Rooftop Solar Power Can Be Traded Directly Without EVN

The recently issued Government Decree allows rooftop solar power projects or waste-to-energy, biomass power to be traded directly without going through EVN.

This provision is outlined in the Government’s Decree on the direct power purchase agreement mechanism (DPPA) between renewable energy producers and large electricity consumers, issued on July 3rd.

The Decree allows for direct power trading via two methods: through private transmission lines and the national grid (via EVN).

For private transmission lines (not through EVN), renewable energy producers eligible for this mechanism include solar power, wind power, small hydroelectric power, biomass, geothermal, ocean wave, tidal, and current energy, as well as rooftop solar power systems. These projects are not limited in capacity but must be licensed for electricity operations or exempted according to regulations.

Waste-to-energy has not been included in this mechanism due to unclear regulations on whether it qualifies as renewable energy, as previously explained by the Ministry of Industry and Trade. This type of energy may be included if approved by competent authorities.

To trade through private transmission lines, renewable energy producers and large consumers will sign a power purchase agreement with conditions and prices mutually agreed upon. Excess electricity can be sold back to EVN through purchase agreements stipulating capacity, production, and price.

Besides purchasing directly from renewable energy producers, consumers can also buy electricity from the Electricity Corporation or non-Electricity Corporation retailers.

A corner of the rooftop solar power system at Dong Nai Port.
A corner of the rooftop solar power system at Dong Nai Port.

Currently, the country has more than 103,000 rooftop solar power projects with a total installed capacity of over 9,500 MW. According to Power Development Plan VIII, the scale of this source will increase by 2,600 MW or reach 50% of office buildings and residential houses by 2030.

The introduction of a mechanism allowing rooftop solar power to participate in direct power trading will help resolve obstacles for this type of energy, in addition to the self-production and self-consumption development policy being drafted by the Ministry of Industry and Trade.

According to the Decree, wind and solar power projects must have a capacity of over 10 MW to participate in direct power trading through the national grid.

For direct power trading through the national grid, the Decree clearly specifies that the sale of electricity by renewable energy producers must go through the spot market and be traded with the Electricity Corporation.

According to regulations, the spot market price is the full market electricity price formed in each transaction cycle of the spot market. This price is determined by the sum of the energy price and the market capacity price in the wholesale market.

In both cases, the buyers are organizations or individuals using electricity for production with a voltage level of 22 kV or higher, with an average monthly consumption of 200,000 kWh. This level is lower than the 500,000 kWh proposed in previous drafts.

According to surveys from electricity corporations, large customers using 500,000 kWh or more account for about 30%, while those using 200,000 kWh or more total over 7,700 customers, accounting for 36.5% of total electricity consumption.

Retail electricity units in industrial, economic, and export processing zones must be licensed for electricity retail operations, with a monthly purchase volume of 200,000 kWh or more, connected at a voltage level of 22 kV or higher.

The DPPA mechanism has been repeatedly requested by foreign-invested enterprises for early piloting in Vietnam, as they believe this policy will positively impact energy sector competition.

The draft DPPA pilot was previously proposed by the Ministry of Industry and Trade nearly three years ago, with an initial pilot capacity of 1,000 MW. At that time, many large corporations such as Samsung proposed to participate.

A survey conducted by the Ministry of Industry and Trade late last year showed that about 20 large enterprises wanted to purchase electricity directly, with a total demand of nearly 1,000 MW. Additionally, 24 renewable energy projects with a capacity of 1,773 MW wanted to sell electricity through the DPPA mechanism, while 17 projects with a capacity of 2,836 MW were considering participation.



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