STATEMENT: Vietnam Government Approves New Decree that Allows Direct Power Purchase Agreement to Promote Clean Energy Transition
HANOI, VIETNAM (03 July 2024) – The Government of Vietnam recently announced Decree No. 80/2024/NĐ-CP dated 3 July 2024, which allows a direct power purchase agreement (DPPA) between renewable energy generators and large electricity users in the country. This landmark decree represents a major advancement in Vietnam’s renewable energy sector and reinforces the nation’s commitment to shift away from fossil fuels.
The agreement introduces a market-driven approach to renewable energy procurement, fostering an environment conducive to the growth of renewable energy projects across the country. The mechanism will enable direct electricity purchase and sale between renewable energy power generation units and large electricity consumers. This will, in turn, promote a stable and transparent environment for investors, encouraging both domestic and international investment in Vietnam.
Following are reaction quotes from several members of the Asia Clean Energy Coalition (ACEC), who worked closely with the Vietnamese government during the research, consultation, and implementation phases of this initiative:
“The implementation of the DPPA mechanism marks a pivotal moment for Vietnam’s renewable energy sector, especially for the global multinational companies that are part of ACEC. This new mechanism provides these companies with a significant opportunity to contribute to Vietnam’s sustainable growth while meeting their own renewable energy targets. ACEC remains dedicated to mobilizing the expertise and resources of our members to ensure the successful realization of this initiative and to support the government's ongoing efforts in fostering a robust renewable energy market,” said Suji Kang, Program Director of Asia Clean Energy Coalition.
“The introduction of a direct power purchase agreement in Vietnam is a testament to the government’s leadership and steadfast commitment to advancing renewable energy. A financial mechanism like this creates opportunities for companies to buy renewable energy through long-term contracts and could thereby manage price fluctuations and over the long-term to reduce energy costs, all the while meeting their goals to reduce emissions. Tapping into the massive potential for business to take the lead in demonstrating leadership in the energy transition, it has the potential to usher in a wave of renewable energy adaption that will help Vietnam rapidly shift to a clean energy economy,” said Alex Perera, Deputy Director of Global Energy Program, World Resources Institute.
“The approval for the DPPA mechanism is a significant advancement for Vietnam. This mechanism streamlines access to renewable energy for companies, helping them achieve their sustainable goals. With this decision, Vietnam now stands as one of the leaders in the region in the energy transition journey. The mechanism will also make Vietnam become an even more attractive destination for international investors. GWEC, as a founding member of ACEC, is committed to working closely with the government and businesses to support Vietnam in becoming a sustainable, green and net-zero economy,” said Mark Hutchinson, Director and Chair of SEA Task Force, Global Wind Energy Council (GWEC)
“This is a hugely welcome step in Vietnam as the country looks to position itself as a leader in renewables in the region. Simplifying the process for purchasing renewables is a major step in accelerating their growth in the country and helping to realise the true low costs associated with renewable power. We encourage the Vietnamese government to demonstrate further leadership on renewables to take advantage of the economic opportunity of renewable energy,” said Ollie Wilson, Head of RE100, Climate Group.
“As a member of ACEC community, Samsung Electronics is thrilled to see the DPPA mechanism taking off in Viet Nam, one of our most important partner countries. We believe this landmark decree will serve as a momentum to drive climate action in Viet Nam and the region. We look forward to continuously working with the government and our peers at ACEC to develop and implement the DPPA mechanism, which we believe will serve as a foundation for building an affordable, accessible and reliable renewable energy infrastructure in the country,” said Inhee Chung, Vice President, Corporate Sustainability Centre, Samsung Electronics
“The DPPA marks an important step toward a cleaner electrical grid in Vietnam, offering businesses a practical means for procuring renewable energy to power their operations. With this new mechanism in place, Apple's suppliers now have a meaningful opportunity to support Vietnam’s action plan to achieve net zero emissions by 2050 while accelerating progress toward Apple’s ambitious goal to be carbon neutral across our entire value chain by 2030,” said Bessma Aljarbou, Head of Supplier Carbon Solutions, Apple
“Cisco applauds the DPPA decree to increase renewable energy availability in Vietnam. Cisco has set an ambitious goal to reach net zero emissions across our value chain by 2040, and increasing access to renewable energy for our suppliers and customers in this region is essential to reach this goal,” said Mary de Wysocki, Chief Sustainability Officer, Cisco.
About the Asia Clean Energy Coalition
Founded in 2022, the Asia Clean Energy Coalition is a pivotal initiative aimed at propelling the transition to clean energy across Asia. By uniting leading renewable energy buyers, sellers, and financiers, ACEC works to influence policy in key Asian markets, offering strategic advice and coordination to promote sustainable energy solutions. As a hub for expertise and strategic communication, ACEC plays a critical role in shaping energy policies that drive investment, ensure energy security, and foster sustainable economic growth across the region.