Deputy Prime Minister Tran Hong Ha on May 14 presided over a meeting discussing a draft decree on regulations for DPPA (direct power purchase agreements).

Ha said the state has set orientations for the development of the energy sector, including a competitive power market. 

However, implementation of policies has been going slowly, attributed to the unsynchronized legal framework and business models. 

DPPA, stipulated in the Law on Electricity, is a foundation for a competitive power market. Under the law, state management is separated from production and business activities, and electricity transmission and distribution.

“In principle, the state only holds and invests in certain fields to ensure national power security, while businesses can make investments in the remaining fields based on the principle of fairness, with no discrimination between state-owned and private enterprises,” Ha said, adding that it is necessary to create roadmaps for electricity development and DPPA.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said the draft decree on DPPA stipulates different purchase models, including purchases carried out on separate transmission lines and purchases via the national grid. 

It also consists of articles on procedures for DPPA implementation and responsibilities of relevant parties. 

The Ministry of Industry and Trade (MOIT), the compilation agency, said the decree can take effect promptly, and there is no need to wait for legal documents that guide the implementation of the decree.

Under the draft decree, the direct purchases carried out on separate transmission lines are applied to clients near electricity generation sources. The purchases are not using national transmission and distribution lines. 

The direct purchase model is simple, with electricity prices negotiated between electricity generators and clients. The model has been applied in industrial zones.

Meanwhile, direct purchases via the national grid will be applied to clients far from electricity generation sources, and the purchases are carried out in a spot-delivery market. 

Clients have the responsibility of making payments in accordance with spot-delivery prices, plus service fees, including power transmission fees, power distribution, electricity system operating and dispatching, and electricity market transaction management fees, power system supporting service fees, and other costs.

The building and promulgation of a decree on DPPA will satisfy demand for clean energy, help attract investments in renewable energy development projects, and prepare for the establishment of a competitive power market in Vietnam.

Luong Bang