Samsung Executes Vietnam’s First Grid DPPA: 70 GWh Solar Deal Sets Supply Chain Template

Samsung Electronics' largest smartphone factory in Vietnam began receiving solar power under the country's first-ever grid-connected direct power purchase agreement on June 1, giving every multinational manufacturer operating in the country a working template for clean-energy procurement under a regulatory framework that has been years in the making.

The agreement was executed between Samsung Electronics Vietnam Thai Nguyen — Samsung's Thai Nguyen factory, which produces more than half of the company's global smartphone output — and TTC Duc Hue–Long An Power, the developer behind the Duc Hue 2 solar plant in Tay Ninh province. Under the deal, the Thai Nguyen facility will receive approximately 70 gigawatt-hours of solar electricity each year, equivalent to the annual power consumption of roughly 17,000 Vietnamese households. That volume is projected to cut carbon-dioxide emissions by more than 46,000 tonnes annually, according to figures aggregated from Vietnam Electricity and the country's General Statistics Office.

The deal is the first actual transaction under Vietnam's DPPA scheme, confirmed by the National System and Market Operator, which certified that both parties completed all required technical and legal procedures before supply commenced. The Duc Hue 2 plant — a 49-megawatt-peak solar facility that also incorporates a battery energy storage system — achieved commercial operation on May 19 and joined Vietnam's competitive wholesale electricity market before the DPPA supply contract took effect.

Vietnam's DPPA Framework: What Changed and Why It Took Years

The mechanism that made this deal possible dates to 2019, when Samsung and a coalition of multinationals first began pressing the Vietnamese government to let large industrial users buy renewable power directly from private generators — bypassing the state utility, Vietnam Electricity, which had held a monopoly over power purchasing. Samsung has cited 2019 as the year those advocacy efforts began and provided technical advice to Vietnamese authorities throughout the drafting process.

After seven years of drafting — including fifteen iterations of the regulation — Vietnam issued its first DPPA decree in July 2024. That framework was quickly found to be too restrictive: its eligibility criteria excluded most potential participants and its pricing rules created legal uncertainty. The government replaced it after only eight months with Decree 57/2025, issued on March 3, 2025, which took immediate effect and introduced more flexible eligibility thresholds, clearer pricing rules, and a broader list of qualifying renewable sources including biomass and electric-vehicle charging operations. The decree also established the legal basis for both grid-connected and private-line DPPA models.

The grid-connected model used in the Samsung deal — formally a virtual or synthetic DPPA — allows a buyer and a renewable generator located anywhere in the country to trade power through Vietnam Electricity's national transmission network under a bilateral agreement, rather than requiring a dedicated private cable between the two sites. The seller, TTC Duc Hue 2, sits in Tay Ninh province in southern Vietnam. The buyer, Samsung's Thai Nguyen factory, is located in the north, roughly 60 kilometers from Hanoi.

Schneider Electric served as Samsung's energy consultant throughout the negotiations, confirming the deal's viability as a repeatable commercial structure rather than a one-off arrangement tailored to Samsung's scale.

How Samsung's Thai Nguyen Factory Fits Its Global Renewables Push

Samsung has committed to sourcing 100% of its electricity from renewable sources across all global operations as part of a broader goal of carbon neutrality by 2050. Vietnam is central to that target: the company has invested more than $23 billion in the country cumulatively, operates six manufacturing facilities and a research center, and produces more than half of its global smartphones there for distribution to 128 countries.

Before this agreement, Samsung's Vietnamese facilities relied primarily on unbundled renewable energy certificates — instruments that represent ownership of renewable electricity without a physical supply connection — and on rooftop solar panels installed at two other campuses. The Thai Nguyen DPPA replaces that approach with a direct, metered solar supply for what is the company's largest single production base.

Na Ki-hong, General Director of Samsung Vietnam, stated that the agreement is intended to support the development of Vietnam's renewable energy market while contributing to global climate action. Both the Samsung Electronics Vietnam facility in Bac Ninh and the Samsung Electronics Ho Chi Minh City CE Complex are now separately pursuing their own DPPA supply contracts, with rooftop solar already installed at both sites.

