Vietnam's Renewable Energy Surge

Vietnam's Renewable Energy Surge

The Ministry of Industry and Trade (MoIT) in Vietnam has presented a groundbreaking proposal to establish direct electricity trading pathways, bypassing the traditional involvement of Vietnam Electricity Group (EVN), the country’s primary power entity.

This innovative framework offers two options: customers can acquire electricity through privately funded power lines or directly engage with the national grid system, enabling a direct connection between power generators and consumers. The MoIT’s visionary initiative aims to create streamlined electricity trading mechanisms between renewable energy producers and major power consumers, with potential for private lines to operate independently of EVN.

The proposal outlines specific conditions and regulations for renewable energy generators and large industrial consumers, ensuring compliance with electricity purchase and sale guidelines. This approach provides greater flexibility, freeing power generators and significant consumers from limitations related to capacity, output, voltage connection, and usage intent. Power generation entities are responsible for investing in and executing power projects aligned with the nation’s strategic electricity development plan, including adhering to regulations for acquiring electricity operation licenses.

The retail electricity price for larger consumers adheres to the guidelines set in Decision 1062, dated May 4. Additionally, customers have the alternative option to participate in electricity trading through the national grid system, which involves EVN as an intermediary, maintaining a structured transactional process. This mechanism applies specific conditions to both buyers and sellers, requiring wind or solar power plants to seamlessly integrate into the national power grid and have an installed capacity exceeding 10MW.

Large-scale power consumers, including entities and individuals procuring electricity for industrial use at 22 kilovolts and above, are the primary focus of this approach. The upcoming Law on Price and its corresponding fee guidelines will further enforce the seamless distribution and supply of electricity, with the responsibility falling on the electricity retail unit. Decision 24 by the prime minister outlines the mechanism for adjusting average retail electricity prices, while Decision 28 structures retail electricity tariffs.

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