Workers of Việt Nam Electricity is checking the transmission system. Deputy Prime Minister Trần Hồng Hà emphasised the importance of ensuring feasibility of the direct power purchase agreement (DPPA) mechanism to create a foundation for a competitive power market. — VNA/VNS Photo Huy Hùng

HÀ NỘI — Deputy Prime Minister Trần Hồng Hà asked to focus on ensuring feasibility of the direct power purchase agreement (DPPA) mechanism to create a foundation for a competitive power market.

Speaking at the meeting discussing the draft decree on DPPA on Tuesday, Hà said that the implementation of power policies remains slow due to the lack and inconsistency in the legal framework.

DPPA is considered a foundation for Việt Nam to develop a competitive power market in which the State management will be separated from electricity production, transmission and distribution. The State management will only focus on ensuring the national energy security while enterprises, whether state-owned or private, can compete equally, Hà stressed.

The DPPA decree needs to clarify participants, responsibilities and obligations of parties to ensure economic benefits and grid safety.

In addition, it is necessary to develop policies to encourage the use of green and renewable energy to get green credits.

With regard to the proposal of conducting direct power trading through private lines or investing in new storage system, Hà said that the regulations should be developed towards not regulating the capacity limits.

Hà asked the Ministry of Industry and Trade and Việt Nam Electricity (EVN) to calculate and announce the renewable power capacity which can be raised as a basis for reducing coal- and gas-fired power sources in the planning, emphasising that the eighth national power development plan (PDP8) does not limit the development of renewable energy providing that it meets technical criteria to replace other sources at reasonable prices.

The decree also needs regulations to ensure transparency in the use of electricity sources of enterprises for the granting of green credits.

According to Deputy Minister of Industry and Trade Nguyễn Sinh Nhật Tân, the draft regulates the direct power purchase to be conducted via the national grid and separate lines, implementation procedures and responsibilities of relevant parties.

The viewpoint of the decree is to ensure feasibility without issuing sub-documents.

Accordingly, direct power purchase through separate lines can be applied to customers who are located near generation sources with the prices agreed upon the generators and customers.

Direct power purchase through the national grid will be applied to customers who are located far the generation sources and conducted via the spot electricity market with fees including transmission, distribution, dispatching, trading operation, and others.

A representative from Việt Nam Electricity Association said that it is necessary to strictly manage the direct power purchase through separate lines to prevent rampant development and disruptions to existing planning.

The DPPA is expected to be submitted to the Government for consideration within this month.

Under the Government’s power market development plan approved in 2013, Việt Nam aimed to develop a competitive generation market in 2012-18, a competitive wholesale electricity market from 2019 and a competitive retail electricity market from 2023.

However, the implementation failed to meet the target. Currently, the competitive power market are mainly formed for generation and wholesale while the retail market is still at early stage. — VNS