Ministry of Industry and Trade builds decree on direct electricity purchase and sale 'for immediate use'

On April 10, in Hanoi, the Ministry of Industry and Trade held a meeting of the Drafting Committee to build Decree on Direct Power Purchase Agreement (DPPA), chaired by Minister of Industry and Trade Nguyen Hong Dien.

Bộ trưởng Bộ Công thương Nguyễn Hồng Diên chủ trì xây dựng Nghị định cơ chế mua bán điện trực tiếp — Minister of Industry and Trade Nguyen Hong Dien presides over the development of a Decree on the mechanism for direct electricity purchase and sale.

The decree must be used immediately.

According to the decision of the Ministry of Industry and Trade, the Drafting Committee for the Decree consists of 20 members representing the Ministry of Industry and Trade, the Government Office, the Ministry of Justice, the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Public Security, the Ministry of Natural Resources and Environment, the Central Committee of the Vietnam Fatherland Front, the Vietnam Confederation of Industry and Commerce (VCCI), and the Vietnam Consumer Protection Association. Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan is the head of the committee.

Minister Nguyen Hong Dien said that the Ministry of Industry and Trade has been developing the DPPA since 2019, consulting domestic and foreign consultants on many important contents. Up to now, the Government and the Prime Minister have agreed to develop the decree and assigned the ministry to implement it.

At the meeting, members contributed their opinions to the draft of the DPPA Decree. According to Mr. Dau Anh Tuan, Deputy General Secretary of VCCI, the development of this decree will solve two problems: a solid legal basis for projects as well as a financial plan through the spot delivery mechanism.

Mr. Trinh Quoc Vu, Deputy Director of the Department of Energy Saving and Sustainable Development, said that the decree should consider expanding the scope of participation of other types of energy instead of just wind and solar power plants.

Director of the Electricity Regulatory Authority Tran Viet Hoa said that the DPPA Decree cannot be separated from the mechanisms for electricity development and electricity prices, including transmission prices, and must be consistent with regulations on planning and investment...

Minister of Industry and Trade Nguyen Hong Dien said that the Prime Minister’s direction to develop the DPPA Decree is a very urgent issue for Vietnam and foreign investors. Without an incentive mechanism, investment in resources will be slow and cannot ensure the country’s electricity security in the coming years.

Reiterating the requirements for the drafting committee, Minister Nguyen Hong Dien emphasized that the DPPA Decree must be drafted in accordance with the direction of the Prime Minister, urgently following a shortened mechanism but must comply with legal regulations, shorten the time, and ensure quality.

"This decree needs to be designed to be usable immediately, not in the form of a framework decree or a tube decree," said Mr. Dien.

There will be a mechanism for electricity purchase and sale prices through the national electricity system.

Mr. Nguyen Hong Dien said that the DPPA Decree encourages the development of renewable energy; encourages clean power producers and revolves around 5 issues.

The first is the price mechanism, including transmission price, production price, distribution price... and through this price mechanism to implement regulation.

The second is through administrative procedures to resolve arising issues. The third is about the purchasing objects, which can be expanded to many more objects, not just production units and other types if needed.

Fourth, for the seller, it is necessary to consider. Fifth, regarding capacity, it should be considered to open in an unlimited direction, but it is necessary to calculate how to facilitate the transmission problem.

Besides, Mr. Nguyen Hong Dien suggested that the DPPA Decree must take into account the price mechanism for cases of electricity purchase and sale through the national electricity system.

Concluding the meeting, the Minister of Industry and Trade requested that, by April 12 at the latest, members of the drafting committee send their comments to the Electricity Regulatory Authority for acceptance. "The first draft must be published by April 15 at the latest to solicit public comments. It is expected that this draft will be submitted to the Government by the end of April and early May," Mr. Dien requested.

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