DECISION

APPROVAL OF THE NATIONAL PROGRAM FOR DEMAND SIDE MANAGEMENT FOR THE 2018 – 2020 PERIOD WITH VISION TOWARDS 2030

THE PRIME MINISTER

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Electricity dated December 3, 2004 and the Law on Amendment to certain Articles of the Law on Electricity dated November 20, 2012;

Pursuant to the Government’s Decree No. 137/2013/ND-CP dated October 21, 2013 elaborating on the implementation of certain articles of the Law on Electricity and the Law on Amendment to certain Articles of the Law on Electricity;

At the request of the Minister of Industry and Trade,

HEREBY DECIDES

Article 1. Approving the National Program for Demand Side Management for the 2018 – 2020 period with vision towards 2030 (hereinafter referred to as national DSM program), including the followings:

1. Objectives of the National DSM Program

a) Overall objectives:

- Uniformly apply engineering, technological and socio-economic solutions to the implementation of demand side management programs with the active participation of the users playing an important part in contributing to ensuring the power supply, raising the quality of electric energy and electricity service reliability, contributing to the environmental protection and socio-economic development, and promoting the overall economic efficiency of the power system in association with the sustainable development of the electricity and energy sector.

- Implement the national DSM program in line with the developmental trends of the energy sector, the electricity sector and the national electricity development planning, ensuring the optimization of all social resources, efficiency and benefits for consumers and electric utilities in the process chain from power generation, transmission, distribution, sale and use.

- Reduce the peak load capacity of the national electric system and the electric systems of geographical areas or regions in order to lower the needs for investment capital for construction and expansion of the electric system, contribute to a reduction in the power price hike pressure and the reasonable exploitation of energy resources and the sustainable development.

- Raise awareness of the users and the entire society for the demand side management and the effective use; gradually transform from traditional users to smart users.

b) Specific objectives:

- Strive to reduce the peak load capacity of the national power system (compared with the forecast of the load demand specified in the national power development plan) to about 300 MW by 2020, 1,000 MW by 2025 and 2,000 MW by 2030 through the implementation of the national DSM program.

- Increase the load factor of the national electric system (K_pt) from 1%÷2% for the 2018 – 2020 period and 3%÷4% for the entire period from 2021 to 2030.

- Completely formulate and call for the competent authority's consideration, approval and promulgation of a uniform and adequate number of relevant regulations, especially appropriate regulatory policies, financial policies and incentive policies, in order to provide a legal framework for the implementation of the national DSM program for the period of 2018 - 2020.

- Conduct the ongoing research into and strengthen the implementation of the DSM programs have already been implemented effectively in the period 2007 – 2015, such as the Time-of-Use (TOU) meters program and other communications and awareness-raising programs.

- Gradually expand the group of users participating in the national DSM program to cover the domestic users; combine the implementation of the DSM programs with provision of incentives or subsidies in order for the users to invest in the installation of power-generating solar rooftop panels.

- Combine and implement in conjunction with the programs on the economical and effective use of electric energy, the roadmap for smart grid development in Vietnam and the orientation towards the development of forms of renewable energy sources to ensure the optimal use of the potentials of the DSM programs and achieve the highest efficiency.

- Develop a specific and appropriate roadmap for the implementation of the new DSM programs within the scope of the national DSM program, especially the Demand Response (DR) program with the objective of involving a lot of users nationwide in the implementation of that program after 2020.

- Implement experimental, medium-term and long-term DSM programs as well as the national campaigns for raising awareness of DSM programs.

2. Main tasks to be performed in the national DSM program

The national DSM program shall be implemented according to the particular roadmap and specific stages in order to ensure conformity with the conditions, institutions and policies of the Vietnam's electricity industry. The following main groups of tasks shall be stressed:

a) The 1^st group of tasks: Comprehensive formulation and completion of the legal framework for implementation of the national DSM program

Develop, complete and promulgate the comprehensive legal framework for the implementation of the national DSM program, especially regulatory, financial and incentive policies for encouraging users and power utilities to participate in the implementation of the DSM programs, including the following main tasks:

- Develop, complete and promulgate regulations related to the fundamental legal frameworks for the implementation of the national DSM program, regulations on responsibilities of relevant entities and approaches to organizing the implementation of the national DSM program.

- Develop, complete and promulgate regulations regarding overall and specific regulatory, financial and incentive policies for the implementation of the national DSM program; regulations on management and supervision of the implementation of regulatory, financial and incentive policies.

- Develop, complete and promulgate regulations to provide specific guidance on the tasks, processes of the implementation, supervise and assess the implementation of the DSM program, especially DR programs.

