There have been numerous discussions about the new direct power purchase mechanisms (DPPA) introduced under Decree 80/2024 our own briefing note. In this post, we focus on issues which are unclear under Decree 80/2024 and require more clarification. Terms defined in our briefing note will have the same meaning when used herein.  These issues are:

• Decree 80/2024 introduces the concept of “Authorised Electricity Retailer in Zones” (Đơn vị bán lẻ điện tại các mô hình khu, cụm được ủy quyền). However, it is not clear who will verify and determine whether an electricity retailer will qualify as an Authorised Electricity Retailer in Zones. Decree 80/2024 does not make clear if the parties to the DPPA mechanism can verify the qualification of an Authorised Electricity Retailer in Zones or will require a third party (even the authority) to do so.

• To purchase power via a DPPA mechanism, a customer is required to consume an average 200,000 kWh per month. If a Consumer consumes less than 200,000 kWh per month then the DPPA relating to such Consumer may have to be terminated. However, it is not clear if the 200,000 kWh threshold includes the amount of power purchased from (1) both EVN and the RE Generator or (2) EVN only. In other words, it is not clear Decree 80/2024 requires a Consumer to purchase at least 200,000 kWh from EVN. This interpretation seems not logical but not impossible.

• In the Grid Connected DPPA, the Authorised Eletricity Retailer in Zones will sign a power purchase agreement with EVN. However, it is not clear the Authorised Eletricity Retailer in Zones will enter into and perform the PPA with EVN in its own capacity or in its capacity as an agent of the Large Manufacturing Consumer.  If the Authorised Eletricity Retailer in Zones enters into and perform the PPA in its own capacity then it will need a back-to-back arrangement with the Large Manufacturing Customer so that it can pass through the risks under the PPA with EVNto the Large Manufacturing Customer.

• Decree 80/2024 allows the authority broad discretion to suspend or terminate a DPPA arrangement if it considers that there is an act of taking advantage of the mechanism and policy to gain profit. See further discussion on this issue here.

This post is written by Nguyen Quang Vu.