The U.S. Embassy in Vietnam has applauded the Vietnamese government for enacting the Decree on Direct Power Purchase Agreement (DPPA), which satisfies the needs of businesses to use renewable energy and contributes to the country’s efforts to achieve net-zero emissions by 2050.

“I extend my sincere congratulations to the Ministry of Industry and Trade (MoIT) for their dedication and hard work in bringing this DPPA to fruition,” U.S. Ambassador to Vietnam Marc Knapper shared at the DPPA launch event on Friday. 

The bilateral comprehensive strategic partnership has marked a new era of collaboration between our two nations, and the DPPA is a testament for the two sides’ deepening ties and shared commitment to sustainable development, the ambassador commented.

Through the U.S. Agency for International Development (USAID), the U.S. has provided technical support to the MoIT since 2017 on the design, development, and approval of the DPPA, the embassy said, adding that USAID will continue to partner with MoIT on the DPPA’s implementation.

The new policy will allow businesses in Vietnam to purchase electricity directly from private firms producing renewable energy, enabling them to power their operations with 100 percent renewable energy.

This meets the needs of corporate leaders seeking to integrate renewable energy into their operations and achieve their corporations’ emissions reduction targets, thereby helping Vietnam attract more investment from the private sector in renewable energy.

The DPPA will enable international and domestic businesses in Vietnam to reduce their carbon footprint toward their net-zero goals while accelerating the country’s clean energy transition that aims to achieve its goal of net-zero emissions by 2050, the USAID remarked.

Workers install rooftop solar power panels at a building in Vietnam. Photo: TTO

“The U.S. remains Vietnam’s partner as you roll out this important initiative, and expand Vietnam’s access to clean and renewable energy,” USAID/Vietnam Mission Director Aler Grubbs affirmed.

The decree on DPPA was issued by the government on July 3, with immediate effect, facilitating the direct purchase and sale of rooftop solar power and other renewable energy sources through both private transmission lines and the national grid.

Many foreign-invested enterprises in Vietnam, including those in manufacturing or high-tech industries, have repeatedly requested Vietnam to launch the DPPA mechanism.

These firms have commitments and roadmaps to achieve net zero emissions in line with the world realizing climate goals, so they want to ensure that the electricity used in their production is 100 percent clean.

A survey conducted by the MoIT in late 2023 showed that some 20 large companies, including South Korea’s tech giant Samsung and U.S.-based footwear and apparel giant Nike, were interested in direct power purchase in Vietnam, with their total demand of nearly 1,000 MW.

In addition, 24 renewable energy projects with a total capacity of 1,773 MW wished to directly sell power under the DPPA, and 17 other projects totaling 2,836 MW considered joining the mechanism.

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