The Mechanism for Direct Electricity Sales According to Decree 80/2024/ND-CP

Direct Power Sale Mechanism under Decree 80/2024/ND-CP?

On July 3, 2024, the Government of Vietnam issued Decree 80/2024/ND-CP regulating the mechanism of direct power purchase and sale between renewable energy power generation units and large electricity consumers.

Decree 80/2024/ND-CP regulates the mechanism of direct power purchase and sale between renewable energy power generation units and large electricity consumers via either Dedicated Connection Lines or the National Grid.

The subjects of direct power sale through Dedicated Connection Lines under Decree 80/2024/ND-CP are as follows:

- Renewable energy power generation units;- Large electricity consumers.

Decree 80/2024/ND-CP takes effect from July 3, 2024.

Direct Power Sale Mechanism under Decree 80/2024/ND-CP? (Image from the Internet)

How are the activities of power sale and transfer carried out through two forms?

Based on Article 4 of Decree 80/2024/ND-CP, the direct power purchase and sale mechanisms are regulated as follows:

• Direct power purchase and sale is the activity of power sale and transfer carried out through two forms:

Form 1: Direct power sale through Dedicated Connection Lines is the activity of signing power purchase and sale contracts and transferring power via Dedicated Connection Lines between renewable energy power generation units and large electricity consumers as regulated in Chapter 2 of Decree 80/2024/ND-CP.

Form 2: Direct power sale through the National Grid is the activity of power sale through a forward contract between renewable energy power generation units and large electricity consumers (or retail power units in authorized zones) and the implementation of power sale activities as regulated in Chapter 3 of Decree 80/2024/ND-CP, including:

- Renewable energy power generation units sell all produced power into the spot market of the competitive wholesale power market;- Large electricity consumers or retail power units in authorized zones sign power purchase contracts with Vietnam Electricity (or authorized/delegated units) to buy all the power needed to meet demand;- Renewable energy power generation units and large electricity consumers or retail power units in authorized zones engage in power purchase and sale through forward contracts.

What are the principles of direct power sale through Dedicated Connection Lines?

Based on Article 6 of Decree 80/2024/ND-CP, the principles of direct power sale through Dedicated Connection Lines of the national grid are regulated as follows:

- Renewable energy power generation units and large electricity consumers as defined in Article 2 of Decree 80/2024/ND-CP conduct direct power sale through Dedicated Connection Lines according to the following principles:

+ The power purchase and sale contract between renewable energy power generation units and large electricity consumers for direct power sale through Dedicated Connection Lines is mutually agreed upon and compliant with the provisions in Article 22 of the Electricity Law 2004 and relevant legal documents, including the following main contents:

++ Contractual entities;++ Purpose of use;++ Service standards and quality;++ Rights and obligations of the parties;++ Electricity price, payment method, and schedule;++ Conditions for contract termination;++ Liability for contract violations;++ Contract duration;++ Responsibilities for investment, construction, and operation of Dedicated Connection Lines;++ Other contents mutually agreed.

+ Electricity sale prices are negotiated by the parties except for the case stipulated in Clause 4 of Article 6 of Decree 80/2024/ND-CP.

- Renewable energy power generation units negotiate, agree, and sign power purchase contracts regarding capacity, output, and price of surplus power with Vietnam Electricity (or an authorized unit) as regulated.

- Besides the direct power sale through Dedicated Connection Lines stipulated in Clauses 1 and 2 of Article 6 of Decree 80/2024/ND-CP, large electricity consumers are allowed to purchase power from Vietnam Electricity (or retail power units not part of Vietnam Electricity) as regulated.

- In cases where power units perform both generation and retail functions within authorized zones, and combine the purchase of electricity from the national grid with other on-site sources to retail electricity to consumers within the authorized zones, the retail electricity price to consumers is implemented following the Pricing Regulations for electricity issued by the Ministry of Industry and Trade.

How is the communication, dissemination, and education on the laws of electricity regulated?

Article 6 of the Electricity Law 2004 regulates the communication, dissemination, and education on the laws of electricity as follows:

- Ministries, ministerial-level agencies, agencies under the Government of Vietnam, people's committees at all levels, and power entities within their scope of responsibility cooperate with media agencies and schools to educate, disseminate and guide people on the safe, economical, efficient use of electricity, and strict compliance with the legal provisions on electricity.

- The Vietnam Fatherland Front and its members, within their scope of responsibility, cooperate with state management agencies on electricity activities and power usage to educate, and mobilize people to use electricity safely, economically, efficiently, and to comply strictly with the legal provisions on electricity.