Vietnam’s Draft Electricity Law: Vu Phong Energy’s Insights & Renewable Transition

The Draft Electricity Law (Amended) in Vietnam is currently undergoing vital refinements, a process that will significantly shape the future of Vietnam’s energy landscape. For businesses operating within the sector, particularly those focused on renewable energy, navigating the complexities of regulation and investment can be a real challenge. Recently, Mr. Pham Dang An, Deputy General Director of Vu Phong Energy Group and Director of VP Carbon, actively participated in a crucial seminar aimed at contributing to these amendments. This seminar, hosted by the National Assembly Committee on Science, Technology, and Environment, offered a platform for key stakeholders to voice their perspectives and contribute to a more sustainable and robust legal framework. Read on to understand the key discussions and potential impacts of these changes.

Recently, Pham Dang An, Deputy General Director of Vu Phong Energy Group and Director of VP Carbon, actively participated in and contributed his expertise to a seminar focused on refining the Draft Electricity Law (Amended). The National Assembly Committee on Science, Technology, and Environment, in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI), hosted the seminar on September 6, 2024, in Ho Chi Minh City. Numerous delegates, including industry experts, regulatory officials, and energy sector representatives, attended the event, which facilitated comprehensive discussions and provided valuable input for the amendment of the Electricity Law.

The seminar’s primary objective was to gather insights from experts and businesses to finalize the Draft Electricity Law (Amended), a key initiative to facilitate Vietnam’s transition towards sustainable energy. Participants expressed agreement that the draft law reflects the Party and State’s commitment to reforming policies and establishing a synchronized, competitive, and transparent electricity and power sector market. The draft also aims to broaden ownership models, implement market-based pricing for various energy sources, and stimulate investment in wind, solar power, and other renewable energy technologies while establishing a framework for electricity price regulation.

The Draft Electricity Law (Amended) seeks to create a more robust legal foundation for the power sector, fostering new opportunities for businesses operating in the renewable energy space. A significant discussion point at the seminar involved proposing updated mechanisms for electricity auctions, establishing a legal framework for private enterprise electricity trading, and outlining policies related to grid infrastructure investment. These adjustments are designed to address the challenges associated with integrating renewable energy sources into the national grid, a critical concern for solar and wind energy projects.

During the seminar, attendees shared perspectives on the practicality of the proposed regulations within the Draft Electricity Law (Amended). Representatives from major industry players, international organizations, and independent experts underscored the importance of establishing a fair market mechanism that encourages profitable and sustainable investment in renewable energy projects.

As a representative of Vu Phong Energy Group, a leading renewable energy company in Vietnam, Mr. An, Pham Dang presented valuable viewpoints and recommendations regarding renewable energy investment and project development.

This included incorporating recent guidance from government agencies concerning the definition and regulation of self-generating and self-consuming solar power. This framework allows entities to produce and consume electricity on-site, with excess electricity being directed to the grid, capped at 20% of installed capacity in the North and 10% in the South. This regulation provides a solid legal base and creates new business opportunities as Vietnam transitions toward 100% renewable energy usage. Combined with renewable energy certificates, this approach supports the fulfillment of environmental and sustainability standards, such as the U.S. Clean Competition Act and the EU’s Carbon Border Adjustment Mechanism.

Furthermore, detailed regulations addressing connection procedures, safety standards, and fire protection are vital for ensuring the national grid’s integrity, safeguarding investor rights, and enabling businesses to maximize the benefits of renewable energy projects.

Mr. Thi, Ta Dinh, Vice Chairman of the Committee on Science, Technology, and Environment, emphasized that the insights and feedback from National Assembly delegates, experts, scientists, managers, and especially businesses – those directly impacted by the draft Law’s provisions regarding electricity pricing, green finance, the electricity market, Power Purchase Agreements, renewable and new energy development, and enforcement measures – will be instrumental. These discussions, particularly those from businesses directly affected, will aid the Committee on Science, Technology, and Environment in preparing a review report for submission to the Standing Committee of the National Assembly, which will subsequently be presented to the National Assembly for review and comments during the XIII Session, anticipated in October.

(): Báo Công Thương

Vu Phong Energy Group

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Source: https://vuphong.com/the-draft-electricity-law-amended/.