After years of pilots and policy discussions, Vietnam’s Direct Power Purchase Agreement (DPPA) framework is now law. Decree 57/2025/ND-CP, effective in 2025, establishes the rules for direct transactions between renewable energy producers and large commercial/industrial (C&I) consumers.
What is DPPA?
DPPA allows eligible large electricity consumers to purchase power directly from renewable energy generators — bypassing EVN’s traditional procurement process. This enables:
- Price certainty via long-term contracts (typically 10–20 years)
- Renewable energy certificates for sustainability reporting
- Potentially lower costs compared to grid tariffs in some scenarios
Who Qualifies?
Under Decree 57/2025, eligible buyers are consumers with:
- Monthly consumption above the threshold set by ERAV (details in implementing guidelines)
- Connection to the medium or high-voltage grid
- Compliance with technical standards for metering and communication
Two Paths to DPPA
1. Physical DPPA (Direct Wire)
The producer and consumer are connected via a dedicated transmission line. Suitable for large industrial parks where a nearby renewable project can supply power directly.
Pros: Simpler commercially, no grid usage fees on the direct portion Cons: Significant infrastructure cost, geographic constraints
2. Virtual DPPA (Through the Grid)
Power flows through the national grid. The consumer pays EVN for grid services; a financial contract with the producer settles the renewable energy component.
Pros: Flexible, scalable, no infrastructure requirement Cons: More complex settlement, exposure to grid tariff changes
What Hasn’t Changed
DPPA doesn’t mean you leave the grid entirely. You still:
- Pay grid access and transmission fees to EVN
- Need backup power arrangements for supply gaps
- Comply with ERAV metering and reporting requirements
The Opportunity for Foreign Companies
For multinationals with RE100 commitments or Scope 2 emissions targets, DPPA provides a credible, auditable path to renewable energy claims in Vietnam — something that was difficult to achieve before.
The key challenge is navigating the regulatory and contractual complexity. Vietnam’s legal framework is relatively new, implementing guidelines are still being issued, and working with local counterparties requires understanding the local market dynamics.
If your company is evaluating renewable energy procurement in Vietnam, I offer advisory services covering DPPA deal structure, counterparty assessment, and regulatory navigation.
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