According to Decree No. 80/2024/ND-CP of the Government, effective from July 3, 2024, rooftop solar power, waste-to-power, biomass power, wind power, and small hydropower projects can participate in the direct power purchase mechanism (DPPA).
Direct power purchase via private lines
Direct power purchase via a dedicated connection line is the activity of signing a power purchase agreement and transferring electricity through a dedicated connection line between a renewable energy generator and a large electricity consumer.
With this form, the decree stipulates that renewable energy generators and large electricity consumers must conduct direct power purchase through a dedicated connection line in accordance with prescribed principles.
Participants
-
Generators: Include solar, wind, small hydropower, biomass, geothermal, wave, tidal, ocean current power plants, and rooftop solar power systems with an electricity generation license.
-
Customers: Organizations and individuals with an average monthly electricity consumption of 200,000 kWh or more.
Electricity price
Mutually agreed upon by the two parties. Renewable energy generators negotiate, agree, and sign power purchase contracts for capacity, output, and price for surplus electricity with the Electricity Corporation of Vietnam (or authorized unit) as prescribed.
Direct power purchase via the national grid (through EVN)
Also according to the Decree, wind and solar power projects wishing to participate in direct power purchase through the national grid must have a capacity of over 10 MW.
Implementation way
-
Selling electricity on the day-ahead electricity market: The electricity price is determined according to each trading cycle of the day-ahead electricity market, which is the sum of the electricity price and the market capacity price on the wholesale market.
-
Buying and selling through the Electricity Corporation: The generator signs a power purchase agreement with the Electricity Corporation to ensure national grid security.
Highlights of direct power purchase
-
Eliminates EVN's intermediary role: Power purchase takes place directly between the generator and the customer, helping to reduce costs and increase flexibility for both parties.
-
Competitive prices: Electricity prices are negotiated between the two parties, instead of applying the retail price set by EVN. This can help businesses and consumers save on electricity costs.
-
Encourage investment: DPPA creates a new investment channel for rooftop solar power projects, attracting capital from businesses and investors.
Practical benefits for investors and customers
DPPA brings many practical benefits to investors and large electricity customers:
-
Remove barriers to rooftop solar power development: Eliminate barriers of complex power purchase procedures and cumbersome procedures, making it easier for investors to enter the market.
-
Encourage self-production and self-consumption of energy: Businesses and households can self-generate and consume electricity, reducing dependence on the national grid and saving electricity costs.
-
Reduce the burden on the national grid: Contribute to reducing the pressure on the national power system, especially during peak hours.
-
Bring economic benefits: Investors can recover capital faster, electricity customers can buy electricity at cheaper prices.
Direct power purchase is an important step to remove barriers to the development of rooftop solar power, a potential renewable energy source but facing many obstacles due to traditional power purchase policies. With the efforts of the government, businesses, and people, Vietnam can effectively exploit the great potential of rooftop solar power, contributing to the sustainable development of the renewable energy industry and environmental protection.
GIANT BARB SCIENCE AND ENVIRONMENT JOINT STOCK COMPANY
📞 Hotline: +84 995 206 666
✉️ Email: info@giantbarb.com
🏢 Headquarter: No.07 Ton That Thuyet, Dich Vong Hau ward, Cau Giay district, Ha Noi