A law change in Vietnam has prompted speculation that there will be an increase in interest in solar power and other renewable energy sources.
The regulation issued last week, called Decree-80, now allows businesses to purchase renewable energy from producers. This is a change to the previous status quo, wherein businesses had to rely on state-owned Vietnam Electricity for power.
As a key element of the decree, direct transactions between buyers and private producers will reduce their reliance on the grid.
Climate Consultant Nguyen Ngoc Huy told outlet Nikkei Asia: “This [decree] is an important open mechanism to encourage investors — electricity sellers — to develop renewable energy, and at the same time encourage manufacturers — electricity buyers — that need clean energy to be carbon neutral in their net-zero journey,”
Direct Power Purchase Agreements (DPPAs) are anticipated to alleviate strain on the country’s grid. The grid itself is considered outdated, with complaints noting the string of blackouts in 2023 which affected companies such as Samsung Electronics.
In 2019, Vietnam was Southeast Asia’s premier solar power producer. However, there has been a resurgence in reliance on coal since.
Despite this, Vietnam’s government predicted in 2023 that coal’s presence in the country’s energy mix would decrease by 2030, with renewables comprising 80% by 2050.
Aler Grubbs, Mission Director for the U.S. Agency for International Development’s Vietnam, says: “The DPPAs will enable businesses to reduce their carbon footprint while also enabling Vietnam to accelerate its clean energy transition and advance its goal of net-zero emissions by 2050.”
