuing carbon credits.
The consultation sessions aimed to ensure that the procedures under the DPPA decree remain streamlined and uncomplicated. The decree differentiates between two types of DPPAs: Private wire DPPA for direct trading via private power lines, and Virtual/Synthetic DPPA for trading via the national grid. The Deputy Prime Minister stressed the importance of simple procedures and clear regulations regarding wheeling fees, advocating for transparency and efficiency to facilitate easier implementation and to avoid overburdening EVN.
The discussions highlighted during the session include the necessity for a direct transaction model between end-users and power producers for physical DPPAs, thereby reducing the operational burden on EVN and focusing on energy efficiency without overbuilding transmission lines. There were also some concerns raised about the potential cost disparities in renewable energy between the north and the south of Vietnam that contracts may incur different costing scenarios and the need to prevent profiteering from double-counting green credits, especially in virtual/synthetic DPPAs.
From ACEC’s perspective, our participation allowed us to advocate strongly for the swift implementation of the DPPA. We emphasized the coalition’s readiness to assist in any capacity to ensure the successful enactment and operation of the decree. We also proposed expanding the customer scope for DPPAs through private lines and addressed the financial risks associated with renewable energy projects, particularly in terms of suspension, termination, and restoration of participation in the DPPA mechanism.
To further support the implementation of the DPPA and related frameworks, ACEC is committed to organizing follow-up sessions to provide additional insights and support.
As Vietnam moves towards its ambitious renewable energy targets, ACEC remains a dedicated partner in these efforts, offering expertise and advocacy to ensure that policies not only meet current needs but also pave the way for a sustainable energy future.
