Vietnam Refines The Framework For Direct Power Purchase Agreement With Decree 57/2025

Following the issuance of the Law on Electricity 2024, Vietnam's Government has swiftly replaced its initial framework for Direct Power Purchase Agreements (DPPAs) under Decree 80/2024 by issuing Decree 57/2025 on 3 March 2025. Coming into effect immediately, Decree 57/2025 repeals Decree 80/2024, which had only been active since 3 July 2024. Decree 57/2025 largely maintains the two DPPA models introduced by Decree 80/2024  (1) via private line (Private DPPA) and (2) via the national grid (Grid-Connected DPPA), but introduces important changes impacting eligibility, pricing, and contractual details. Key changes include:

  • Flexible customer eligibility - Decree 57/2025 links customer eligibility (for initial participation and ongoing qualification) to a minimum consumption threshold (Minimum Take Amount) defined in the Wholesale Electricity Market Operation Regulations issued by the Ministry of Industry and Trade (MOIT). Decree 80/2024 instead used a fixed threshold (average ≥200,000 kWh/month). Accordingly, eligibility for participating in either DPPA model now depends on potentially dynamic wholesale market rules rather than a static figure, requiring ongoing monitoring of MOIT's regulations.

  • Stricter customer eligibility – A Large Customer in a DPPA arrangement which has been implemented for 12 months must ensure that in a calendar year, it has purchased from EVN the Minimum Take Amount for the 12 month periods ending on 31 October of the previous calendar year. Under Decree 80/2024, there is no requirement that the Minimum Take Amount must be purchased from EVN. It is not clear if this requirement will apply to a Private DPPA under which the customer purchases directly from the RE Generator.

  • Price cap for the Private DPPA - Decree 57/2025 requires that the negotiated PPA price under Private DPPA cannot exceed the applicable ceiling generation tariff for that renewable energy type. Decree 80/2024 allowed prices to be negotiated without explicitly mentioning this cap for the PPA price in this model.

  • Potential additional regulatory burden – Decree 57/2025 expressly requires a Large Customer or a RE Generator to comply with plan for development of grid network, plan for implementation of power development plan, and land use plan.

  • Potential Sale to Retailer A RE Generator in a Private DPPA arrangement is allowed to sell surplus electricity to a neighboring retailer in addition to sale to EVN and its subsidiaries.

  • Eligible RE Generators for a Grid-Connected DPPA - In addition to wind and solar power plants under Decree 80/2024, Decree 57/2025 expands eligibility to include biomass power plants with capacity of 10 MW or more participating in the wholesale market.

  • EV Charging Service – Decree 57/2025 expressly recognizes EV charging as a separate service (not as sale of electricity).

  • Output Allocation - While the mechanism allowing one RE Generator to contract with multiple customers existed previously in Decree 80/2024, Decree 57/2025 provides clearer details on how the generator's output is allocated amongst customers. It specifies this allocation must be based on agreed percentages (%) for each customer, with the total allocated percentage not exceeding 100%.Decree 80/2024 referred more generally to agreed "principles" for allocation.

  • No Template Of Model PPA - Regarding the PPA between the RE Generator and EVN (for spot market sales) and the PPA between the Power Corporation and the consumer, Decree 57/2025 now only sets out key required contents, instead of more detailed PPA templates under Decree 80/2024. This might allow for more negotiation flexibility on their terms under Decree 57/2025, provided the PPAs cover the required key contents and are not contrary to the provisions of Decree 57/2025.

  • Uncertainty Remained – Decree 57/2025 still maintains the right of the authority to suspend or terminate a DPPA if the parties abuse the policies for profit causing unrecoverable damages (lạm dụng chính sách để trục lợi và hậu quả gây ra không thể khắc phục). This uncertainty could make it difficult for parties to enter into a long term DPPA.

This post is written by Ha Thanh Phuc and Nguyen Quang Vu. Defined terms used in our earlier post will have the same meaning when used herein.