Vilasia, in collaboration with The Saigon Times, is pleased to present an in-depth article analyzing eight notable new highlights of Decree 57, comparing them with the previous provisions of Decree 80, and discussing the potential to promote a greener, freer, and more sustainable electricity market.
Below is the full article, originally published in Vietnamese in The Saigon Times on 27 March 2025. Read the Vietnamese version here.
Decree 57: A Boost for the Competitive Electricity Market?
With many important adjustments, Decree 57 has been regarded by experts as a timely “upgrade”, addressing existing shortcomings, broadening the scope of eligible participants, and enhancing flexibility within the DPPA framework. Specifically, what has changed in Decree 57? Are these changes truly a “boost” for promoting a competitive electricity market in Vietnam?
Context of Replacing Decree 80 with Decree 57
The Direct Power Purchase Agreement (DPPA) mechanism is considered a breakthrough in the clean energy sector in Vietnam. For the first time, under Decree No. 80/2024/ND-CP, large electricity consumers were allowed to enter direct contracts with renewable energy producers, rather than relying entirely on Vietnam Electricity Group (EVN). Upon its issuance, Decree 80 was expected to trigger a new wave of investment, encourage the development of renewable energy sources, and pave the way for a competitive and transparent electricity market.
However, implementation in practice revealed various challenges. After nearly nine months in effect, Decree 80 was swiftly replaced by Decree No. 57/2025/ND-CP.
This article will analyze eight notable new provisions under Decree 57, compare them to the previous regulations under Decree 80, and explore their potential to promote a greener, freer, and more sustainable electricity market.
Comparison between Decree 80 and Decree 57: Key Changes
| Content |
Decree 80 (Old) |
Decree 57 (New) |
Significance |
| Cap on direct electricity price |
No price cap; price negotiated freely between buyer and seller |
The price must not exceed the maximum rate set within the pricing framework for the corresponding energy source type |
Prevents ‘price inflation’, enables businesses to forecast price ceilings, increases transparency and protects both investors and large consumers |
| Removal of 200,000 kWh/month threshold, allowing greater participation via national grid |
Large consumers must average 200,000 kWh/month, connected at ≥ 22kV, for production purposes only |
Removes rigid consumption threshold; Minister of Industry and Trade has authority to adjust criteria flexibly; EV charging businesses may also participate |
Expands DPPA access, attracts more businesses (including SMEs), supports EV infrastructure, and contributes to green transport development |
| Flexibility in defining “large electricity consumer” |
Defined solely by 200,000 kWh/month criterion |
Minister of Industry and Trade may adjust criteria based on actual market conditions |
Aligns with grid development needs, reduces regulatory barriers, increases policy flexibility |
| Inclusion of biomass energy |
Only wind and solar power allowed under DPPA |
Biomass officially included as eligible renewable source under DPPA |
Diversifies renewable sources, utilizes agricultural by-products, reduces pollution, and enhances energy security |
| Inclusion of Power Companies in DPPA |
Role of local power companies not clearly defined |
Electricity Companies (subsidiaries or affiliates of EVN) are allowed to participate in DPPA |
Increases number of electricity suppliers, offers businesses more choices, and addresses previous market limitations |
| Recognition of rooftop solar as private grid |
Unclear whether rooftop solar counts as a private grid. |
Officially confirms rooftop solar systems qualify as private grid for DPPA |
Enables rooftop solar investors to use power for self-consumption and sell directly to other customers, increasing renewable adoption |
| Surplus rooftop solar power sales mechanism |
No specific provision |
Allows sales to EVN (max 20% of output, at previous year’s average price) or to electricity retail units in zones/clusters, capped at ground-mounted solar price |
Provides income for rooftop solar owners, reduces energy waste, and boosts decentralized energy market |
| Annual balancing cost adjustment |
Balancing costs calculated monthly |
Balancing cost adjustment changed to annual basis, reducing admin burden |
Simplifies procedures, helps businesses and generators manage cash flow more effectively |
Key Considerations When Applying Decree 57
In addition to the regulatory changes introduced, businesses aiming to maximize the benefits of the DPPA mechanism must closely follow implementation guidance issued by the Ministry of Industry and Trade. The removal of the 200,000 kWh/month consumption threshold opens the door for broader participation, but it also requires companies to promptly assess their eligibility and readiness to join.
For enterprises located in industrial zones, it is essential to review or revise existing power purchase agreements with current electricity providers to avoid any contractual conflicts. Businesses interested in rooftop solar systems should carefully evaluate installation costs, maintenance requirements, and potential returns from selling excess electricity.
The transition from monthly to annual balancing under Decree 57 may also pose financial challenges. While it simplifies administrative procedures, it could temporarily impact cash flow. Therefore, adequate financial planning and forecasting are critical.
Additionally, businesses are encouraged to draw lessons from countries with mature DPPA frameworks such as the United States, Australia, or those in Europe, where DPPA contracts are typically structured to optimize cost efficiency and manage price risks. Seeking support from international organizations like USAID, GIZ, or the Asian Development Bank (ADB) can also help strengthen negotiation capacity and improve clean energy procurement strategies.
Outlook for the Renewable Energy Market and Drivers of Economic Greening
Decree 57 is widely regarded as a major advancement over Decree 80, particularly in its expanded scope, greater flexibility in eligible participants, and the introduction of price caps. Vietnam’s renewable electricity market has long held significant potential but has been hampered by legal barriers and limitations in grid infrastructure. Now, with a more refined DPPA mechanism, a growing number of clean energy projects may finally take off – serving as a strong catalyst for accelerating the transition toward a greener economy.
Promoting a Green Supply Chain
Large electricity-consuming industries such as textiles, footwear, and electronics manufacturing can leverage the DPPA mechanism to source renewable energy and meet ESG (Environmental, Social, and Governance) standards increasingly required by multinational corporations. As international customers place greater emphasis on carbon emissions, participation in DPPA allows businesses to maintain their export market share and enhance their reputation in the global marketplace.
Enhancing Energy Security
Allowing a wider range of renewable energy sources to participate in the DPPA mechanism will help Vietnam reduce its reliance on fossil fuel-based electricity and electricity imports. Additionally, the diversity of renewable energy types such as wind, solar, and biomass contributes to risk diversification and enhances the stability of the power system.
Laying the Foundation for a Vietnam Retail Electricity Market
With the participation of local power companies and private producers in the DPPA framework, the electricity market will become more competitive, offering businesses more choices in sourcing electricity. In the long term, transparent competition is expected to drive investment in transmission infrastructure and encourage the adoption of advanced technologies such as smart grids and remote metering systems.
Conclusion
Decree 57 has addressed the shortcomings of Decree 80 and established a stronger foundation for a competitive electricity market in Vietnam. Key improvements – such as implementing electricity price caps, expanding eligible participants, including biomass energy, creating mechanisms for rooftop solar, and simplifying the balancing process – represent significant progress.
If implemented effectively and supported by continued regulatory flexibility, the DPPA mechanism will not only help businesses reduce energy costs and stabilize long-term financial planning, but also enhance their competitive advantage, drive the green economy, and bring Vietnam closer to achieving its net-zero emissions target by 2050. Now is the time for businesses to proactively seize the opportunity to participate in the renewable electricity market and capitalize on the strategic advantages offered by Decree 57.
