The Government Office issued Notice No. 232/TB-VPCP concluding the conclusion of Deputy Prime Minister Tran Hong Ha on the development and promulgation of a Decree regulating the direct electricity purchase and sale mechanism between renewable energy power generation units and large electricity users (DPPA mechanism).
In the Announcement, the Deputy Prime Minister affirmed: The policy of developing a Decree on the DPPA mechanism has been mentioned in the Resolutions of the Party, the National Assembly, the National Assembly Standing Committee, and is stipulated in the Electricity Law. At the same time, the Government and the Prime Minister have directed the Ministry of Industry and Trade to urgently develop the Decree. In the past, the Ministry of Industry and Trade has made great efforts in researching and developing new policies and mechanisms on the DPPA mechanism under the direction of the Government and the Prime Minister. However, the implementation is still slow, and the content of the draft Decree still has many issues that need to be clarified, specifically:
Regarding the scope : Point b Clause 1 Article 47 of the Electricity Law stipulates: "Purchasing electricity directly from power generation units through term contracts or buying electricity on the spot on the electricity market". Accordingly, the Law only stipulates "power generation units" in general and does not limit it to renewable energy (RE) power generation units. Regarding this, the Deputy Prime Minister requested the Ministry of Industry and Trade to have appropriate explanations in the context of Vietnam's policy commitment to bring net emissions to zero by 2050. Therefore, this Decree will focus on developing RE instead of developing fossil energy; however, it is necessary to study and expand the scope for biomass power sources and electricity produced from waste.
Regarding the subjects of application : Review to ensure implementation in accordance with the Party's policies and the Resolutions of the National Assembly and the National Assembly Standing Committee. In case it is necessary to limit the subjects of application (power plant scale from 10MW or more), the Ministry of Industry and Trade needs to clarify the subjects participating in direct electricity trading, the bases and arguments; study and clarify the appropriateness when regulating the subjects of customers with an average monthly consumption of 500,000 kWh; at the same time, consider limiting the capacity between manufacturers and commercial services to ensure the rights, responsibilities and obligations of the parties participating in direct electricity trading, ensuring grid safety; have preferential policies and encourage businesses to consume green energy and renewable energy to receive green credits.
Regarding the DPPA policy : This is a policy to encourage, attract investment and develop a competitive retail electricity market. It is required to research and develop an open policy, following the market mechanism; it is necessary to clearly define the forms of direct electricity purchase and sale, and at the same time, to stipulate the responsibilities of the buyer, the seller, and the responsibility of state management for this policy, especially the inspection and supervision work to ensure healthy, safe and effective development, absolutely not leaving any loopholes, and the occurrence of a specific request-grant mechanism:
In the case where the buyer and seller sign a direct contract and connect the power line directly to each other, not through the national power grid system: It is necessary to clarify that the Power Plan VIII does not limit the capacity scale, renewable energy development projects (including rooftop solar power), electricity produced from waste, and biomass power only need to be consistent with the Provincial Planning according to the Law on Planning; it is necessary to stipulate clear and specific mechanisms and policies (on VAT, environment, fire prevention and fighting, technical conditions to ensure safety in electricity production and use, safety in construction), simple procedures to encourage maximum; do not have rigid regulations on the contract but let the parties negotiate according to the market mechanism; In the case where the buyer and seller sign a contract with each other directly but through the national power transmission line system:
+ Clarify the role of the State, EVN and the National Power System Dispatch Center in: (i) Publicly and transparently announcing the load demand of each region, area and area and dispatching capacity, calculating transmission capacity, to announce the capacity of renewable energy sources that can be absorbed in the areas, EVN must provide information on the scale of renewable energy sources signed with Power Purchase Agreements to report to the Ministry of Industry and Trade for adjustment from base electricity types such as coal, gas, hydropower...; (ii) Develop and publicly announce costs (ensuring correctness and completeness) when using EVN's transmission system services (or third parties), using infrastructure, loss fees; At the same time, it must be considered to ensure compliance with the power source development plan and the transmission-distribution grid development plan, ensuring that transmission to the power system is safe and does not affect the security of electricity supply;
+ Customers accept high electricity prices to obtain carbon credits and carbon markets, so there must be specific regulations to publicize information about businesses using clean energy to have preferential policies, encourage businesses to consume green energy, renewable energy to receive green credits... It is necessary to clearly define the responsibilities of the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment, and EVN regarding certification procedures and publicizing information about businesses consuming green and clean electricity to be granted green credits;
+ Clearly define major customers, in which industrial park investors need to be considered as major customers and need to expand the customer base to service providers, not just limited to manufacturers;
+ Some concepts of solar power, wind power, biomass power or renewable power using storage batteries need to be clearly defined, in which if electricity from renewable energy uses storage batteries, it is considered base electricity and there needs to be an electricity price policy for the type of renewable energy combined with storage batteries generated during peak hours of the power system, when the state lacks electricity, this type of electricity is calculated additionally to be prioritized early and further research is needed on the price of 2-component electricity.
+ The provisions of this Decree need to supplement the Decree regulating rooftop solar power to encourage the development of this type in accordance with Power Plan VIII.
The Deputy Prime Minister requested the Ministry of Industry and Trade to study and absorb opinions at the meeting to develop a policy mechanism on DPPA in accordance with the provisions of the Law on Promulgation of Legal Documents and the Party's policies, the Electricity Law, the Price Law, the Resolutions of the National Assembly and the National Assembly Standing Committee, and relevant legal provisions, and complete the draft Decree to submit to the Government in May 2024.
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