tải bet88A mecchanism in support of renewable energy development

Decree No. 80/2024/ND-CP was issued by tải bet88 government on July 3, 2024, outlining regulations for direct power purchase agreements (DPPAs) between renewable energy producers and large electricity consumers. tải bet88 Decree is deemed compatible with Vietnam’s policies and strategies aimed at attracting both domestic and foreign investment, particularly from enterprises utilizing advanced and environmentally-friendly technologies.

Two methods of direct electricity trading

Decree No. 80 defines direct electricity trading as tải bet88 process of buying and selling electricity through two distinct methods.

tải bet88 first involves direct power purchases via dedicated connection lines, which entails executing a power purchase agreement and transmitting electricity through a dedicated private connection line connecting a renewable energy generator with a significant electricity consumer, as outlined in Chapter II of tải bet88 Decree.

tải bet88 second method, direct power purchase via tải bet88 national power grid, entails tải bet88 purchase and sale of electricity through fixed-term contracts between renewable energy producers and large electricity consumers, or authorized retail electricity providers in designated areas, in accordance with Chapter III of tải bet88 Decree. This includes renewable energy producers selling their entire electricity output to tải bet88 immediate electricity market within tải bet88 competitive wholesale electricity market; large electricity consumers or authorized retail electricity providers in designated areas entering into contracts with Electricity of Vietnam (EVN) or its authorized / delegated units to fulfill all their electricity needs; and renewable energy producers and large electricity consumers or authorized retail electricity providers in designated areas engaging in electricity trading through fixed-term contracts.

Regarding tải bet88 first method, tải bet88 Decree outlines that renewable energy producers and large electricity consumers engage in direct electricity transactions through these dedicated connection lines based on tải bet88 following principles.

An electricity purchase agreement must adhere to Article 22 of tải bet88 Law on Electricity and relevant legal provisions. This includes key aspects such as contracting parties, usage purposes, service standards and quality, rights and obligations, electricity pricing, payment methods, contract duration, termination conditions, responsibilities for contract breaches, and other agreed-upon terms.

tải bet88 agreed electricity selling price applies, except as specified in Article 6.4 of tải bet88 Decree.

Renewable energy producers negotiate, agree upon, and sign electricity purchase contracts with EVN or its authorized entity concerning capacity, output, and pricing for surplus electricity, as stipulated.

In addition to direct electricity transactions via a dedicated connection line, large electricity consumers may purchase electricity from EVN or authorized retail providers as regulated.

In cases where tải bet88 electricity utility performs both generation and retail functions in integrated area-based or clustered models, electricity procurement from tải bet88 national grid and other sources for retail sale to consumers in these models must comply with tải bet88 regulations on electricity pricing implementation issued by tải bet88 Ministry of Industry and Trade (MoIT).

Regarding tải bet88 second method, tải bet88 Decree specifies tải bet88 sale of electricity by renewable energy producers through tải bet88 spot electricity market and purchasing electricity from tải bet88 EVN.

tải bet88 spot electricity market price is determined by tải bet88 electricity energy market price and electricity capacity market price, as specified in regulations on operating a competitive wholesale electricity market issued by tải bet88 MoIT.

Multiple goals

According to tải bet88 MoIT, tải bet88 enactment of Decree No. 80 will enable tải bet88 government to pursue several objectives concurrently: meeting tải bet88 increasing demand for clean energy among electricity consumers, attracting investment in sustainable renewable energy development to safeguard tải bet88 environment, advancing tải bet88 implementation of a competitive retail electricity market in Vietnam, and enhancing tải bet88 effectiveness of State management over direct electricity trading between renewable energy producers and major electricity users.

tải bet88 Decree also aligns with Vietnam’s policy to encourage and attract both domestic and foreign enterprises, particularly those with advanced, eco-friendly technologies, to invest in tải bet88 country, and ensures compliance with tải bet88 Law on Electricity and related directives.

As per tải bet88 Vietnam Energy Association, prompt approval of Decree No. 80 by tải bet88 Prime Minister to expedite tải bet88 implementation of tải bet88 DPPA mechanism will introduce additional market “buyers” beyond EVN and its current distribution subsidiaries, thereby advancing tải bet88 market towards competitive wholesale and retail stages.

Moreover, tải bet88 DPPA mechanism will create opportunities for substantial investment in renewable energy sources and facilitate tải bet88 early acquisition of renewable energy certificates and carbon emission reduction certificates by enterprises, enhancing tải bet88 competitiveness of their products for international markets.

However, in tải bet88 current context, as well as in tải bet88 short term, tải bet88 Vietnam Energy Association also highlights several important considerations.

Firstly, whether through direct (via dedicated connection lines) or virtual (via tải bet88 national power grid) power purchase agreements, there is significant strain on tải bet88 electricity grid to balance tải bet88 increasing share of renewable energy. Therefore, it is essential to implement appropriate moderation policies that align with tải bet88 grid’s capacity.

Secondly, tải bet88 current high prices of gas and storage are double tải bet88 retail electricity price of EVN, discouraging external enterprises from investing in this sector, despite tải bet88 ambitious targets set in Vietnam’s Power Development Plan VIII (PDP8). If EVN undertakes these investments independently, it risks financial losses. However, without adequate gas and storage infrastructure, meeting tải bet88 demand for renewable energy from enterprises interested in DPPAs becomes unfeasible.

Thirdly, Vietnam currently does not employ a two-part electricity pricing system. This results in exorbitant costs to prepare and maintain standby power capacity for customers engaging in DPPAs, particularly for renewable energy plants. Selling electricity based solely on real-time supply and demand within tải bet88 restricted market price limits without capacity charges leads to unfair business conditions, as EVN lacks tải bet88 necessary funds to sustain standby power capacity.

Box:

During a government-led meeting on May 14 to review and discuss tải bet88 draft Decree on DPPAs, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan presented a number of key points. tải bet88 draft covers direct power purchases through both dedicated connection lines and tải bet88 national power grid, outlining implementation procedures and responsibilities for involved parties. It also aims to ensure feasibility, immediate implementation, and minimal regulatory guidance. This Decree’s development aligns with tải bet88 growing demand for clean energy among electricity consumers. Discussions at tải bet88 meeting clarified detailed regulations, including criteria for defining scope and participant eligibility based on generation capacity, consumption levels, and transmission voltages. Concepts such as “large customers” and direct purchase and sale relationships involving power generation units, consumers, and EVN were also addressed. Additionally, procedures for determining consumption levels and issuing green credit to renewable energy-using enterprises were also on tải bet88 agenda. Chairman of EVN’s Board of Directors Dang Hoang An expressed confidence in establishing an unrestricted direct power purchase market where buyers and sellers bear all associated costs to ensure grid safety, operation, and transmission. Representatives from associations and foreign enterprises urged tải bet88 prompt issuance of tải bet88 Decree with specific mechanisms and policies aligned with tải bet88 PDP8 for renewable energy development. They advocated removing consumption limits for customers purchasing electricity via dedicated connection lines and clarifying costs related to direct power purchase and transmission through tải bet88 national power grid.