Participants at the Public Consultation Workshop on DPPA Design and Pilot Planning for Việt Nam. — Photo World Bank

HÀ NỘI — The Ministry of Industry and Trade (MoIT) and the US Embassy on Wednesday introduced a proposal for a Direct Power Purchase Agreement (DPPA) in Việt Nam.

This new policy is expected to allow businesses in Việt Nam to procure electricity directly from private firms producing renewable energy and enable them to power their operations with 100 per cent renewable energy.

During the development of this innovative mechanism, the MoIT’s Electricity Regulatory Authority of Vietnam (ERAV) consulted with investors, financial institutions, Electricity of Vietnam (EVN) and its subsidiaries, private power producers, and other potential market participants to develop a successful DPPA pilot programme.

Since 2017, USAID’s Vietnam Low Emission Energy Program has helped ERAV to identify the conditions needed to implement a DPPA policy in Việt Nam. USAID’s support has followed three steps, including a legal and institutional review, a review and recommendation of DPPA models, and a roadmap for a DPPA pilot to test preferred models for suitability in Việt Nam.

After recommending a DPPA design that suits the conditions in Việt Nam today, USAID is now working closely with ERAV to formulate the DPPA pilot programme that, after final approval, will begin later this year.

Speaking at the Public Consultation Workshop on DPPA Design and Pilot Planning for Việt Nam held in Hà Nội on Wednesday, US Ambassador to Viet Nam Daniel J. Kritenbrink said the DPPA mechanism would allow Việt Nam to rapidly achieve its renewable energy goals by attracting private sector investment and meeting the needs of corporate leaders seeking to expand their operations in the country.

The DPPA mechanism is an enormous opportunity for solar and wind developers to mobilise private capital to build major new solar and wind energy farms. Over 30 large international and domestic businesses represented by the Renewable Energy Buyers Alliance Vietnam are supporting this effort, and emphasised the critical need for accurate power market data to support low-risk transactions to power the clean energy revolution in Việt Nam.

In addition to the DPPA, USAID works to support Việt Nam in improving energy security through a series of utility scale solar and wind projects, providing technical assistance to the MoIT for energy planning, and working with the private sector to increase the finance available to support Việt Nam’s vision for a clean and reliable energy system for the future. — VNS