The "boost" from direct electricity trading.

VTV.vn - The recording of the first milestone of DPPA through the national power grid promotes the integration of renewable energy sources and enhances transparency in electricity transactions.

According to an announcement by the National Power System and Electricity Market Operator (NSMO), on June 1st, Samsung Thai Nguyen (SEVT) and TTC Duc Hue 2 Solar Power Plant completed the technical and legal procedures to officially operate under the Direct Power Purchase Agreement (DPPA). In this agreement, SEVT acts as the buyer, while TTC Duc Hue 2 sells electricity through the transmission system of Vietnam Electricity Group (EVN).

The first DPPA contract

The electricity supplied to the South Korean group's production complex is generated from the TTC Duc Hue 2 Solar Power Plant, with a designed capacity of 49 MWp/41.4 MWac, located in Tay Ninh province. Under this DPPA contract, the seller will guarantee approximately 70 GWh of solar power per year for SEVT, equivalent to the electricity needs of about 17,000 households. The project is also expected to help reduce approximately 46,000 tons of CO2 emissions per year.

This is the first power generation unit in Vietnam to officially participate in the mechanism of direct electricity trading through the national grid and conduct transactions through the electricity market. Along with that, SEVT became the first corporate customer to purchase renewable electricity under this mechanism.

According to NSMO, this is not only the first commercial transaction under the new mechanism but also a crucial practical step in the operation of a competitive electricity market. Electricity from renewable energy sources is fed into the national power grid, then measured, verified, mobilized, traded, and paid for through the electricity market according to current regulations. "Recording the first milestone of the DPPA mechanism through the national grid contributes to promoting the integration of renewable energy sources, enhancing transparency in electricity transactions, supporting large electricity consumers in accessing green energy sources, and aligning with Vietnam's goal of sustainable energy transition," NSMO emphasized.

The national power grid operator also stated that in the coming period, it will continue to coordinate with power plants, electricity trading units, large electricity consumers, and relevant parties to ensure that the DPPA mechanism is operated safely, transparently, efficiently, and in accordance with regulations.

Samsung Electronics Vietnam Thai Nguyen Co., Ltd. (SEVT) will purchase electricity directly from Duc Hue 2 Power Plant via the national grid to supply its production complex in Thai Nguyen.

Removing transmission obstacles

According to Mr. Bui Van Thinh, Chairman of the Binh Thuan ( Lam Dong ) Wind and Solar Power Association, this is the first project in Vietnam to implement the DPPA mechanism using EVN's transmission lines, a contract model involving three parties: the buyer, the seller, and the transmission provider. "Direct electricity trading via dedicated transmission lines has been implemented in several projects. However, this is the first project using EVN's transmission lines. Therefore, I expect that when implemented, the project will contribute to resolving obstacles related to transmission fees and electricity supply mechanisms..." - Mr. Thinh stated.

According to Mr. Thinh, EVN currently owns a large-scale electricity transmission system nationwide. If this existing infrastructure is effectively utilized, the scale of direct electricity transactions between parties will increase significantly, while also contributing to resolving issues related to transmission costs.

In particular, with many export businesses having to meet increasingly stringent green standards from international partners, the demand for clean electricity is constantly increasing. Meanwhile, the supply from renewable energy projects is currently quite abundant. Therefore, putting the DPPA mechanism into practical operation is expected to create further impetus for the development of the green electricity market, while supporting the sustainable energy transition process in Vietnam.

Economist Associate Professor Ngo Tri Long argues that once the target of double-digit economic growth has been established, energy policy also needs to operate according to new requirements. Beyond ensuring sufficient electricity supply, the market needs more flexible, competitive power sources that align with global energy transition trends.

According to Mr. Long, perfecting the DPPA mechanism essentially reduces policy uncertainties, thereby lowering opportunity costs and creating incentives for investment. In investment activities, the important factor is not necessarily high incentives, but a stable, transparent, and predictable institutional environment. "Businesses are only willing to invest long-term capital when they see a mechanism that is clear enough to calculate, consistent enough to feel secure, and feasible enough to implement," Mr. Long stated.

From a management perspective, a representative from the Electricity Department (Ministry of Industry and Trade) stated that the agency is continuing to refine the electricity pricing mechanism in DPPA transactions, aiming to strengthen market factors. Participating parties are encouraged to proactively negotiate and agree within the legal framework and in accordance with the specific characteristics of each type of transaction.

According to a representative from the Electricity Department, the State will not intervene in specific contracts but will still play a role in building the legal framework, supervising and regulating the market to ensure healthy and transparent competition and limit unusual fluctuations that could pose risks to participating parties. In addition, the Ministry of Industry and Trade is also studying mechanisms to control cost fluctuations in long-term DPPA contracts. This is a matter of great concern to many businesses because the ability to forecast energy costs is a crucial factor in financial planning and risk management.

According to the regulatory body, the design of cost volatility control tools, including clearing mechanisms, will be considered on the basis of harmonizing the interests of all parties and in accordance with the operating principles of the electricity market. The ultimate goal is not only to help businesses access green electricity but also to be more proactive in addressing long-term costs, thereby enhancing competitiveness and supporting the sustainable energy transition process.

DPPA is a mechanism that allows power generation units from renewable energy sources to sell electricity directly to large electricity consumers. This mechanism is stipulated by the Government in Decree 57/2025, effective from March 2025, aiming to expand green electricity options for businesses, promote a competitive electricity market, and create a foundation for the future development of the retail electricity market.

Source: https://money.vtv.vn/cu-hich-mua-ban-dien-truc-tiep-109260603091926423.htm