In a draft decree submitted to the Ministry of Justice for review on January 9, the Ministry of Industry and Trade (MoIT) proposed the inclusion of biomass electricity projects in the direct power purchase agreement (DPPA) mechanism, which currently applies to wind and solar power. The proposal suggests that biomass power plants with a capacity of 10 MW or more should be eligible to connect to the national grid and directly engage in the competitive wholesale market.
Biomass electricity is produced from organic materials such as crops, forests, and agricultural waste. As of now, there are nine biomass power plants with a combined capacity of around 332 MW in operation. By 2030, the MoIT expects an additional 14 biomass power plants, contributing approximately 300 MW to the power grid.
The MoIT explained that allowing biomass power to participate in the DPPA would help diversify renewable energy sources and encourage the use of more efficient technologies in biomass electricity generation. The report also highlighted that biomass power plants are stable and integrate well with the grid. Furthermore, the use of biomass energy could foster the development of small and medium-sized businesses and create jobs for local communities in areas such as raw material collection and plant operation.
As in previous drafts, the MoIT proposed that businesses with large electricity consumption, specifically those using an average of 200,000 kWh per month, would be eligible to participate in the DPPA.
Last year, the government issued Decree No. 80/2024/ND-CP, which permits wind and solar power projects with a capacity of over 10 MW to engage in direct electricity trading through the national grid.
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