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Official Gazette

Wednesday, September 28, 2022

Direct power purchase mechanism proposed

Updated: 11:03’ - 04/06/2022
Industrial customers wishing to purchase power at a voltage of 22 kV or higher might enter into direct power purchase agreements (DPPA) with renewable energy developers.

A nearshore wind farm of Trungnam Group in Duyen Hai district, Tra Vinh province__Photo: VNA

According to a pilot DPPA mechanism recently revealed by the Ministry of Industry and Trade (MOIT), renewable energy developers participating in the pilot mechanism would be those possessing wind or solar power plants with an installed capacity of more than 30 MW which have been connected to the national power system. They include (i) power plants that are ready to be put into operation but do not meet conditions for application of the electricity price mechanism under Decisions 13 of 2020, 37 of 2011 and 39 of 2018 and (ii) power plants under construction that have been included in the electricity master plans and are expected to be put into commercial operation within 270 working days after the pilot mechanism is applied.

Renewable energy developers would also have to satisfy requirements such as not being subject to export limitation in case of grid overload at the time of registration for commercial operation; having power purchase contracts signed with the Electricity of Vietnam which remain valid at the time of registration for participation in the pilot mechanism, and having reached in-principle agreements with one or more than one customer under the DPPA mechanism.

The total capacity of power plants participating in the pilot mechanism would not exceed 1,000 MW.

After the MOIT opens the registration form for participation to the pilot mechanism on the DPPA portal, power developers and customers would have 30 days to prepare and submit their registration dossiers. The assessment of registration dossiers and selection and announcement of, power plants and customers participating in the pilot mechanism would be conducted within 30 days after the registration form is closed.

Within a committed time limit from the date the list of power plants and customers participating the pilot mechanism is announced, power developers and customers would have to complete negotiation and conclusion of relevant contracts, complete the construction of renewable energy plants and put them into commercial operation, and join the electricity market so as to officially perform transactions according to DPPA principles.

One year from the deadline for power developers to put their power plants into commercial operation and join the electricity market, the MOIT would assess commercial, technical, financial and legal aspects of DPPAs and propose competent agencies to officialize the pilot mechanism, if conditions permit.- (VLLF)

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