US applauds Vietnam for approving DPPA decree

'The US Mission to Vietnam through the US Agency for International Development (USAID) has provided technical assistance to the Ministry of Industry and Trade (MoIT) since 2017 on the design, development, and approval of the DPPA. USAID will continue to partner with MoIT on the DPPA’s implementation.

“I extend my sincere congratulations to the MoIT for their dedication and hard work in bringing this DPPA to fruition,” US Ambassador to Vietnam Marc Knapper shared at the DPPA launch event on July 5. “Our Comprehensive Strategic Partnership marks a new era of collaboration between our two nations, and the DPPA is a testament to our deepening ties and shared commitment to sustainable development.”

When implemented, the new policy will allow businesses in Vietnam to purchase electricity directly from private firms producing renewable energy, enabling them to power their operations with 100 per cent renewable energy. This will help Vietnam attract private sector investment in renewable energy while meeting the needs of corporate leaders seeking to integrate renewable energy into their operations and achieve their corporations’ emissions reduction targets.

“The US Mission to Vietnam through USAID is honoured to have partnered with the MoIT over several years to reach this milestone,” said USAID/Vietnam Mission director Aler Grubbs. “The DPPA will enable businesses to reduce their carbon footprint while also enabling Vietnam to accelerate its clean energy transition and advance its goal of net-zero emissions by 2050. The US remains Vietnam’s partner as you roll out this important initiative and expand Vietnam’s access to clean and renewable energy.”

The DPPA will enable international and domestic businesses in Vietnam to achieve greater carbon-reduction towards their net-zero goals while accelerating the country’s clean energy transition. The US partners with Vietnam to reduce greenhouse gas emissions and increase resilience to climate change for those most vulnerable to its impacts, by, in part, supporting a fair and inclusive energy transition.

The US is a committed partner of Vietnam in advancing the country’s transition to a clean, secure, and market-based energy sector, in line with the two countries’ shared priorities under the Comprehensive Strategic Partnership.

24 renewable energy projects with a combined capacity of 1,773MW have expressed interest in participating in a pilot scheme for a direct power purchase agreement (DPPA) in Vietnam, according to the Ministry of Industry and Trade (MoIT) in a report submitted to Prime Minister Pham Minh Chinh las week.

The draft decree on direct power purchase agreements, if adopted, will be a convenient mechanism for both renewable energy power generation projects and large customers, but there are still concerns about power transmission and expanding the number of electricity buyers.

The business community has asked for relaxed regulations for large customers to be able to buy and sell electricity directly.