Vietnam Draft pilot program to directly trade renewable energy discussed in Vietnam

SAMSUNG shows interest to join the program

In the middle of-April 2021, the Ministry of Industry and Trade (MOIT) of Vietnam publicized the second version of the draft circular on pilot implementation of direct electricity trading between renewable power plants and users (hereinafter referred to as the “draft circular”) and solicited comments from the public. User companies successfully selected for this pilot program will be allowed to directly purchase electricity from solar or wind power companies. Samsung has already expressed its interests in this program to Vietnamese government.

The draft circular can be downloaded at:
http://legal.moit.gov.vn/default.aspx?page=document_bill&do=detail&doc_id=1131&rand=637539173477301563

 

Conditions for participating in direct trade of electricity

For the purpose of this draft circular, the term “renewable power plant” means a business that owns a plant with the capacity greater than 30 MW using wind or solar generation technology. Here, participant renewable power plants must have been included in relevant power generation plans approved by competent authorities and must have executed electricity supply and purchase agreements with users as stipulated in Article 11 of the draft circular.

On the other hand, users in this pilot program must use electricity at the voltage 22kV or higher for industrial purposes. The users also have to have executed electricity supply and purchase agreements with renewable power plants pursuant to Article 11 of this circular.

In this pilot program, users will be allowed to directly negotiate with renewable power plants to execute a fixed-term electricity supply and purchase agreement. The details of the agreements are provided in Annex III of the draft circular. In principle, the direct trade of electricity must be carried out in accordance with regulations on the operation of electricity market promulgated by MOIT. In addition, both of the renewable power plants and the users must execute electricity supply and purchase agreements with Vietnam Electricity. The details of these agreements are provided in Annexes II and IV of the draft circular.

 

How to apply for and criteria of selections of participants

Interested power plants and users must apply for the participation in the pilot program via a dedicated website provided by MOIT. The application deadline will be 45 days of the release of the dedicated on-line application page on MOIT website. The list of required documents and formats for making an application are provided in Annex I of the draft circular. MOIT will release the on-line application page for this program within 15 days of the effective date of the circular.

Article 11 of this draft circular stipulates the criteria for selecting participants for this pilot program as follows:

  • Being a user of electricity as a manufacturing company that has committed to achieve a target regarding use of renewable energy
  • Being a user who has committed to purchase electricity equivalent to 80% or more of electricity supplied by Vietnam Electricity in the first 3 years of the participation in the pilot program (i.e., 2021 to 2023).
  • Being a power plant that has committed to officially start operation of the power plant and to join the electricity market within 270 working days of the day of announcement of the successful participants.
  • Being a facility that has a document from financial and credit institutions on financial supports for power generating projects.

After 45 working days of the end of the on-line application period, the successful applicant power plants and users will be announced by the Bureau of Power Coordination of MOIT.

 

Samsung expresses its interest

South Korea-based Samsung Electronics has already shown its interest in the pilot program, as reported by local media. It has been reported that Choi Joo Ho, CEO of Samsung Vietnam, has sent a proposal to MOIT on this program.