Scenario: a foreign factory’s power bill is its second-largest operating cost, and its European customers demand green electricity certificates. Since 2025, Vietnam’s direct power purchase agreement (DPPA) mechanism lets large consumers buy renewable power directly from generators. Here’s how the two models work.
The two models: national grid vs. private line
Decree 57/2025 (as amended by Decree 243/2026 of June 26, 2026) establishes two DPPA models. Under the national-grid model, the customer buys renewable power through the grid with a minimum consumption threshold of 200,000 kWh per month. Under the private-line model — a direct connection between generator and customer — the threshold is 20,000 kWh per month. The grid model suits large factories; the private-line model suits industrial parks and clusters where a generator sits nearby.
Eligibility and contracting
Participation requires meeting the consumption threshold and signing a power purchase contract with the renewable generator under the mechanism’s template terms. The customer continues to pay grid-related charges where it uses the national grid; the renewable energy component is settled directly with the generator. Verify the current threshold and contract template before committing — the 2026 amendment adjusted the framework.
Benefits and costs
The benefits are threefold: access to renewable power with traceable origin (supporting ESG reporting and customer requirements), potential long-term price stability through fixed-price contracts, and reduced exposure to grid power price adjustments. The costs include the consumption threshold (smaller factories may not qualify), contract complexity, and the risk that renewable generation profiles don’t match the factory’s load curve — requiring grid backup.
Legal watch-outs
Key contract points: price adjustment mechanisms, take-or-pay obligations, contract duration and exit terms, and allocation of grid charges. Because the framework was amended in 2026, confirm which decree version governs your contract and whether transitional provisions apply to projects signed under the original Decree 57/2025. Have counsel review the PPA before signing — the thresholds and templates are regulatory, not negotiable.
Practical tip: start the DPPA conversation with your industrial park — parks increasingly aggregate demand from multiple tenants to meet the consumption threshold collectively, or host a renewable generator on adjacent land for the private-line model. The park management board can also advise which model neighboring factories chose and why, saving months of independent research.
Frequently asked questions
1. What are the two DPPA models?
National grid (≥200,000 kWh/month) and private direct line (≥20,000 kWh/month).
2. Which legal documents govern?
Decree 57/2025, amended by Decree 243/2026 (June 26, 2026).
3. Who qualifies?
Consumers meeting the monthly consumption thresholds with a contracted renewable generator.
4. Main benefit for FDI factories?
Traceable renewable power for ESG compliance and potential price stability.
5. Key contract risks?
Take-or-pay terms, price adjustment, exit provisions and grid-charge allocation.
This article has been quality-reviewed by the FLAW AI Legal Council