- Research and develop regulations on the TOU electricity price mechanism (TOU) that can be applied to specific customer groups, geographical regions, areas and seasons; expand the subjects of application of the power price mechanism over time to cover the domestic users.

- Research and develop legislative regulations to establish DSM entities and operators, such as service providers and DSM/DR aggregators.

- Review, amend and supplement regulations currently in force so as to ensure that DSM programs will be implemented in a uniform, consistent, effective and feasible manner.

b) The 2^nd group of tasks:: Strengthening of programs and activities designed to raise the awareness of the society, users and electric utilities for the national DSM program

- Consistently develop and implement propaganda and educational programs in the community or training institutions with regard to the objectives and benefits of the DSM programs and the national DSM program.

- Uniformly use appropriate information and communication means to raise awareness for the population, users and electric utilities.

- Build a cooperation between the Ministry of Industry and Trade and the Ministry of Education and Training Design in designing training materials on the objectives and benefits of the DSM programs and the national DSM program in order for training and educational institutions to use as references in their educational programs, and in order to ensure that these materials are suitable for different training levels.

- Build the cooperation between the Ministry of Industry and Trade and the Ministry of Information and Communications in implementing communications programs to raise the awareness of the contents of the national DSM program, benefits and implementation approaches for the society, users and electric utilities.

- Continue the widespread implementation of the awareness enhancement programs that have been successfully implemented in the period 2007 – 2015, such as the communications program for promotion of the use of solar water heaters, the communications program for promotion of the use of compact led lights; continue the implementation of the new programs such as the program for encouragement of the use of air conditioners powered by new technologies, high efficiency and less power consumption. Integrate the enhancement of the awareness of DSM programs for the society and users with communications activities of the programs for economical use of electricity of which the implementation shall be presided over by competent authorities and electric utilities.

- Integrate the programs for enhancement of the awareness for the society and users during the process of establishing and performing tasks in the national DSM program and each DSM program.

c) The 3^rd group of tasks: Implementation of the DSM programs and DR program

In order to ensure the feasibility, efficiency and alignment with the power industry structure, the conditions of the Vietnam’s power system and the involvement of the users, organize the design of the roadmap and plan of detailed actions with particular emphasis on the followings:

- Strengthen electricity load researches, raise the capacity for forecasting the load demand of electricity corporations, electricity companies and other affiliates concerned.

- Carry out the assessment of the potentials, needs and designs of DSM programs to check whether they are suitable for each area, user and electric utility, and carry out the assessment of incentive policies and other support resources. DSM programs that have been designed and implemented must be aimed at convincing the users to voluntarily and proactively participate in these programs.

- For DSM programs successfully implemented in the 2007-2015 period (such as the TOU program, communications and public awareness enhancement program), continue the widespread implementation and supplementary design of approaches and mechanisms tailor-made for specific customer groups, regions and seasons, and expand the scope of participants to cover the domestic users.

- For DR programs, it shall be necessary to develop an appropriate roadmap and plan in line with the regulatory policies and conditions of the Vietnam’s power system, specifically as follows:

+ Build and promulgate the roadmap and plan that last for 2030 with DR programs which will become key ones in the national DSM program.

+ Expand the experimental implementation for assessment of the potentials and demands, and define the programs appropriate for specific regions, areas and users before the widespread implementation of these programs across the nation.

+ Gradually organize the official implementation of the programs from 2018 where appropriate for the currently applicable regulatory and incentive policies and the actual conditions of the power system, including the programs implemented according to the directly financial support policies, the programs implemented according to the electricity price mechanisms, the DR programs implemented according to the non-trade incentive policies and those programs voluntarily taken part in by the users.

- DSM programs which are designed and implemented should be in sync with the Vietnam’s smart grid development roadmap approved by the Prime Minister in the Decision No. 1670/QD-TTg dated November 8, 2012, ensure the optimal use of modern technology infrastructure, especially the installation of the Automatic Meter Reading (AMR) and the Advanced Metering Infrastructure (AMI) system.

- Closely combine the national DSM program with the programs for the economical and effective use of energy, clearly defining objectives, purposes, scope and manners to ensure the most effective implementation of these programs.

- Conduct the annual inspection, supervision and assessment of the implementation results. In these activities, define objectives, provide specific indicators of which the assessment of the implementation results serves as the indicator showing the business performance of electric utilities.

3. Solutions

In order to implement the national DSM program to achieve the defined objectives and bring high efficiency, it shall be necessary to focus on implementing the following key solutions:

a) Financial solutions

- Completely and uniformly develop and promulgate financial policies and incentive policies granted to the users and electric utilities to implement DSM programs with a view to allowing for expenditures on encouraging the users to participate in DSM/DR programs as reasonable ones accounted for as electricity generation and business costs of electric utilities.

