A wind farm in Gia Lai Province. The draft decree on direct power purchase agreement is expected to be submitted to the Government this month. — VNA/VNS Photo Vũ Sinh

HÀ NỘI — The Electricity Regulatory Authority under the Ministry of Industry and Trade said the draft decree on direct power purchase agreement (DPPA) has been completed and sent to the Ministry of Justice for evaluation and review.

After receiving comments from the Ministry of Justice, the Ministry of Industry and Trade will complete the draft and submit it to the Government for approval within this month.

In late April, the Government agreed to the Ministry of Industry and Trade’s proposal to build and issue the decree on DPPA following a simplified procedure.

The draft raises two options for direct power purchase between generators and large customers. The first option is through separate transmission lines and the second option is through the national grid.

Under the draft, the Ministry of Industry and Trade opted for the second option.

The ministry pointed out that choosing this option will encourage investments in renewable energy projects, create jobs, reduce intermediary operation costs and increase efficiency in electricity usage.

In terms of society and environment, it will allow customers to proactively choose power supply sources and have more control over the power sources and associated services.

It also encourages the use of electricity from renewable energy sources to contribute to the goal of reducing carbon emissions and protecting the environment.

Specifically, the second option will not cause any change in the existing legal system and there will be no administrative procedures to arise from the implementation of DPPA.

Direct power purchase through the national grid will also help prevent the complicatedness in management and will not require huge investment in the infrastructure system.

The mechanism will encourage investment in renewable energy, generate jobs, contribute to promoting economic growth as well as reduce risks thanks to the diversification of supply sources.

The DPPA is a long-waited mechanism with a number of investors and international organisations expecting its issuance as an impetus to the development of renewable energy and attraction of foreign investment into Việt Nam.

Trần Việt Hoà, Director of the Electricity Regulatory Authority, previously said that under the draft, the power purchase can be conducted through separate transmission network but must comply with the existing regulations on planning, investment, electricity operation safety and fire prevention as well as other relevant regulations.

Regarding the option of conducting via the national grid, the participant renewable energy generators must have the capacity from 10MW, and large customers must use electricity for product from a voltage level of 22kV and an average consumption of 500,000 kWh per month. — VNS