Principles of direct electricity purchase and sale without going through EVN from July 03, 2024 in Vietnam

Principles of direct electricity purchase and sale without going through EVN in Vietnam (Image from Internet)

Principles of Direct Electricity Purchase and Sale Without Going Through EVN from July 3, 2024 in Vietnam

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

Article 6 of Decree 80/2024/ND-CP stipulates the principles for direct electricity purchase and sales through a dedicated connection line (i.e., not through EVN) as follows:

- Renewable energy generation units and large electricity consumers shall conduct direct electricity sales through dedicated connection lines based on the following principles:

+ The electricity purchase and sale contract between the renewable energy generation unit and the large electricity consumer in the case of direct electricity sales through a dedicated connection line shall be negotiated by both parties in accordance with the provisions of Article 22 of the Electricity Law and relevant legal documents, including the following main contents: Contract subjects; use purpose; service standards and quality; rights and obligations of the parties; electricity price, payment methods and deadlines; contract termination conditions; liability for contract breaches; contract term; responsibility for investment, construction, management, and operation of the dedicated connection line; other contents as agreed by the two parties;

+ The electricity sale price shall be negotiated by both parties, except as provided in Clause 4, Article 6 of Decree 80/2024/ND-CP.

- The renewable energy generation unit shall negotiate, agree upon, and sign electricity purchase and sale contracts regarding capacity, output, and prices for excess electricity output with Vietnam Electricity (or an authorized unit) as stipulated.

- In addition to direct electricity sales through dedicated connection lines mentioned above, large electricity consumers are allowed to buy and sell electricity with the Electricity Corporation (or retail electricity units other than the Electricity Corporation) as per regulations.

- In cases where the electricity unit performs both electricity generation and retail functions in zones or clusters, purchasing electricity from the national power grid concurrently with other local sources for retail sale to electricity users in these zones or clusters, the retail electricity prices for customers will be applied following the Electricity Price Regulations issued by the Ministry of Industry and Trade.

Responsibilities of Renewable Energy Generation Units and Large Electricity Consumers in Vietnam

Articles 7 and 8 of Decree 80/2024/ND-CP stipulate the responsibilities of renewable energy generation units and large electricity consumers in direct electricity sales through dedicated connection lines as follows:

(1) Renewable energy generation units shall comply with the regulations of Article 39 of the Electricity Law and the following provisions:

- They must obtain an electricity operation license in the field of electricity generation, except in cases exempted from obtaining an electricity operation license as per regulations. If not purchasing electricity from the national power grid and having a grid system for retail electricity activities, renewable energy generation units must apply for a retail electricity operation license concurrently with the electricity generation license as per regulations.

- During electricity operation activities, renewable energy generation units are required to comply with the Transmission Power System Regulations and Distribution Power System Regulations issued by the Ministry of Industry and Trade.

- Renewable energy generation units must adhere to the safety regulations in electricity generation as stipulated in Article 54 of the Electricity Law (amended and supplemented in 2012) and guiding documents. Renewable energy generation units investing in electricity transmission or distribution grids to connect directly with customers must comply with safety regulations in electricity transmission and distribution as stipulated in Article 55 of the Electricity Law (amended and supplemented in 2012) and guiding documents.

- Renewable energy generation units must comply with legal regulations regarding investment, construction, electrical safety, land, fire prevention, explosion prevention, environmental protection, and other relevant laws.

(2) Large electricity consumers shall comply with the regulations of Article 47 of the Electricity Law and the following provisions:

- Implement safety regulations in electricity use as stipulated in Article 57 of the Electricity Law (amended and supplemented in 2012) and relevant guiding documents.

- Invest in electrical infrastructure (applicable to large electricity consumers with power stations) in accordance with the national technical standards for electrical safety; comply with regulations on ensuring the safety of high-voltage electrical safety corridors.

- Have a qualified team for grid management and operation (applicable to large electricity consumers with power stations) meeting electrical safety regulations: trained in electrical specialization; trained, tested, and issued electrical safety cards as per regulations.

Tran Trong Tin

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