- Implementation of financial policies for encouraging the implementation of the national DSM program must be strictly managed and supervised by the Ministry of Industry and Trade, and the Ministry of Finance.

- Make best use of other resources, such as the state budget revenues (if necessary), other legal and financial sources from domestic and foreign organizations and individuals for the implementation of the national DSM program:

+ Incorporate the programs and schemes for experimental or official cooperation with international DSM organizations which are underway and are coming into existence as a component of the national DSM program, in particular the short-term DSM programs or the public awareness enhancement programs;;

+ Expand the international cooperation in the scope of the program, mobilize and make best use of financial grants or aids from organizations or individuals in order to reduce the state budget spending.

- Use funding sources contributed by electric utilities and enterprises:

+ Encourage electric utilities such as the Electricity Corporation of Vietnam, electricity incorporations and electricity companies to take initiative in implementing the DSM programs; utilize and combine scientific and technological development funds and investment capital sources of the programs for the economical and efficient use of energy for the implementation of the national DSM program.

+ Encourage electric utilities and users to take initiative in allocating capital sources for investment in the development of infrastructure, information technology systems and energy management systems within their ambit to assist in the optimal and effective implementation of the DSM programs.

b) Investment, competency and awareness enhancement training solutions

- Ministries, sectoral administrations, local authorities, mass organizations, socio-political organizations and electric utilities shall be responsible for implementing and participating in communications and awareness enhancement activities for the implementation of the national DSM program.

- Invest in training and enhancement of competency of officers, especially those working for entities managing and implementing DSM programs.

- Focus on implementing the communications, propaganda and awareness education or enhancement programs regarding DSM programs for the public.

c) Scientific and technological solutions

- Step by step providing electric utilities and users with modern infrastructure systems, such as the AMR and AMI systems, power-generating solar rooftop panel systems and integrated energy storage systems to optimize the users’ participation in the implementation of the DSM/DR programs.

- Scientific and technological solutions for the implementation of the DSM programs should be in sync with and in line with the development of the smart grid in Vietnam; should be coordinated and integrated with the state-level key programs regarding "Research into the application and development of energy technologies" in order to optimally tap the potentials of the DSM programs.

d) International cooperation solutions

- Promote international cooperation, make the best of grants or aids from international financial institutions for implementation of technical assistance projects and experimental programs in order to develop and fully complete the legal framework for DSM Program in Vietnam.

- Strengthen international cooperation in the field of training and enhancement of the capacity of the officers working in the field of demand side management and consulting organizations through making direct investments, holding and participating in scientific workshops, sending the officers to study abroad, sending field trip delegations abroad, and providing the construction consultancy services for construction of accredited laboratories.

- Cooperate in developing relevant policies, institutions and standards for implementation of the national DSM program.

Article 2. Implementation organization

1. The Ministry of Industry and Trade shall be assigned to the following tasks:

a) Preside over and play a pivotal role in the formulation and implementation of the national DSM program in order to accomplish the approved objectives, tasks and plans.

b) Supplement the functions and tasks of the Steering Committee for development of the Vietnam’s smart grid (hereinafter referred to as the Steering Committee) with the functions and tasks of management and implementation of the national DSM program. The Steering Committee shall be responsible for developing and finalizing the legal framework, implementing and monitoring the implementation of the national DSM program, and defining specific objectives over periods and those of each DSM program.

c) In the period from 2018 to 2020, preside over and collaborate with the concerned Ministries and sectoral administrations in researching, developing and completely promulgating the legal framework, especially financial and incentive policies for promotion of the implementation of the national DSM program in compliance with the provisions of Article 10 of the Government's Decree No. 137/2013/ND-CP dated October 21, 2013 elaborating on the implementation of a number of articles of the Electricity Law and the Law on amendment and supplement to the Electricity Law, and where necessary, report to the Prime Minister on the tasks beyond its jurisdiction.

d) Preside over and collaborate with the Ministry of Finance in researching, developing and promulgating the financial and incentive policies in line with the financial solutions approved under this Decision in order to support the implementation of the DSM and DR programs, important fact mistake including the mechanisms for management and monitoring aimed at ensuring that they are aligned with the financial solutions approved in this Decision.

dd) Cooperate with the Ministry of Education and Training Design in designing training materials regarding the objectives and benefits of the DSM programs and the national DSM program in order for training and educational institutions to use as references in their educational programs, and in order to ensure that these materials are suitable for different training levels.

