Vietnam: It is mandatory to use standard-form power purchase agreement when selling and buying electricity produced by biomass power projects

15:15, 12/03/2020

On March 05, 2020, the Prime Minister of Vietnam issued Decision No. 08/2020/QD-TTg providing amendments to Decision No. 24/2014/QD-Ttg on support mechanism for development of biomass power projects in Vietnam.

Decision No. 08/2020/QD-TTg of the Prime Minister of Vietnam stipulates that the seller and the buyer are required to use standard-form power purchase agreement (PPA) when selling and buying electricity produced by biomass power projects.

The buyer shall buy the total volume of electricity produced by biomass power projects in conformity with regulations on operation of the national electrical grid and relevant technical regulations/standards applicable in the electrical sector; maximize the generation capacity and electricity produced by biomass power projects.

Also according to Decision No. 08/2020/QD-TTg, the period of validity of a PPA for electricity produced by a biomass power project is 20 years from the commercial operation date. After this period, the extension to the signed PPA or conclusion of a new PPA shall be carried out in accordance with regulations in force at the time when such extension or conclusion of new PPA is made.

More details can be found in Decision No. 08/2020/QD-TTg of the Prime Minister of Vietnam, which takes effect from April 15, 2020.

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