Updates to the new draft decision on the corporate DPPA pilot program for renewable energy

On 11 January 2022, the Office of Government of Vietnam (OOG) issued Document No. 229/VPCP-CN to the Ministry of Industry and Trade of Vietnam (MOIT) for the next steps of updating the draft regulations on the implementation of the pilot program on the direct power purchase agreement (DPPA) mechanism between renewable energy power generation companies and major power consumers. Accordingly, the deputy prime minister in charge of the power sector formally agreed to assign the MOIT to develop a new draft DPPA pilot regulation in the form of a Prime Minister decision, ensuring transparency, efficiency, lawfulness, and sustainable development of the power sector.

 

Previously, the MOIT submitted its Report No. 94/BC-BCT dated 29 October 2021 proposing a new draft legal document regarding the implementation of the DPPA pilot program in the form of a Prime Minister Decision. Respective initial comments and opinions for that purpose have also been obtained from the relevant ministries (including the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Justice) during November – December 2021.


Compared to the previous draft (in the form of a MOIT circular), this new draft in the form of a Prime Minister decision made significant changes to the tariff mechanisms and transaction structures. A key new change proposed by the MOIT under its Report No. 94/BC-BCT is that the power consumers will take and buy power from EVN/PC at the retail price (instead of the VWEM spot market price plus DPPA charges as proposed under the previous draft MOIT circular). However, as a next step, the MOIT will need to prepare an updated version of the New Draft DPPA Decision and then, probably an implementing Circular of the MOIT to provide more details – which should be subject to public comments and further revisions before finalization.


Read the full alert here.


Source: CCIPV / Oanh Nguyen / Thanh Hai Nguyen / Baker & McKenzie Vietnam

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