Vietnam Mulling Pilot For Corporate Power Purchasers

Ministry Of Industry & Trade Vietnam Contemplating Up To 1 GW Renewable Energy Power Supply To Private Sector Under Corporate PPA Pilot, Says Law Firm Baker McKenzie
06:30 AM (Beijing Time) - 09. February 2020
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Vietnam’s Ministry of Industry and Trade (MOIT) proposal for a DPPA pilot in Vietnam initially envisaged up to 400 MW capacity to be allocated but was scaled up to 1 GW due to asks of large power consumers, says Baker McKenzie. (Photo Credit: Electricity of Vietnam)

Key Takeaways

  • Vietnam’s Ministry of Industry and Trade (MOIT) is working on launching a pilot project to allow renewable energy generators getting into direct PPA arrangement with private power consumers
  • It is aiming for a renewable energy capacity of up to 1 GW to be contracted under the arrangement
  • Wind and solar power projects with a minimum capacity of 30 MW and with grid-connection approval in areas with no or few risks of grid congestion will be eligible to participate
  • Large power consumers in the industrial manufacturing sector will be the only participants in the pilot
  • Proposal has been submitted to the Prime Minister and is subject to publi comments and government approval

Vietnam’s Ministry of Industry and Trade (MOIT) plans to initiate a pilot program to allow direct power purchase agreement (DPPA) between renewable energy companies and private power consumers aiming for off-site renewable energy projects.

Law firm Baker McKenzie says this Proposal No. 544 has been submitted by the ministry to the country’s Prime Minister and is subject to public comments and the government’s final decision. The pilot DPPA was initially planned to have 400 MW capacity, but large power consumers recommended the ministry to scale it up to 1 GW and implement it across the nation between 2020 and June 30, 2022.

Wind and solar power generating companies with grid connected projects of at least 30 MW capacity will be eligible to participate in the pilot. Priority will be given to projects in areas with no or few risks of grid congestion, as per the proposal submitted.

Participating consumers should be from the industrial manufacturing sector alone and priority will be given to those who have made international commitments for climate change mitigation and sustainable development.

Deployment of this capacity is large enough for MOIT to assess its success and challenges if any.

According to a Bloomberg New Energy Finance (BloombergNEF) report the year 2019 saw more than 100 corporations in 23 nations signing up for 19.5 GW of clean energy contracts (see 19.5 GW Corporate Clean Energy Contracts In 2019).

Recently, Vietnam fixed $0.0935 per kWh as the feed-in-tariff (FIT) rate for rooftop solar power systems installed till 2021 (see $0.0935/kWh Rooftop Solar FIT To Continue In Vietnam).

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani