Representatives of foreign business associations have expressed their desire for Vietnam to implement the Power Development Plan (PDP) VIII without delay, heard the Vietnam Business Forum (VBF) 2024 held in Hanoi this week.

A power plant in Ca Mau Province. Photo: Hoang Anh/The Hanoi Times

Power shortage is a concern

Chairman of the South Korean Chamber of Commerce in Vietnam (Kocham) Hong Sun emphasized that South Korean businesses are keen on investing in Vietnam, especially high-tech firms such as semiconductor manufacturers. However, Vietnam's power shortage issue remains a major concern for them, causing hesitation in investment decisions.

Asserting that the approval of PDP VIII demonstrates Vietnam's strong commitment to carbon reduction, Denzel Eades, Vice Chairman of the British Chamber of Commerce in Vietnam (BritCham), stressed the importance of promptly implementing PDP VIII to align with the overarching sustainability goals.

He highlighted the need for swift action, especially concerning the development of liquefied natural gas (LNG), solar, and wind energy, along with the establishment of regulatory frameworks to facilitate implementation, such as those related to Direct Power Purchase Agreements (DPPA).

"To further support this initiative, we recommend the coordinated implementation of the Just Energy Transition Partnership (JETP) in line with PDP VIII and ensuring the readiness of specific pilot projects, especially in offshore wind energy," the BritCham representative suggested.

Meanwhile, Joseph Uddo, President of the American Chamber of Commerce in Vietnam (AmCham), suggested that the Government consider aligning Power Purchase Agreements (PPAs) with international standards to enable multilateral organizations and development partners to finance large-scale energy transition projects and renewable energy sectors.

"Current investors need more reasonable regulations to provide renewable energy. Many new investors and expansion projects require access to renewable energy to consider investing," shared Uddo.

According to the AmCham representative, key issues include the implementation of PDP VIII, the formulation of regulations on rooftop solar development, access to renewable energy in industrial parks, and guidelines for DPPA mechanisms.

"We are delighted and encouraged by the signs indicating that DPPA could be implemented by July 1 this year. AmCham members, along with investors and customers, stand ready to support the earliest possible implementation of this long-awaited program," said the President of AmCham.

Muto Shiro, Vice Chairman of the Japan Chamber of Commerce and Industry in Vietnam (JCCI),  reiterated the commitment to support the "practical" energy transition process to achieve net-zero emissions without hindering Vietnam's economic growth. He also recommended that Vietnam ensure the timely implementation of PDP VIII.

Furthermore, it is essential to establish legal frameworks and necessary implementation guidelines to create favorable conditions for power development projects. This includes regulations on large-scale offshore wind power plant projects, relaxing conditions for DPPA in renewable energy projects, and reviewing pricing mechanisms for biomass/waste-to-energy production.

Ensuring an attractive investment environment "capable of mobilizing capital" is critical to attracting long-term investment in infrastructure development. This can be achieved by amending the Investment Law and the PPP Law to enhance capital mobilization for infrastructure projects, he noted.

Regarding the recommendations of foreign business associations on  PDP VIII, Tan mentioned that the MoIT has completed the implementation plan, and the government is expected to approve the implementation plan of PDP VIII this week.

Additionally, the ministry is implementing technological solutions to harmoniously develop new energy sources and renewable energy, as well as enhance the integration of renewable energy into the power system to ensure a stable electricity supply.

Regarding PPAs, the European Chamber of Commerce (EuroCham) in Vietnam pointed out that the current versions still have many shortcomings, causing confusion for developers and operators and making them less feasible for large international projects.

There is a lack of consensus between Vietnamese and international standards to ensure quality for financial and insurance purposes. EuroCham also emphasized the need to establish regulations to directly supply energy from renewable energy projects to end-users (rather than through EVN and the power grid) through DPPA agreements between power generators and end consumers.

EuroCham proposed amending the PPAs between EVN and clean energy producers to comply with international standards and maximize the cost reduction benefits from the auctioning process, thereby proposing key terms and conditions and fully acceptable payment terms to address the concerns of international lenders.

The agency also recommended allowing electricity consumers to access clean energy by implementing DPPA in pilot programs and reducing legal barriers for clean energy plants beyond the meter.