Samsung Electronics Co. has announced that its facilities in Vietnam would enhance their eco-friendly operations by purchasing renewable energy directly through the new Direct Power Purchase Agreement (DPPA) system introduced by the Vietnamese government.
The Vietnamese government has recently issued a decree in allowing energy-intensive factories to purchase electricity from wind and solar power producers via the DPPA system. This move will assist major companies like Samsung Electronics in achieving their climate goals while easing the burden on the country’s overtaxed power grid.
The system enables companies to contract for specific amounts of renewable energy directly with private power producers, bypassing the state-run Vietnam Electricity (EVN). Foreign investors, crucial to Vietnam’s growth as a major exporter, have been advocating for this change.
With the DPPA now in place, Samsung Electronics’ Vietnam operations will be able to secure renewable energy from private sources, thereby bolstering their commitment to eco-friendly practices. The company has been collaborating with various stakeholders, including the Vietnamese government and civil society organizations, to implement the DPPA and advance its sustainability goals.
According to analysts, Vietnam’s decision responds to investors’ concerns regarding access to reliable and clean energy, which is crucial for a country emerging as a viable alternative for businesses seeking to diversify supply chains away from China.
The market liberalization is also anticipated to encourage the development of additional solar and wind farms by ensuring a stable demand for clean energy.
Samsung, Vietnam’s largest foreign investor, was one of the first to collaborate with the government to implement this new mechanism. The company plans to shift all its business operations to renewable energy by 2027. Vietnam serves as its largest mobile phone manufacturing hub, representing over half of its total production.
(Sources: The Korea Economic Daily, The Diplomat)
