Guidance for the registration of Direct Power Purchase Agreement (DPPA) issued by National Electricity System and Market Operation (NSMO) Company Limited of Vietnam

 On August 2024, Deputy Prime Minister Tran Luu Quang has signed Decision No. 752/QD-TTg of the Prime Minister on separating the National Electricity System Dispatch Center (A0) from the Electricity of Vietnam (EVN) and the policy of Founding the National Electricity System and Market Operation Company Limited (NSMO) under the State Capital Management Committee at Enterprises.
The NSMO is responsible for being the national power system dispatching unit, operating electricity market transactions according to the provisions of the Electricity Law and related laws, and the charter capital of NSMO at the time of its founding is 776 billion VND.
On 31 December 2024, the NSMO has released an Official Dispatch No. 1543/NSMO-TTĐ on Guidance for participation in the Direct Power Purchase mechanism (DPPA) between Power Generation Units from renewable energy sources and Large Electricity Consumers with attached appendices.

SUMMARY & KEY TAKE-AWAYS

The Guidance references to Decree 80/2024/ND-CP (Decree 80/2024) which governs the DPPA mechanism, it also outlines procedures, methods, forms, and coordination for registering to participate in the DPPA mechanism. Here is a summary of the Guidance for registration of a Direct Power Purchase Agreement (DPPA):
1.1. Scope of Guidance
 The guidance applies to:
o Registration to participate in the DPPA mechanism via a separate connection line.
o Power generation units from renewable energy sources.
o Large electricity consumers.
o Electricity retailers in authorized zones and clusters
 It applies to power generation units from renewable energy sources with a capacity of 10MW or
more, connected to the national grid.
1.2. Key Definitions
 DPPA is defined as a direct electricity trading mechanism between power generation units from renewable energy sources and large electricity consumers.
 Large electricity consumers (LEC) are those who purchase electricity for production purposes from EVN (Vietnam Electricity) or power distribution units at a voltage of 22kV or higher.
 Authorized Units are defined as the LEC and renewable energy power generation units that authorize the performance of submitting documents to participate in the DPPA mechanism.
1.3. Principles for DPPA Registration
 DPPA via separate connection line:
o Must comply with regulations in Decree 80/2024 related to the electricity trading mechanism.
o LEC must provide a written notice (along with a copy of the electricity trading contract) between LEC and the renewable energy power generation unit to relevant local power
company and NSMO.
o NSMO is responsible for managing and updating information according to regulations for management and operation purposes.

 DPPA via the national grid:
o The DPPA registration dossier must comply with regulations for each entity.

1.4. DPPA Registration Process via National Grid
 Entities conduct the procedures to send registration documents to the relevant unit.
 NSMO provides information and guides the entities in completing the registration.
 LEC and the renewable energy power generation unit agree to authorize a representative to submit the registration dossier to NSMO.
 The registration dossier must comply with regulations.
1.5. Responsibilities of Relevant Parties
 NSMO Responsibilities:
o Receives, manages, and aggregates registration information from LEC and renewable energy power generation units via separate connection lines.
o Examines the completeness of the dossiers.
o Coordinates with relevant parties to inspect the actual implementation status.
 Responsibilities of Power Companies:
o Register accounts on the online system of NSMO to extract information and assign feedback results.
o Provide opinions and confirm information to NSMO.
 Responsibilities of LEC and renewable energy power generation units:
o After completing the negotiation and signing of the electricity trading contract via a separate connection line, the LEC is responsible for providing a copy of the signed electricity trading contract to the renewable energy power generation unit.
o Update information as required.
1.6. Suspension, Termination, and Re-participation
 The document outlines the processes for suspending, terminating, and re-participating in the DPPA mechanism.
 NSMO is responsible for reporting to the Electricity Regulatory Authority about cases of temporary suspension from the DPPA mechanism.
 Ministry of Industry and Trade decides on the suspension of operation in the electricity market.
 Re-participation in the DPPA mechanism must comply with regulations.
1.7. Required Documents
 A list of documents is detailed in Appendix II.5 for registration to participate in the DPPA via the national grid. These include:
o Registration form.
o Power operation license.
o Electricity purchase agreement.
o Minutes of agreement on installation of measuring equipment.
o Termination minutes of the old electricity purchase agreement.
 Note:
o The document includes flowcharts detailing the registration process for DPPA.
o There are specific forms and templates provided for various steps in the registration process.
o The guidance emphasizes compliance with existing regulations and legal documents.

WHAT WE CAN OFFER?

ALTAS provides comprehensive support for foreign businesses in Vietnam. The services cover:
(i) Legal Advice in the energy and renewable energy sectors, particularly solar power generation, including advising clients on a range of power project agreements;
(ii) Establishment of Foreign Business Entity, including registration and amendment to any content ofthe establishment license;

(iii) Legal retainer services: ALTAS offers ongoing legal counsel for a fixed monthly retainer including access to all lawyers across the firm's various practice departments, ensuring comprehensive support throughout the retainer period;
(iv) Management of all tax-related matters, from planning to reporting and settlement;
(v) Accounting services, including bank account management and cash book maintenance;
(vi) Handling employment relations, payroll, compulsory insurance, and personal income tax;
(vii) Supporting foreign employees with work permits, labor contracts, and residence cards; and
(viii) Providing secretarial services such as obtaining Judicial Records, consular legalization, translating documents, etc.

CONCLUSION

ALTAS offers comprehensive assistance to ensure compliance with Vietnamese regulations, encompassing the preparation of essential documentation, the acquisition of necessary permits, and the navigation of post-licensing requirements. Please contact Partner Mr. Chris Luong via email chris.luong@altas.vn for further information.

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Written: Luong Van Chuong - Partner Lawyer at  ALTAS Law & Chau Thi Bich Tram - Legal Associate

Date: 25/02/2025