What Vietnam's DPPA Means for Other Multinationals

The deal's significance extends well beyond Samsung. The Institute for Energy Economics and Financial Analysis has identified Vietnam's DPPA mechanism as a means of significantly increasing private renewable energy supply without placing additional burden on the state budget. The World Resources Institute has described the scheme as Vietnam's first structural break from a state-monopoly power market.

Vietnam's manufacturing base has long attracted global brands partly because of lower production costs, but those brands — including Apple, Google, Nike, Lego, and Intel, all of which have 100% renewable electricity commitments under RE100 — have faced a structural obstacle: Vietnam Electricity's monopoly made it impossible to source renewable power at industrial scale through a direct contract. The DPPA scheme removes that obstacle for any facility consuming at least 200,000 kilowatt-hours per month on average.

That threshold remains a sticking point for smaller manufacturers. Belgium-based industrial zone developer Deep C raised concerns with Vietnam's Ministry of Industry and Trade earlier this year that small and medium-sized enterprises with genuine renewable energy demand cannot meet the consumption floor, leaving them locked out of the mechanism even as their international customers press them to decarbonize. The ministry is considering amendments to Decree 57 that could address this gap.

Does the DPPA Cost Suppliers More?

Not necessarily — and for RE100-committed manufacturers, the pricing structure matters. Bloomberg New Energy Finance data shows that new solar is currently the most cost-effective bulk generation source in Vietnam. The surcharges associated with grid-connected DPPAs — the fees Vietnam Electricity charges to route renewable electricity through the national transmission network — ranged from $8.60 to $24.90 per megawatt-hour in recently disclosed figures. Whether the total landed cost of renewable electricity via DPPA is higher or lower than conventional grid tariffs depends on site-specific consumption patterns and negotiated terms, but the mechanism at minimum gives large manufacturers a credible pricing structure to evaluate.

Vietnam's renewable energy sector carries a caution that prospective DPPA participants should understand. The country's previous feed-in tariff program — which drove a rapid expansion of solar and wind capacity between 2017 and 2021 — is now subject to a government-initiated retroactive subsidy clawback affecting 173 projects with a combined investment of roughly $13 billion. That dispute signals that Vietnam's energy policy environment can shift in ways that create legal risk for projects that were compliant at the time they were built. Decree 57 itself contains anti-misuse provisions authorizing the Ministry of Industry and Trade to suspend or terminate a DPPA if it determines a participant has exploited the mechanism — language that legal analysts note remains loosely defined.

Frequently Asked Questions

What is Vietnam's direct power purchase agreement (DPPA)?

A direct power purchase agreement under Vietnam's Decree 57/2025 allows large electricity users — those consuming at least 200,000 kilowatt-hours per month on average — to buy renewable power directly from private generators through the national grid, bypassing the state utility Vietnam Electricity. The framework creates a bilateral contract between buyer and seller while Vietnam Electricity handles physical transmission.

How does Samsung get renewable energy at its Vietnam factories?

Samsung's Thai Nguyen factory now receives solar electricity under a grid-connected DPPA signed with TTC Duc Hue–Long An Power, sourcing about 70 gigawatt-hours per year from the Duc Hue 2 solar plant in Tay Ninh province. Two other Samsung Vietnam sites in Bac Ninh and Ho Chi Minh City use rooftop solar and are pursuing their own DPPA supply contracts.

Can small businesses in Vietnam use the DPPA?

Under current rules, no. Decree 57/2025 sets a minimum consumption threshold of 200,000 kilowatt-hours per month, which excludes most small and medium-sized enterprises. Industrial zone developer Deep C has formally flagged this gap to Vietnam's Ministry of Industry and Trade, arguing that smaller suppliers to global brands also need a path to renewable power to meet international sustainability standards.

What is RE100 and which companies in Vietnam follow it?

RE100 is a global initiative through which companies commit to sourcing 100% of their electricity from renewables. Among its members with significant Vietnam manufacturing operations are Samsung, Apple, Nike, Lego, Intel, and Google. The DPPA scheme gives RE100-committed manufacturers in Vietnam their first practical route to fulfilling that commitment through a direct, large-scale renewable supply contract.