The Ministry of Industry and Trade has just sent a document to the Ministry of Justice for appraisal of the draft Decree on the mechanism for direct power purchase and sale (DPPA mechanism)
Implementing the tasks in Resolution No. 103/2023/QH15 dated November 9, 2023 of the National Assembly on the Socio-economic Development Plan 2024 and under the directions of the Prime Minister, based on the Law on Issuance of Legal Documents, dated April 9, 2024, the Ministry of Industry and Trade signed a decision to establish a Drafting Committee and an Editing Team for the Decree on the mechanism for direct power purchase and sale between power generation units and large power consumers ( DPPA mechanism).
According to the report of the Electricity Regulatory Authority, as of April 25, the Drafting Committee and Editing Team received written comments from 30 units.
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Based on the comments, the Drafting Committee and the Editing Team have studied and incorporated the explanations into Draft 2 of the Decree on DPPA mechanism in the direction of streamlining and completing the appraisal dossier (Government Request for Draft Decree; Draft 3 of the Decree on DPPA mechanism; Government Report on policy impact assessment; Summary table of comments, proposed amendments and supplements, and explanations of the Ministry of Industry and Trade) sent to the Ministry of Justice, and at the same time reported to the Prime Minister.
On April 26, 2024, the Government Office issued Official Dispatch No. 2840/VPCP-CN announcing the opinion of Deputy Prime Minister Tran Hong Ha on agreeing with the Ministry of Industry and Trade’s proposal to develop and promulgate the Decree on the DPPA mechanism in accordance with the streamlined procedures. The Ministry of Industry and Trade has sent a document to the Ministry of Justice on the appraisal of the Draft Decree on DPPA mechanism.
As soon as it receives the appraisal document from the Ministry of Justice, the Ministry of Industry and Trade will deploy the work of reviewing and incorporating the comments of the Ministry of Justice and finalizing the Draft Decree before submitting it to the Government for consideration and approval.
The Draft Decree on DPPA mechanism focuses on 2 policies: (1) direct power purchase and sale between power generation units and large customers via private transmission lines; (2) direct power purchase and sale between power generation units and large customers through the national grid.
Completing and submitting for appraisal the Draft Decree on the mechanism for direct power purchase and sale
Together with the draft Decree, the Ministry of Industry and Trade also attached a report assessing the impacts of the proposal on policies with specific analyses of 2 options for each policy.
Regarding the policy of direct power purchase and sale via private lines, the Ministry of Industry and Trade proposes choosing Option 2 because it has many positive impacts. Specifically, in terms of economy, it will create momentum and encourage investment in renewable energy projects; create new job opportunities for the people; reduce intermediary operating costs, increase the efficiency of electricity use.
Option 2 in terms of social – environment, will help customers proactively choose their power supply; have more control over the power source and related services. Encouraging the use of electricity from renewable energy sources, contributing to the goal of reducing carbon emissions and protecting the environment, reducing dependence on polluting energy sources. There is no impact or influence on the legal system; no additional administrative procedures are created.
Regarding the policy of direct power purchase and sale through the national grid, the Ministry of Industry and Trade proposes choosing Option 2 because it is in line with the concentrated development of wind power and solar power; reduce complexity in management and require less infrastructure investment.
Specifically, in terms of the economy of Option 2, it will help reduce electricity costs for large power consumers; create additional income for renewable energy generation units, while attracting investment in the renewable energy sector; promotes the development of the renewable energy industry and creates jobs, contributes to economic growth and income distribution; reduces energy risks due to diversification of supply sources and impacts by external factors.
