Latest Procedures for Participating in Direct Electricity Trading Through the National Grid in Vietnam

Latest Procedures for Participating in Direct Electricity Trading Through the National Grid in Vietnam​ (Image from the Internet)

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

Latest Procedures for Participating in Direct Electricity Trading Through the National Grid in Vietnam

Article 26 of Decree 80/2024/ND-CP stipulates the procedure for participating in direct electricity trading through the national grid as follows:

- Large electricity consumers or retail electricity units in authorized models of zones and clusters and renewable energy generating units as stipulated in Clause 2, Article 2 of Decree 80/2024/ND-CP, who have agreed to participate in the direct electricity trading mechanism through the national grid, shall submit their registration dossiers either directly or via postal services to the electricity and power market operation unit, including:

+ A written request to participate in the direct electricity trading mechanism;

+ A principle agreement document between the renewable energy generating unit and the large electricity consumer or retail electricity unit in authorized models of zones and clusters regarding the purchase and sale of electricity through a forward contract as stipulated in Article 17 of Decree 80/2024/ND-CP, including information on the projected signing of the forward contract between the two parties and the projected termination of the existing power purchase agreement of the renewable energy generating unit to participate in the direct electricity trading mechanism;

+ Status report of the renewable energy generating unit (type of power plant, capacity, current status of power plant, infrastructure for participating in the electricity market, and current electricity price);

+ Information of the large electricity consumer or retail electricity unit in authorized models of zones and clusters (location of the electricity consumption facility, purpose of electricity use, current electricity usage status (if any), infrastructure for participating in the electricity market, and current electricity price (if any));

+ A document on the agreed principle for the allocation of actually generated electric power of the renewable energy generating units to the large electricity consumer or retail electricity unit in authorized models of zones and clusters for each trading cycle (Qm_(i)).

- Large electricity consumers in industrial zones, economic zones, export processing zones, industrial clusters, high-tech parks, concentrated information technology parks, or high-tech agricultural zones or retail electricity units in authorized models of zones and clusters as per Clause 2, Article 2 of Decree 80/2024/ND-CP shall provide the following additional documents:

+ An agreement document with the Electricity Corporation on the responsibility for installing measurement meters of large electricity consumers or retail electricity units in authorized models of zones and clusters that meet technical conditions according to regulations and the projected cost of purchasing electricity as stipulated in Article 18 of Decree 80/2024/ND-CP;

+ In case of termination of the contract with the retail electricity unit in the industrial zone: An agreed document with the retail electricity unit in the industrial zone on the projected termination of the signed electricity purchase agreement and the retail cost within the perimeter of the industrial zone, economic zone, export processing zone, industrial cluster, high-tech park, concentrated information technology park, high-tech agricultural zone (from the total electricity meter of the retail electricity unit in authorized models of zones and clusters to the retail electricity meter for large electricity consumers);

+ In case of continuing the contract with the retail electricity unit in the industrial zone: An authorization document of the large electricity consumer and an agreement on amending the existing power purchase agreement with the large electricity consumer to participate in the direct electricity trading mechanism.

- Within 05 working days from the receipt of the registration dossier for participating in the direct electricity trading mechanism as per Clause 1 and Clause 2, Article 26 of Decree 80/2024/ND-CP, the electricity and power market operation unit shall:

+ Forward the dossier to the Electricity Corporation, the retail electricity unit in the industrial zone managing the large electricity consumer, confirming the dossier of the large electricity consumer or retail electricity unit in authorized models of zones and clusters, and the feasibility of converting the existing power purchase agreements to the direct electricity trading mechanism;

+ Forward the dossier to Vietnam Electricity for confirmation of the feasibility of signing power purchase agreements in the spot electricity market with renewable energy generating units as stipulated in Article 9 of Decree 80/2024/ND-CP;

+ Review the conformity of the dossier submitted by the large electricity consumer or retail electricity unit in authorized models of zones and clusters as stipulated in Point d, Clause 1, Article 26 of Decree 80/2024/ND-CP. In cases where the actually generated electric power of the renewable energy generating units with forward contracts with large electricity consumers or retail electricity units in authorized models of zones and clusters cannot be determined, the electricity and power market operation unit shall guide the large electricity consumers or retail electricity units in authorized models of zones and clusters to reach a unified principle on allocation with the renewable energy generating units.

- Within 05 working days from the receipt of the dossier from the electricity and power market operation unit:

+ The Electricity Corporation, the retail electricity unit in authorized models of zones and clusters shall provide a written confirmation of the readiness and projected time for converting power purchase agreements with large electricity consumers or retail electricity units in authorized models of zones and clusters and send it to the electricity and power market operation unit;

+ Vietnam Electricity shall provide a written confirmation of the readiness and projected time for signing power purchase agreements in the spot electricity market with the renewable energy generating unit and send it to the electricity and power market operation unit.

- Within 05 working days from the receipt of the written response from Vietnam Electricity, the Electricity Corporation, the retail electricity unit in authorized models of zones and clusters, and the unified principle on actually generated electric power allocation of large electricity consumers or retail electricity units in authorized models of zones and clusters as per Point d, Clause 1, Article 26 of Decree 80/2024/ND-CP, the electricity and power market operation unit shall provide a written response to large electricity consumers or retail electricity units in authorized models of zones and clusters on:

+ The projected time for signing spot market power purchase agreements between Vietnam Electricity and renewable energy generating units.

+ The projected time for converting existing power purchase agreements between the Electricity Corporation, retail electricity units in authorized models of zones and clusters, and large electricity consumers.

+ The projected time for applying the direct electricity trading mechanism.

- Vietnam Electricity, the Electricity Corporation, the retail electricity unit in authorized models of zones and clusters, renewable energy generating units, and large electricity consumers or retail electricity units in authorized models of zones and clusters shall actively negotiate and sign contracts as per Article 9, Article 15, and Article 17 of Decree 80/2024/ND-CP.

- Renewable energy generating units, large electricity consumers or retail electricity units in authorized models of zones and clusters, and related units shall invest in and equip the necessary infrastructure to meet the conditions for participating in the direct electricity trading mechanism and send a written confirmation to the electricity and power market operation unit on the completion of the conditions for participating in the direct electricity trading mechanism. The dossier attached to the document includes: a registration dossier for participating in the electricity market of the generating unit, copies of the contracts as per Article 9, Article 15, and Article 17 of Decree 80/2024/ND-CP.

- The electricity and power market operation unit shall check the dossier as per Clause 7, Article 26 of Decree 80/2024/ND-CP and provide written notices to the renewable energy generating units per regulations on electricity market operations issued by the Ministry of Industry and Trade, and concurrently provide written notices to Vietnam Electricity, the Electricity Corporation, the retail electricity unit in authorized models of zones and clusters, and large electricity consumers or retail electricity units in authorized models of zones and clusters, on the official time for operating direct electricity trading between the renewable energy generating units and large electricity consumers or retail electricity units in authorized models of zones and clusters.

Refer to Decree 80/2024/ND-CP effective from July 3, 2024.

To Quoc Trinh

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