DPPA decree signed: a major step forward for green growth in Vietnam

Vietnam is taking significant strides toward a greener future with the signing of the Direct Power Purchase Agreement (DPPA) decree on Wednesday, 3 July. This landmark policy allows large electricity consumers to purchase renewable energy directly from a variety of producers, including solar, wind, small hydro, biomass, geothermal, and even ocean wave systems. This approach opens up new avenues for clean energy growth, fostering a more diversified and dynamic energy market.

The DPPA decree offers two key methods for direct power sales:

• Private Power Lines: Large-scale renewable energy producers can establish independent power lines to directly supply electricity to consumers, separate from the national grid (operated by Vietnam Electricity or EVN).
• National Grid: Renewable energy producers can also use the existing national grid to sell electricity to consumers. This option is more accessible to smaller-scale projects and allows for wider participation in the DPPA program.

The DPPA is expected to significantly accelerate the adoption of renewable energy sources while attracting substantial investment to the sector. By promoting direct transactions and increased competition, the DPPA will not only benefit the environment but also enhance the efficiency and cost-effectiveness of Vietnam’s energy market.

To mark this milestone, the Ministry of Industry and Trade (MOIT) hosted a hybrid DPPA Implementation Conference in Hanoi. Minister Nguyen Hong Dien inaugurated the event, highlighting the government’s commitment to sustainable energy development. Deputy Ministers Nguyen Hoang Long and Truong Thanh Hoai also participated. The conference featured a comprehensive presentation on key aspects of the DPPA by the Electricity Regulatory Authority of Vietnam (ERAV), followed by insightful discussions with a wide range of stakeholders.

EuroCham Vietnam was well-represented by Vice-Chair Minh Nguyen and Hanoi Office cum External Relations Manager, Van Nguyen. Board Member Stuart Livesey also delivered a speech as EuroCham’s representative to the Vietnam Business Forum.

The signing of the DPPA framework marks a significant milestone for sustainable energy in Vietnam, fulfilling a long-held goal of advocates who see its potential to enhance competition and drive green growth in the energy sector. EuroCham Vietnam, through its Green Growth Sector Committee, has been a key advocate for this initiative and welcomes this progress. We are committed to supporting the successful implementation of the DPPA framework, furthering Vietnam’s commitment to a greener and more sustainable future.