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Vietnam set to allow bilateral PPAs through pilot scheme



The Vietnamese government is all set to allow bilateral power purchase agreements (PPAs) through pilot scheme.

Though the scheme to open up the power market couldn’t accelerate earlier, now it is likely to resume from the next year. It will take at least two years for the operation. Since 2020, the government has drafted several pieces of legislation and amendments.

According to Vietnam’s Ministry of Industry and Trade (MIOT), it will “enable renewable energy generators to directly sell electricity to private off-takers under virtual or synthetic deals.”

So far, only the state-owned energy company Electricity Vietnam (EVN) has been deciding over the transmission, distribution, wholesale, and retail of electricity. It is the sole buyer in the market.

A report stated that after the scheme, the off-taker can buy electricity at the retail price instead of spot market price plus PPA charges.

Moritz Sticher, senior advisor at consulting firm Apricum, was quoted in the report, “This mechanism now gives investors a fixed tariff and puts the risk of tariff fluctuation on the off taker. The tariff change from wholesale to retail tariff for off-takers means around 2% more share to EVN and hence slightly reduced returns on the investor side and slightly less attractive for off-takers due to the change in electricity tariff risk.”

As per the latest data, Vietnam currently has around 18.47 GW of solar capacity installations. Up to 2045, Vietnam’s National Power Development Plan VII has kept solar targets to 13.6 GW of utility-scale and 3.4 GW of rooftop solar.

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