Direct electricity trading mechanism for Vietnam promulgated

Details

 This Decree allows direct electricity trading through two types:

• Direct electricity trading via private transaction line: This involves signing an electricity purchase contract and transmitting electricity through a private connection line between renewable energy generator and large electricity consumer (large consumer).
• Direct electricity trading via the National Grid: This involves buying and selling electricity through a forward contract between renewable energy generator and large consumer (or electricity retailer at the power stations). The spot electricity market price is determined by the sum of the market electricity price and the market capacity price.

Stakeholders in Direct Electricity Trading

• Renewable energy generators: An electric power unit that owns power plants from sources like solar, wind, small hydroelectric, biomass, geothermal, ocean waves, tides, and other forms of renewable energy. Other generators and rooftop solar power systems are granted electricity activity licenses or are exempted from licenses according to regulations.
• Electricity retailers in zones and clusters: Units licensed to operate electricity retail in zones and clusters with an electricity purchase output of 200,000 kWh/month or more with an electricity supply connection voltage of 22kV or more.
• Large consumers: Organizations and individuals who buy electricity for their own use and do not resell it, with an average consumption of 200,000kWh/month or more (average of the most recent 12 months) or registered output o`f 200,000kWh/month or more for customers using new electricity or having used electricity for less than 12 months.

Renewable energy generators and large consumers must comply with legal regulations on planning and investment (in accordance with the National Electricity Development Plan, provincial and city planning); regulations on licensing electricity activities; regulations on electrical safety, fire and explosion prevention safety in construction, land, environmental protection, and operation (electricity generation, transmission, distribution); and regulations on electricity trading and other regulations.

1. Direct electricity trading via private transaction line

Principles

• Contract and electricity price agreed upon by both parties.
• Renewable energy generators negotiate, agree, and sign electricity purchase contracts on capacity, output, and price for electricity surplus with Vietnam Electricity Group (or an authorized unit) according to the law.
• Beside direct electricity trading via private connection lines, large consumers are allowed to trade electricity with the Electricity Corporation (or other retailers) according to regulations.
• For electricity retailers in zones and clusters combining electricity generation and purchasing electricity from the national grid to retail electricity to customers, the retail electricity price to customers shall comply with regulations on implementation of electricity selling prices issued by the Ministry of Industry and Trade.

Responsibilities of Renewable energy generators

• Comply with Article 39 of the Electricity Law and regulations on:
  1. Issuing electricity activity licenses in the field of electricity generation and electricity retail licenses.
  2. Regulations on power transmission systems and distribution power systems issued by the Ministry of Industry and Trade.
  3. Regulations on safety in electricity generation, transmission, and distribution (Articles 54, 55 of the Electricity Law and guiding documents).
  4. Regulations on investment, construction, electrical safety, land, fire and explosion prevention, environmental protection, and other regulations.

Responsibilities of Large consumers

• Comply with regulations in Article 47 of the Electricity Law and regulations on:
  1. Safety in using electricity (Article 57 of the Electricity Law).
  2. Invest in power grid infrastructure to ensure the safety of the high-voltage power grid safety corridor.
  3. Have a team of power grid managers and operators with specialized training in electricity, trained, tested, and issued electrical safety cards according to regulations.
• Report to the Ministry of Industry and Trade and the People's Committee of the province/city within 10 days from the time of signing the contract of direct electricity trading, via postal service.

2. Direct electricity trading via the National Grid

Operating Principles

• The Renewable energy generators and Vietnam Electricity Group are responsible for agreeing and signing an electricity purchase contract on the spot electricity market according to the main contents specified in the Appendix to the Decree.
• The Renewable energy generators forecasts capacity in each transaction cycle (complying with the electricity distribution system regulations of the Ministry of Industry and Trade) and makes price offers for the entire forecast capacity of the plant according to regulations for operating the competitive wholesale electricity market issued by the Ministry of Industry and Trade.
• Based on the price quote for the next day and the price quote for the next trading cycle, the power system operating unit (National Load Dispatch Center (A0)) sets up a mobilization schedule for power plants and prepares a table of revenue payment statements of renewable energy generators in the daily electricity market within the transaction cycle and payment cycle. The electricity generating unit checks and confirms the list.
• The daily electricity market price is the total electricity market price, formed according to each transaction cycle in the market. Determined by the total market electricity price and market capacity price.
• Renewable energy generators, electricity system and electricity market operators, and Vietnam Electricity Group prepare, announce, check, confirm, and make payments according to contract agreements.
• Temporarily suspend, terminate, and restore participation in the direct electricity trading mechanism as specified in Article 27 of this Decree.
• The unit operating the electricity system and electricity market, the electricity corporation reports the results of direct electricity trading through the national grid every month, before the 20th of the following month.
• The Electricity Group reports to the Ministry of Industry and Trade on the results of implementing the direct electricity trading mechanism through the national grid nationwide on a quarterly basis, before the 30th day of the first month of the following quarter.
• The Electric Power Corporation, the Electricity Corporation, and the Electricity Market and System Operating Unit report to the Ministry of Industry and Trade and the Provincial/City People's Committee on the results of implementing the direct electricity trading mechanism through the national grid every year, before January 30 of the following year.

Participation

• Large consumers or electricity retailers in models of zones, clusters, and renewable energy generators send registration documents to participate in the direct electricity trading mechanism to the system operator (either directly or through postal services), including:
  • Written request to participate in the direct electricity trading mechanism;
  • Written agreement on signing principles;
  • Report on the current status of the renewable energy generators (type of plant, capacity, current status of the plant, infrastructure, current electricity price);
  • Information of large consumers or retail units in regional and cluster models (location, purpose of use, current electricity use status, infrastructure, and current prices);
  • The office agrees on principles for distributing actual electricity output.
• Within 5 working days, the operating unit reviews the responsiveness of the customer's records and sends them to the Electricity Corporation.
• Within 5 working days, the Electricity Corporation needs to confirm or respond to the readiness and expected time of signing the electricity purchase contract on the spot electricity market.

The annex to the decree stipulates:

• Sample electricity purchase contract on the spot electricity market (attached with a form of main parameters of the power plant; measurement and data collection system; agreement on operating characteristics; agreement on SCADA/system EMS communications, protective and automatic relays; electricity trading prices and electricity payments).
• Sample electricity purchase contract between large consumers (or authorized electricity retailers in zones and clusters) and the electricity corporation.
• Term contract form (between renewable energy generators and large consumers or electricity retailers in authorized zone and cluster models).
• Fees for clearing monthly differences.
• Report templates according to regulations on direct electricity purchase and sale reports.

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