This photo shows power lines in Hanoi, Vietnam, Tuesday, July 9, 2024. Vietnam will let electricity-guzzling factories buy electricity from wind and solar power producers, helping big companies like Samsung Electronics meet their climate targets and relieving pressure on the country's overstrained grid.
“The DPPA will dramatically alter this status quo,” said Giles Cooper, a partner at the international law firm Allens based in Hanoi who specializes in energy policy. Lee said the amount of power generation under such agreements increased from 15 gigawatts in 2021 to 26 gigawatts in 2023, growth concentrated in India, Australia and Taiwan, which account for more than 80% of the total capacity that is under contract.
About 20 large companies are interested in buying clean energy directly from producers, according to a survey conducted by Vietnam’s Ministry of Industry and Trade, with total demand estimated at nearly 1 gigawatt of energy. Its factories transitioned to renewable energy in 2022 by buying renewable energy credits. “Now, with the DPPA mechanism, we have more options to procure renewable energy and look forward to working with the Vietnam government to further develop and implement PPAs,” it said.in its production during the COVID-19 pandemic, also welcomed the reform as an “important step towards a cleaner grid.”
This could be an obstacle for factories where it is impossible to build a solar or wind farm close by, meaning that companies can only buy clean power “virtually,” buying the energy from the state utility, EVN, which would purchase the power from the solar or wind farm, with the buyer making up any difference in costs between the government rate and the one agreed on in the purchasing agreement.