02 mechanisms of direct power purchase in Vietnam from July 3, 2024

02 mechanisms of direct power purchase in Vietnam from July 3, 2024

Direct power purchase is the activity of trading and delivering power conducted through 02 forms as follows:

(1) Direct power purchase via dedicated Connection Line is the activity of signing a power purchase agreement and delivering power via a dedicated Connection Line between the Renewable Power Generation Unit and the Large Power Consumer as stipulated in Chapter II Decree 80/2024/ND-CP.

(2) Direct power purchase via National Grid is the activity of trading power through Forward Contracts between the Renewable Power Generation Unit and the Large Power Consumer (or the authorized electricity retailer in designated areas) and the trading activities conducted as stipulated in Chapter III Decree 80/2024/ND-CP including:

• The Renewable Power Generation Unit sells all produced power to the spot electricity market of the competitive wholesale electricity market;

• The Large Power Consumer or the authorized electricity retailer in designated areas signs a power purchase agreement with the Power Corporation (or an authorized/delegated unit) to purchase the entire electricity needed;

• The Renewable Power Generation Unit and the Large Power Consumer or the authorized electricity retailer in designated areas trade power through Forward Contracts.

The direct power purchase between the Renewable Power Generation Unit and the Large Power Consumer must comply with regulations in Vietnam on:

• Planning, investment (under the responsibility of the Power Plant Investor, including compatibility with the national power development plan, provincially approved plans by competent authorities);

• Regulations on issuing electricity operation licenses (under the responsibility of the Power Plant Investor);

• Regulations on electrical safety, fire, and explosion safety in construction, land use, environmental protection, operation (generation, transmission, distribution), and safety in power usage;

• Regulations on power trading and contracts and other related regulations in Vietnam.

More details can be found in Decree 80/2024/ND-CP effective in Vietnam from July 3, 2024.

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