Image source: MoIT

In a draft decree guiding the amended Electricity Law on the direct power purchase agreement (DPPA) sent to the Ministry of Justice for appraisal on January 9, the Ministry of Industry and Trade (MoIT) proposed the inclusion of biomass electricity projects in the DPPA mechanism. Similar to wind and solar power, biomass power plants need a capacity of 10MW or more to be connected to the national grid and directly participate in the competitive wholesale market.

Biomass electricity is a form of renewable energy produced by organic waste (crops, forests, organic waste, agricultural waste) to generate electricity. Currently, there are nine biomass power plants of over 10MW in operation, with a total capacity of about 332MW, according to the MoIT's Electricity Regulatory Authority. By 2030, 14 more biomass power plants are expected to be put into operation, adding about 300MW to the power system.

"Allowing biomass power to apply DPPA will contribute to diversifying renewable energy sources. It will also encourage the application of new, more efficient technologies in the production of electricity from biomass, as well as adding clean and sustainable energy solutions in the long term," the MoIT explained in its report. "In addition, biomass power plants are stable and integrate well into the grid," the report stated. "Using this type of energy also creates opportunities for the development of small and medium-sized enterprises, and jobs for local people in collecting, processing raw materials and operating the plant."

Regarding buyers, similar to previous drafts, the MoIT maintains that manufacturers that use large amounts of electricity can participate in DPPA. These businesses must have an average consumption of 200,000kWh per month.

Decree No.80/2024/ND-CP, issued by the government last year, allows wind and solar power projects with a capacity of over 10MW to participate in direct electricity trading through the national grid.