Belle of the Corporate Renewables Procurement Ball: DPPA in Vietnam

Global economic uncertainty caused by the global trade war has shifted supply chains and put a stop to business as usual. The tariffs on China have forced many of the world’s largest companies to reassess their supply chain investments, leading to a new country of focus: Vietnam. While Vietnam has been an important player for large-scale manufacturing across industries for decades, the country has become increasingly attractive for its feasibility for corporate renewable energy procurement. 

The recent introduction of the Direct Power Purchase Agreement (DPPA) in Vietnam in 2024 has been hailed as a key driver for advancing renewable energy adoption in the country. By enabling companies to purchase electricity directly from producers, DPPA offers greater flexibility in energy sourcing. This move toward a more open and competitive energy market is expected to attract increased investment in renewable energy projects and position Vietnam as a strategic hub for clean energy procurement.

Legal Framework: The DPPA mechanism was officially established by Decree 80/2024/ND-CP on July 3, 2024, with further updates under Decree 57/2025/ND-CP on March 3, 2025. As the framework was only recently established, the market participants are still in the early stages of exploring and negotiating opportunities under the new regulations.

Models of DPPA

• Physical DPPA (aka Private Line Model, PLM): Direct connection via privately built and operated transmission lines between the generator and the consumer. Parties negotiate all terms, including price and delivery, with no cap on capacity or output. The buyer cannot resell the electricity.
• Virtual/Financial DPPA (Grid-connected Model, GCM): The generator sells electricity to the national grid under a standard PPA with EVN, while the consumer buys from the grid. Both parties enter a contract for difference (CfD) to settle the price difference between the agreed rate and the market rate. This model allows for renewable energy attributes to be transferred, though specifics on "green" certification are still being developed.

‍Eligible Participants

• Sellers: Renewable energy generators, including wind, solar, and (as of Decree 57) biomass projects with capacity of 10 MW or more.
• Buyers: In 2025 (as of Decree 57) the previous fixed threshold for large consumers (200,000 kWh/month and 22 kV voltage level) was removed. Instead, the Ministry of Industry and Trade (MOIT) is now empowered to determine and adjust eligibility criteria in line with the evolving electricity system.

Pricing: Local developers expect DPPA prices in Vietnam to match or be 2–3% lower than grid prices, but further savings are limited due to additional system and balancing charges payable to EVN.

Challenges and Opportunities

• Implementation Details: Some aspects, such as the transfer of renewable energy certificates and detailed market rules, remain to be clarified by future MOIT circulars.
• Developers in Vietnam are actively seeking DPPA offtakers, as they are often required to secure a Memorandum of Understanding (MoU) or similar in-principle agreement with a corporate buyer in order to qualify for offsite project registration or participate in government bidding processes.

As global supply chains realign and global companies seek to build more sustainable, resilient supply chains, Vietnam’s DPPA framework offers both flexibility and opportunity for direct renewable energy procurement. While the regulatory landscape is evolving and certain implementation details remain to be clarified, the DPPA mechanism has been attracting significant interest from both energy developers and corporate buyers—particularly given the 2025 U.S.-enacted tariffs. By encouraging investment in renewables, Vietnam is not only solidifying its position as a manufacturing powerhouse but also emerging as a regional leader in clean energy—a model for other emerging markets aiming to achieve ambitious climate goals.

For additional questions about DPPA in Vietnam, please contact Director of Renewable Energy Solutions, Irina Bonge at Irina@RenEnergyGlobal.com.