GIZ Energy Support Programme

Final Consultation Workshop on Legal Framework’s Assessment and Recommendation for Smart Grid Application to Promote Renewable Energies and Energy Efficiency in Viet Nam


Press Release

Final Consultation Workshop on  

Legal Framework’s Assessment and Recommendation for Smart Grid Application to Promote Renewable Energies and Energy Efficiency in Viet Nam

21 November 2019 – Today, the Electricity Regulatory Authority of Viet Nam (ERAV), Ministry of Industry and Trade, in collaboration with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH held a consultation workshop on “Assessment and Recommendation of Legal Framework for Application of Smart Grid to Develop Renewable Energy Sources and Promote Energy Efficiency in Viet Nam”.

The event was attended by representatives of relevant ministries, agencies, Viet Nam Electricity (EVN) and its member companies, international development partners, local university lecturers, private investors, national and international experts. The workshop was part of the bilateral technical cooperation “Smart Grids for Renewable Energy and Energy Efficiency” Project between the Governments of Viet Nam and Germany.

Opening the workshop, Mr. Tran Tue Quang – ERAV Deputy Director – said, “To promote the implementation of Decision No. 1670/GQ-TTg on the development of intelligent power grids in Viet Nam, approved by the Prime Minister on 8 November 2012, ERAV, with the support and coordination of GIZ and international consultants, studied and proposed important revisions to the legal framework, which will be amended in the coming time. At this event, we expect to receive ideas, comments, and suggestions from technical experts as well as consultants, to evaluate and propose a suitable legal framework for the actual development of Viet Nam’s smart grid and electricity system.”

On behalf of GIZ, Mr. Tobias Cossen – Project Director – said, “Viet Nam’s electricity system is facing technical and financial challenges as we have seen the country’s rapid development of renewable energy sources in the past year and its ambitious plan until 2030, especially the power sources using wind and solar energy which rely on weather conditions. Therefore, it is necessary to timely develop appropriate legal provisions to enable the high-rate integration of power sources using renewable energy, without affecting the reliability of electricity supply and the quality of the electricity system, as well as to minimize the effect on the average electricity price of the whole system.”

At the workshop, a team of international consultants presented the results of the study and assessment of Viet Nam’s current legal framework, provided best international practices and proposed an important legal framework for the application of smart grid. Gaps were found in regulations on integration of renewable energy sources; regulations to implement smart energy technologies; and technical standards for smart energy technology, technical regulations and grid connection standards.

Based on the assessment, the consultants pointed out that Viet Nam has a clear policy to promote renewable energy development with specific goals and strategies. The government has issued a clear mechanism to encourage renewable energy development through an attractive FIT pricing mechanism with long-term Power Purchase Agreements (PPAs) and subsidies on related taxes to facilitate the mobilization of funds for renewable energy projects.  

However, a policy of promoting renewable energy on the part of electricity users has not been given due attention. PPAs, which are currently limited to signing with only one buyer-EVN, and Direct Power Purchase Agreements (DPPAs), which allow power plants to sell renewable-based generated electricity directly to large power consumers, are just at the planning stage of pilot implementation. Also, the approval of a large proportion of renewable energy sources mainly focuses on certain territories and is not synchronized with the current situation and progress of investment in electricity transmission grids while the existing FIT pricing mechanism does not reflect the market price signal.

The consultants made some key recommendations, including attractive financial mechanisms to attract renewable energy power plants to participate in the energy balance and ancillary service market; specific regulations and mechanisms to control grid congestion, limiting curtailment of renewable energy sources in line with the trend of integrating high proportion of renewable energy; as well as regulations and mechanisms to encourage the installation of an energy storage system and to allow the participation of auxiliary service providers to increase the flexibility and reliability of the electricity system. Other suggestions are appropriate financial mechanisms to implement the Demand Response Programme (DR) and attractive financial regulations and mechanisms to enable the realization of the virtual power plant (VPP) model.

Following the presentations was an open discussion among the delegates to gather feedback on assessments and recommendations on the legal framework for the smart grid application in Viet Nam. The consultants will then make the final recommendations which are most suitable for the application in the country.