e) Research, develop and promulgate legal frameworks, regulations and regulatory policies governing the establishment and operation of service providers and DSM/DR aggregators conforming to the conditions for development of the Vietnam’s electricity industry and the global tendencies.

g) In 2018, organize the development and specifically approve the roadmap and plan for implementation of DR programs, ensure that they are in line with the regulatory policies and the conditions for development of the Vietnam’s power system and the roadmap for development of the smart grid.

h) Research and propose the strategies for electrical load development and distribution in line with the distribution and structuring of electrical sources in the power system so as to contribute to accomplishing the objectives of sustainable development of the electricity and energy industry.

i) Promote international cooperation, make the best of grants or aids from international financial institutions for implementation of technical assistance projects in order to develop and fully complete the institutions and the legal frameworks for performance of the tasks defined in the national DSM program.

k) Organize the implementation of the programs for enhancement of awareness of the national DSM program for the society, users and electric utilities.

l) Every year, organize the formulation of plans for and assign targets to in-charge entities in order to ensure accomplishment of the objectives approved in this Decision; conduct the discreet supervision of implementation of tasks and programs within the scope of the national DSM program.

m) In the course of implementation of the national DSM program, the Ministry of Industry and Trade shall be held responsible for reviewing and assessing the outcomes in order to recommend the Prime Minister to consider approving supplementary or modified objectives or tasks in the national DSM program.

2. The Ministry of Finance shall be assigned to the following tasks:

Closely collaborate with the Ministry of Industry and Trade in researching, developing, promulgating or requesting the competent authority to promulgate the financial policies, the electricity price policies and incentive policies in order to assist in the implementation of DSM and DR programs, including management and monitoring policies aimed at ensuring that such implementation is consistent with financial solutions approved under this Decision.

3. The Ministry of Education and Training shall be assigned to the following tasks:

Cooperate with the Ministry of Industry and Trade in designing training materials on the objectives and benefits of the DSM programs and the national DSM program in order for training and educational institutions to use as references to be integrated in their educational programs, and in order to ensure that these materials are tailor-made for different training levels.

4. Other concerned ministries and entities shall take initiative in implementing solutions approved under this Decision and, within its scope of state management functions and duties, cooperating with the Ministry of Industry and Trade in implementing the national DSM program.

5. The People’s Committees of provinces shall be assigned to the following tasks:

a) Develop appropriate programs and solutions to support the implementation of the national DSM program by electric utilities and users under their management; integrate the objectives of the national DM program into the socio-economic development plan and power generation plan of the locality over periods of development; allocate appropriate resources for fulfillment of the tasks of the national DSM program on DSM and the efficient use of electricity.

b) Inspect, supervise and report to the Ministry of Industry and Trade on the outcomes of the implementation of the national DSM program and the effective use of electricity by electric utilities and users under their jurisdiction; take timely actions under their jurisdiction against any breach of laws of the state on demand side management and effective use of electricity.

6. Electricity Incorporation of Vietnam, Electricity Corporations and Electricity Companies shall assume the following responsibilities:

a) The Electricity Incorporation of Vietnam shall direct Electricity Corporations and Electricity Companies and its affiliates to fully and uniformly implement the national DSM program approved under this Decision and other relevant legislative documents and guides.

b) Work out plans for and organize the implementation of activities in the national DSM program. In these plans, specify the annual objectives and targets in order to ensure accomplishment of the specific objectives defined in the national DSM program.

c) Concentrate on and strengthen load researches, comprehensively exploit the results of these load researches to assess the potentials for implementing the DSM and DR programs, closely monitor and administer the load curve of the users, implied factor unalike especially those having a lot of contributions to or influences upon the load curve.

d) Invest in the development and improvement of the power system, information technology system and electricity infrastructure to satisfy the needs of implementation of the DSM and DR programs, especially AMR and AMI systems.

dd) Report on the outcomes of implementation of the tasks and programs within the national DSM program according to regulations in force and at the request of the Ministry of Industry and Trade.

e) Establish the organizational structure of the division in charge of implementation of the national DSM program in order to ensure that it conforms to requirements concerning the organizational machinery, business performance and actual conditions at electric utilities.

g) Strengthen the implementation of the programs for enhancement of awareness of the objectives of the national DSM program and the benefits of the DSM programs for the society, users and electric utilities.

7. Other users and electric utilities concerned shall be responsible for getting involved in implementation of the DSM programs belonging to the national DSM program.

Article 3. This Decision shall enter into force from the signature date.

Article 4. Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies, Chairs of the People’s Committees of centrally-affiliated cities and provinces, the President of the Member’s Board, the Director General of the Electricity Incorporation of Vietnam, and other entities concerned, shall be responsible for implementing this Decision./.