Official Trading of Electricity from Renewable Energy Sources Without EVN
On July 3, the Government of Vietnam issued Decree No.80/2024/NĐ-CP to regulate the trading between entities that generate electricity from renewable energy sources and large electricity consumers.
According to the Decree, the trading can be carried out through private power lines or the national grid (i.e. through EVN).
Specifically, buying and selling electricity through private power lines involves signing an electricity purchase and sale agreement and delivering electricity through a private power line between an entity and a large electricity consumer.
The Decree stipulates that the trading must follow the prescribed regulations for this method.
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Entities that generate electricity from renewable energy sources include solar power, wind power, small-scale hydropower, biomass power, geothermal power, wave power, tidal power, ocean currents power, and rooftop solar systems. These projects are not limited in capacity but must be granted an electricity operating license or be exempt from licensing according to regulations.
Large electricity consumers are individuals or organizations that purchase an average monthly consumption of 200,000 kWh or more.
The price of electricity directly purchased through private power lines is determined by mutual agreement between the two parties. For any surplus electricity, the entity may sell it back to EVN under a power purchase agreement that specifies the power, output, and price.
In addition to these entities, electricity consumers can buy from the Vietnam Electricity Corporation (EVN) or other retailers.
Concerning buying electricity through the national grid, the Decree also clearly regulates the sale of the entities through the day-ahead electricity market and the trading with EVN.
According to the regulations, the day-ahead electricity market price is the entire electricity market price formed for each trading cycle of the market. It is determined by the sum of the electricity market price and the capacity market price. The electricity and capacity market prices are determined according to the Circular on the operation of the competitive wholesale electricity market issued by the Ministry of Industry and Trade.
According to surveys from EVN, large customers using electricity of 200,000 kWh or more currently have more than 7,700 customers, accounting for 36.5% of total electricity.
Electricity retailers in industrial, economic, and export processing zones must obtain a license to sell electricity. They should have a minimum purchasing output of 200,000 kWh per month and be connected to a voltage level of 22 kV.
There have been several proposals by FDI enterprises in Vietnam to pilot the Direct Power Purchase Agreement (DPPA) soon. They believe that this policy will positively impact competition in the energy industry.
The draft for the DPPA pilot was released for comments by the Ministry of Industry and Trade almost three years ago. The initial pilot capacity was set at 1,000 MW, and at that time, many large corporations such as Samsung expressed interest in participating.
