Decree 80/2024/ND-CP on Regulations Regarding the Mechanism for Direct Electricity Sales

Has there been Decree 80 regulating the mechanism for direct electricity sales?

On July 03, 2024, the Government of Vietnam issued Decree 80/2024/ND-CP regulating the mechanism for direct electricity sales between renewable energy power generation units and large electricity consumers.

Decree 80/2024/ND-CP provides regulations on the mechanism for direct electricity sales between renewable energy power generation units and large electricity consumers via Dedicated Connection Lines and the National Grid.

The direct electricity sales subjects via 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 03, 2024.

Has Decree 80/2024/ND-CP regulating the direct electricity sales mechanism been issued? (Image from the Internet)

How are electricity trading and delivery activities conducted through 02 forms?

Based on Article 4 of Decree 80/2024/ND-CP, the direct electricity sales mechanisms are as follows:

* Direct electricity sales involve electricity trading and delivery conducted through the 02 forms as follows:

Form 1: Direct electricity sales via Dedicated Connection Lines involve signing electricity sale and delivery contracts via Dedicated Connection Lines between renewable energy power generation units and large electricity consumers as specified in Chapter 2 of Decree 80/2024/ND-CP.

Form 2: Direct electricity sales via the National Grid involve electricity trading through Forward Contracts between renewable energy power generation units and large electricity consumers (or retail electricity units in authorized model zones) with the electricity trading conducted according to the provisions of Chapter 3 of Decree 80/2024/ND-CP, including:

- Renewable energy power generation units selling all produced electricity to the immediate electricity market of the competitive wholesale electricity market;- Large electricity consumers or retail electricity units in authorized model zones signing electricity sale contracts with the Electricity Corporation (or authorized/delegated units) to purchase all the electricity needed;- Renewable energy power generation units and large electricity consumers or retail electricity units in authorized model zones trading electricity through Forward Contracts.

What are the principles for direct electricity sales via Dedicated Connection Lines?

Based on Article 6 of Decree 80/2024/ND-CP, the principles for direct electricity sales via Dedicated Connection Lines in the national electricity system are as follows:

- Renewable energy power generation units and large electricity consumers specified in Article 2 of Decree 80/2024/ND-CP engage in direct electricity sales via Dedicated Connection Lines based on the following principles:

+ The electricity sale contract between renewable energy power generation units and large electricity consumers for direct sales via Dedicated Connection Lines is agreed upon by both parties in accordance with Article 22 of the Electricity Law 2004 and related legal documents, including the main contents as follows:

++ Contract parties;++ Purpose of use;++ Service standards and quality;++ Rights and obligations of the parties;++ Electricity price, payment method, and term;++ Conditions for contract termination;++ Liability for contract breaches;++ Contract duration;++ Responsibility for investment, construction, management, and operation of Dedicated Connection Lines;++ Other agreed contents;

+ Electricity sale price agreed by both parties, except as stipulated in Clause 4, Article 6 of Decree 80/2024/ND-CP.

- Renewable energy power generation units negotiate, agree and sign electricity sale contracts concerning capacity, quantity, and surplus electricity with Vietnam Electricity Corporation (or authorized units) as per regulations.

- Besides direct electricity sales activities via Dedicated Connection Lines as stipulated in Clauses 1 and 2, Article 6 of Decree 80/2024/ND-CP, large electricity consumers can trade electricity with the Electricity Corporation (or non-Corporation retail electricity units) according to the regulations.

- In case the electricity unit performs both power generation and retail electricity functions in combined model zones and additionally purchases electricity from the national electricity system, alongside other local sources to retail electricity to consumers in these models, the retail electricity price for consumers is implemented according to the Electricity Price Execution Regulations issued by the Ministry of Industry and Trade.

How are the activities of legal dissemination, popularization, and education about electricity prescribed?

Article 6 of the Electricity Law 2004 prescribes legal dissemination, popularization, and education about electricity.

- Ministries, ministerial-level agencies, Government bodies, and local People's Committees within their responsibilities cooperate with mass media agencies and schools to organize dissemination, popularization, and guidance for the public on safe, economical, and efficient electricity usage and strict compliance with electricity laws.

- The Vietnam Fatherland Front and its member organizations within their responsibilities cooperate with state management agencies on electricity activities and use to disseminate, mobilize public compliance with safe, economical, and efficient electricity usage and adherence to electricity laws.