Clean Energy Buyers Association Welcomes Vietnam’s Final Decree Authorizing Direct Power Purchase Agreements

The Clean Energy Buyers Association (CEBA), whose more than 400 members include one-fifth of the Fortune 500, welcomes Vietnam’s issuance of a final decree on establishing a direct power purchase agreement (DPPA) for large energy customers in Vietnam, allowing for increased flexibility and transparency as well as an improved ability to procure electricity from high-impact renewable energy projects.

“The final decree on the DPPA marks a transformative step in clean energy procurement in Vietnam,” said Eric Gibbs, CEBA’s senior vice president of global programs. “The DPPA benefits CEBA members and other large energy customers by allowing for greater flexibility and more transparent negotiations on price, which will spur clean energy development to power Vietnam’s rapidly growing economy. This, along with no restrictions on capacity, output, or connection voltage level, provides a robust framework for large energy customers to procure energy in high-impact renewable energy projects.”

“At PepsiCo, we’re focused on reducing our emissions while increasing business resiliency,” said Roberta Barbieri, vice president of global sustainability at PepsiCo, a CEBA member. “As a global company, welcoming the DPPA mechanism to Vietnam will enable us, and other large energy customers, to drive scalable energy solutions on a local level. This is a true testament to the years of hard work and advocacy shown by CEBA and will significantly support the country of Vietnam in its net-zero journey.”

The Government of Vietnam expects electricity demand to grow 10-12% annually through 2030, one of the highest growth rates in Asia. The DPPA ensures this power demand driven by economic growth will be coupled with the deployment of reliable, clean energy for customers. The clarity and certainty established by the DPPA around key eligibility parameters makes it easier for international companies and their in-country value chain partners to accelerate their paths to decarbonization.

The July 3 decree, which had been in development since 2016, provides more detailed guidance while removing ambiguity around key parameters of power purchase agreement eligibility and contracting. The decree is an important step in helping Vietnam reach its goals to reduce emissions 15.8% by 2030 and achieve net-zero emissions by 2050. The decree’s key features include a physical DPPA, allowing procurement through private power lines with negotiated electricity prices, and a virtual DPPA, facilitating grid-based transactions with fixed-price contracts.

Gibbs noted: “The industry anticipates that the rollout of the DPPA will usher in a new era of clean energy procurement in Vietnam, providing large energy customers with unprecedented opportunities to meet their renewable energy needs. CEBA is ready to support our members in leveraging this framework to drive sustainability and economic growth.”

The establishment of the DPPA will serve as an important step in enhancing Vietnam’s competitiveness and sustainability goals. CEBA is committed to training its members and their supply chain partners in Vietnam on clean energy procurement, through the DPPA in addition to existing measures.