USAID V-LEEP II Technical Report: VRE and Wholesale Electric Power Markets

The report aims to support the Electricity Regulatory Authority of Vietnam (ERAV) in its consideration of how existing and future solar and wind power plants can be integrated into the Vietnam Wholesale Electricity Market (VWEM), particularly in the context of the Direct Power Purchase Agreement (DPPA) pilot program. The report reviews several international wholesale electric power markets, including the PJM, CAISO, and Nord Pool markets, to identify best practices for incorporating VRE resources. The analysis highlights the importance of market design and regulation in facilitating or hindering power system flexibility, which is critical for the reliable and economic integration of VRE resources. The report notes that bilateral contracts and power purchase agreements (PPAs) between generators and buyers have long played a role in wholesale electric power markets. However, the increasing demand for clean electricity options is driving a global increase in virtual PPAs between corporate purchasers and renewable energy (RE) generators. The report identifies several key market characteristics that are relevant to the integration of VRE resources, including bidding, load forecasting, scheduling, and dispatch. The analysis also highlights the importance of nodal pricing, market clearing, and financial settlement in ensuring the reliable and economic operation of wholesale electric power markets. The report provides a detailed overview of the market characteristics of several international wholesale electric power markets, including the PJM, CAISO, and Nord Pool markets. The analysis includes tables and figures that provide a comprehensive understanding of the market characteristics and best practices for incorporating VRE resources. The report concludes that the design and regulation of electric power markets can facilitate or hinder power system flexibility, which is key to the reliable and economic integration of VRE resources. The report recommends that Vietnam update its power market rules to account for the rapid deployment of VRE resources and to ensure the reliable and economic operation of the VWEM. The report also highlights the importance of market design and regulation in facilitating or hindering power system flexibility, which is critical for the reliable and economic integration of VRE resources. The report recommends that Vietnam adopt a market design that prioritizes flexibility and reliability, and that incorporates best practices from international wholesale electric power markets. The report provides a comprehensive analysis of the market characteristics and best practices for incorporating VRE resources into wholesale electric power markets. The report is intended to support the ERAV in its consideration of how existing and future solar and wind power plants can be integrated into the VWEM, particularly in the context of the DPPA pilot program. The report's recommendations are based on a thorough analysis of international wholesale electric power markets and the best practices for incorporating VRE resources. The report provides a comprehensive understanding of the market characteristics and best practices for incorporating VRE resources, and is intended to support the ERAV in its consideration of how to integrate VRE resources into the VWEM.