There is a lot of interest in DPPAs in Vietnam, though there have been challenges in seeing actual agreements realised. With this latest announcement from Samsung, it seems those challenges may be easing.
Samsung Electronics Vietnam Thai Nguyen has said it has signed Vietnam’s first Direct Power Purchase Agreement, allowing it to buy solar power directly from a private generator, the firm has said in a press release.
The agreement will supply Samsung Electronics Vietnam Thai Nguyen with about 70 gigawatt-hours of electricity each year from the Duc Hue 2 Solar Power Plant in Tay Ninh.
This is the first commercial deal completed since Vietnam’s Direct Power Purchase Agreement mechanism took effect, the press release says.
Notably, this has been a long time coming, with the mechanism approved back in 2024.
Though a positive sign for the process, there still may be changes needed, with concerns raised around current participation requirements.
Belgium-invested Deep C Industrial Zones, for example, was reported back in January to have asked for electricity consumption requirements to be eased, with current minimum consumption thresholds limiting access to the mechanism for small and medium enterprises.
Under the current mechanism, buyers must be classified as large electricity consumers, which is defined as using at least 200,000 kilowatt-hours per month.
Deep C, however, has said many small and medium enterprises cannot meet this threshold, especially for rooftop solar in industrial zones, but need renewable energy to meet international obligations.
The Ministry of Industry and Trade (MoIT), which designed the mechanism, was reportedly working on a draft decree at the time that would lower the threshold to 100,000 kilowatt hours per month for private grids, while keeping 200,000 kilowatt hours for projects connected to the national grid; however, the proposed changes do not appear to have been finalised.
That said, there are still a number of firms pushing ahead.
Pandora Production Vietnam has signed a memorandum of understanding with Vietnam Singapore Smart Energy Solutions to source electricity from a solar farm for its manufacturing facility.
The agreement enables direct supply of solar power to Pandora’s crafting facility located in the Vietnam Singapore Industrial Park III.
Sweden’s Syre has said it wants guaranteed access to one hundred percent renewable electricity for its planned polyester fabric recycling project in Gia Lai.
Syre wants to buy renewable electricity directly from power producers, including through private transmission lines, rather than relying solely on the national grid, and has asked the local government for support to make it happen.
That is to say, there is a lot of interest in DPPAs in Vietnam, but up to this point, the mechanism has largely been only on paper. This announcement from Samsung, therefore, is significant in that it shows that it is practically possible.