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Vietnam mulls expansion of direct power purchase agreement mechanism

The Saigon Times

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HCMC – The Ministry of Industry and Trade is seeking to expand the list of participants in the direct power purchase agreement mechanism (DPPA) beyond just manufacturing customers, as initially proposed.

At a meeting on April 10, Trinh Quoc Vu, deputy head of the Energy Efficiency and Sustainable Development Department under the ministry, emphasized the need to expand a draft decree of the Government to include other forms of energy, beyond just wind and solar power plants.

“The draft restricts direct electricity buyers to manufacturing customers. This needs to be revised to encompass non-manufacturing customers who are also interested in participating in this mechanism,” he said.

Minister Nguyen Hong Dien echoed these sentiments, suggesting the possibility of including various entities in the DPPA mechanism, not just producers, if there is demand.

In terms of capacity, Dien proposed considering an unlimited approach while ensuring ease of transmission.

“Though capacity for electricity generation might be limitless, the type of energy produced matters. It is important to prioritize clean and renewable sources for a sustainable future,” Dien said, underscoring the necessity of establishing pricing mechanisms, particularly for transactions occurring within the national power grid system.

Dien urged the drafting committee to expedite the completion of the draft decree by April 15 for public feedback on the Government and Ministry of Industry and Trade’s electronic portals. The draft is expected to be submitted to the Government for review by the end of April or early May.

The ministry has been developing the direct power purchase mechanism since 2019, drawing on domestic and international consultations. The prime minister has already approved the drafting of the decree, assigning the ministry to lead its implementation.

Currently, the draft decree on the DPPA mechanism specifies that buyers must be industrial production organizations or individuals. The suppliers are wind and solar plants with grid-connected capacities exceeding 30 MW. Household consumers are not yet eligible for direct power purchase.

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