Research on forming regulations for direct power purchase agreements (DPPA) in Vietnam

Research on forming regulations for direct power purchase agreements (DPPA) in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

On March 1, 2024, the Prime Minister issued Decision 215/QD-TTg approving Vietnam's National Energy Development Strategy until 2030, with a vision to 2045.

Research on forming regulations for direct power purchase agreements (DPPA) in Vietnam

Specifically, the contents of implementing mechanisms and policies in the Vietnam National Energy Development Strategy by 2030, with a vision to 2045, include:

- Developing an integrated energy market, connecting the electricity, coal, oil and gas, and renewable energy sectors to regional and global markets. Eliminating all barriers to ensure transparent energy prices determined by the market; the state regulates reasonably through market tools (taxes, fees, funds, etc.) and appropriate social security policies. Improving mechanisms, policies, and market-oriented tools to promote energy efficiency and conservation.

- Reviewing, adjusting, and improving policies on land, compensation for land clearance, water use, etc. Innovating financial policies to encourage and attract investment capital from non-state sources; encouraging energy investment projects under the public-private partnership (PPP) model.

Implementing flexible and effective credit policies, creating favorable conditions for energy companies to access capital, especially those with green energy projects. Improving production and using tax incentive policies for clean, renewable energy.

- Establishing a legal framework to establish and operate sustainable energy development funds, promoting the use of energy efficiency and conservation in a socialized manner, ensuring financial independence, avoiding duplication with revenue and state budget expenditure, and limiting increased operating costs for businesses and production facilities. Improving mechanisms and implementing policies on renewable energy ratios in investment structure and energy supply.

- Amending and improving laws and regulations in the petroleum, electricity, energy efficiency, and conservation sectors, as well as related legal documents in the energy sector that are in line with international practices and the country's development context in the context of extensive international integration, serves as a basis for more effective market mechanisms.

Researching and implementing legalizing the management of electricity prices and certain incentives for investment encouraged in the energy sector. Improving the legal framework for controlling and coordinating electricity supply.

Researching, developing, and supplementing renewable energy content in the Electricity Law (amended) to establish a solid, transparent legal basis, facilitating the sustainable development of new and renewable energy.

- Improving the quality of energy development strategies and planning, especially in the electricity sector, ensuring stability, consistency, and flexibility, and aligning with the local economic and social development strategies and plans. Reviewing, adjusting, and promptly issuing relevant development plans for energy development according to the Planning Law.

- Establishing policies and mechanisms to encourage and support the development of manufacturing and service industries serving the energy sector, enhancing internal capacity, and aiming for exports; prioritizing the development of machinery manufacturing, electrical equipment, oil and gas, and oil and gas services. Improving the legal framework and encouraging and promoting the deployment of energy service companies' models.

Urgently establishing and implementing mechanisms and policies to increase the localization rate in the energy sector; ensuring the implementation of specific requirements and targets for localization rates for power plants in particular and energy projects in general.

Improving the state's production ordering policy to encourage domestic enterprises to implement complex, high-tech projects in the energy sector that meet international quality standards.

- Strengthening the delegation and decentralization of state management from central to local levels, ensuring effectiveness and efficiency, creating favorable business conditions for economic entities in the energy sector; timely resolving obstacles and barriers related to policies and legal regulations.

- Implementing the construction of an integrated, competitive, and transparent energy market. Enhancing the leading role of state-owned enterprises as regulatory tools for the state in the market, ensuring energy security and national security.

- Issuing regulations on the authority to decide investment policies for offshore wind projects, hydro/ammonia production projects using offshore wind, and offshore wind power export projects.

- Issuing pilot regulations and moving towards officially establishing a direct power purchase agreement mechanism between renewable energy producers and synchronized consumer customers with amendments to the Electricity Law and a roadmap to implement a competitive electricity market. Researching the development of fee regulations for direct power purchase agreements (DPPA).

- Organizing research and evaluating the potential of non-traditional energy sources.

More details can be found in Decision No. 215/QD-TTg, taking effect on March 1, 2024.

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