Could you provide insights into the current legal frameworks supporting solar energy development in Vietnam and how these frameworks impact the operations of Asia Clean Capital?
On December 2023, the Ministry of Industry and Trade submitted an official letter No. 8691/BCT-DL seeking opinions from authorities in relation to a dossier for promulgating a decree on mechanisms to encourage the development of rooftop solar system (“RTS”) (“Draft RTS Decree”).
This Draft RTS Decree sets out the future development framework for both On-Grid RTS and Off-Grid RTS (for self-consumption). Regarding On-Grid RTS, it shall be registered with the local People’s Committee (including being subject to allocated threshold). Regarding Off-Grid RTS, even if it shall be registered with the local People’s Committee, the allocated threshold is unlikely applicable.
However, there are many discussion points of the Draft RTS Decree which need comments and clarifications from other Ministries and even the Standing Committee of the National Assembly. The stakeholders are watching this Draft RTS Decree closely because it is expected to be issued in August 2024, if no delay occurs.
As the Co-Lead of DPPA/PPA Sub-Group and member of the Green Growth Sector Committee of the European Chamber of Commerce in Vietnam (“EuroCham”), what specific mechanisms do you believe are crucial for promoting Direct Power Purchase Agreements (DPPA) in Vietnam?
On December 2023, the Green Growth Sector Committee of EuroCham sent an official letter to the Ministry of Industry and Trade in regard with DPPA mechanism which has started since the middle of 2017 after the Vietnam Prime Minister approved the principle to implement the Vietnam Low Emission Energy Program using non-refundable ODA through the U.S. Agency for International Development’s in accordance with Decision 1050/QD-TTg dated July 19th, 2017. Furthermore, the Minister of the Ministry of Industry and Trade approved the technical support for project documents in accordance with Decision 3993/QD-BCT dated October 19th, 2017.
There have been draft versions of the DPPA in the form of the Prime Minister’s Decision, one draft version in the form of the Ministry of Industry and Trade’s Circular, and one Draft version under the Prime Minister’s Resolution. Following the Prime Minister directive on August 15th, 2023, the Ministry of Industry and Trade has sent to the Prime Minister the Report No. 202 dated October 24th, 2023 on research to formulate a mechanism for the DPPA between the large-scale end users and the renewable energy generators, in the form of the Government’s Decree (“Draft DPPA Decree”).
This Draft DPPA Decree shall be crucial for promoting DPPA in Vietnam provided that the Draft DPPA Decree provides clear guidance regarding the roadmap for the DPPA development including the signals for market liberation and data for the calculation of service charges for transmission fee and other system cost fees.
Vietnam is at its historic turning point for the next stage of its development journey, especially with the sustainable trend that multinational corporations are considering shifting partly their supply chain to Vietnam. One of the key elements for multinational corporations to do that is the access to green energy so that they can reach their Net zero ambitions in the pre-2030-2040 period. Therefore, DPPA plays a crucial role to retain existing companies and to attract more investment into Vietnam.
What is your vision for the future of the solar industry in Southeast Asia, and how do you see collaboration playing a key role in achieving sustainability goals?
For the last two centuries, oil, natural gas and coal reserves have shaped the geopolitical landscape. However, we are witnessing a renewable energy century which “could transform global power relations no less than the historical shifts from wood to coal and from coal to oil.” as pointed out by the report named “A New World: The Geopolitics of Energy Transformation” released in January 2019 by the International Renewable Energy Agency. A transition from fossil fuels to renewable energy could lead to fewer confrontations over contested hydrocarbon reserves. This transition is also reflected in a visionary ASEAN Strategy for Carbon Neutrality released on August 19th, 2023.
As the Asian Century is coming with a historical shift from fossil fuels to renewable energy, peace surely leads to prosperity. That is a vision ASEAN countries should work together to achieve.
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