Vietnam expands Direct Power Purchase Agreement to boost competitive electricity market

On 9 July 2026 the Vietnamese government issued Decree 278, amending pricing rules to give enterprises more autonomy and to move electricity prices toward market signals. The change is intended to support the ongoing reform of the electricity sector and to lay the groundwork for expanding the Direct Power Purchase Agreement (DPPA) mechanism.

Energy experts are divided on whether the DPPA should be rolled out only after the competitive market is fully operational or whether its expansion can itself accelerate market development. The state-owned power corporation EVN warns that adding retail distributors as DPPA participants could create cost‑recovery issues, grant undue benefits, and destabilise revenue streams. In contrast, the Ministry of Industry and Trade argues that widening participation to include retail units and large electricity users will increase consumer choice, align with the 2024 Electricity Law, and promote a transparent, competitive market for renewable energy.

The debate reflects broader efforts to modernise Vietnam’s power sector, improve efficiency, and integrate more renewable generation through a market‑based trading framework.