Vietnam Launches Full DPPA Regime for Renewable Power

Strategic Insights -

Decree 57, issued by the Government of Vietnam on 3 March 2025, establishes a formal legal framework for Direct Power Purchase Agreements (DPPAs) under the Electricity Law 2024. This breakthrough update replaces the pilot mechanism introduced under Decree 80 and provides clearer pathways for renewable energy generators (RE GENCOs) and large electricity consumers to transact electricity directly, either through private infrastructure or the national transmission system. The new framework has generated significant interest among market participants, particularly in the renewable energy sector, as it promises to unlock new opportunities for clean energy procurement and project structuring.

Key Takeaways:

  • Decree 57 formally defines a "private grid" under the Off-Grid DPPA Model, allowing RE GENCOs to construct and operate their own infrastructure to deliver electricity directly to end users, without requiring grid access or EVN coordination.
  • The Off-Grid DPPA Model has been expanded to include waste-to-energy projects, enabling municipalities and waste management operators to participate in the DPPA market while addressing solid waste challenges.
  • Large electricity consumers eligible to engage in Off-Grid DPPAs must have an average electricity consumption of at least 200,000 kWh/month over the past 12 months or be newly registered with expected monthly consumption of at least 200,000 kWh.
  • Excess electricity produced by renewable generators under Off-Grid DPPAs can be sold to the National Grid, within energy parks or industrial clusters, or from other power sources to the grid, with applicable tariffs ranging from VND1,184.90/kWh to VND200,000/kWh.
  • The Grid-Connected DPPA Model has been expanded to include biomass power plants, in addition to solar and wind projects, and allows eligible generators to participate directly in the Vietnam Wholesale Electricity Market (VWEM).
  • Market participants can expect further clarifications from the Ministry of Industry and Trade (MOIT) on DPPA registration, pricing transparency, and dispatch coordination.

Statistics:

  • 20% of actual RTS electricity output can be sold to EVN under the Off-Grid DPPA Model.
  • Grid-connected DPPAs are eligible for participants with a minimum installed capacity of 10 MW and a minimum average electricity consumption of 200,000 kWh/month.
  • Eligible generators under the Grid-Connected DPPA Model include ground-mounted solar projects, wind farms (onshore and offshore), and biomass plants.
  • Biomass plants are eligible to participate in Grid-Connected DPPAs under Decree 57, alongside ground-mounted solar projects and wind farms.

Sources:

  • Government of Vietnam, Decree 57/2025/ND-CP (Decree 57)
  • Government of Vietnam, Decree 80/2024/ND-CP (Decree 80)
  • Electricity Law 2024
  • Vietnam Wholesale Electricity Market (VWEM)
  • Ministry of Industry and Trade (MOIT)
  • Frasers Law Company, Legal Update - Vietnam Launches Full DPPA Regime for Renewable Power (EN) - April 2025.pdf