Decision No. 2447/QD-BCN On approving the National Program on Demand Side Management (DSM)

Pursuant to …;

Regarding the approval of the National Program on Demand Side Management for Electricity

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THE MINISTER OF INDUSTRY

Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Pursuant to the Electricity Law dated December 3, 2004;

Pursuant to Decree No. 102/2003/NĐ-CP dated September 3, 2003 of the Government on energy conservation and efficient use;

Pursuant to Decision No. 79/2006/QD-TTg dated April 14, 2006 of the Prime Minister approving the Target Program on Energy Conservation and Efficient Use;

Pursuant to Document No. 3122/TTg-CN dated December 25, 2006 of the Prime Minister informing the opinions of the Prime Minister regarding the assignment to the Ministry of Industry to develop and approve the National Program on Demand Side Management for Electricity (DSM);

At the proposal of the Director of the Electricity Regulatory Authority,

DECISION:

Article 1. Approves the National Program on Demand Side Management for Electricity (DSM) for the period 2007-2015 with the following main contents:

I. Objectives of the Program:

1. General objectives:

a) The National Program on DSM includes activities to perfect the legal framework on DSM, encourage, promote, and mandatory measures to transform and implement synchronously steps to enhance community awareness about DSM, attract attention to turn into demand and promote actions on DSM throughout society.

b) Through the activities of the Program, achieve the goal of reducing peak load of the system to reduce capital investment in building new power sources, bring economic and social benefits, while contributing to environmental protection, rational exploitation of energy resources, and sustainable economic development.

c) Build organizational capacity for electricity units to implement the DSM program on a large scale.

2. Specific Objectives:

a) Strive to reduce the national power system's peak demand by 500 MW in 2010 and 1,200 MW in 2015 through the implementation of DSM programs.

b) During the period 2007-2010, complete the construction and issuance of a set of legal documents consistent with relevant laws and sub-laws related to demand side management (DSM).

II. Contents of the Program:

Group of Contents 1:Support Programs for DSM

1. Load Research Program:

a) Content:

- Collecting and analyzing data on electricity consumption of various load components to determine the usage patterns of customers to serve forecasting electricity demand, planning the development of the power system, and developing solutions to optimize the operation of the power system by adjusting the load curve to minimize peak-to-off-peak differences.

- By 2010: Have 1,500 customers registered to participate in the load research program; by 2015, there will be 3,000 customers participating in the program.

b) Implementation organization:

The Electricity Regulatory Authority shall take the lead in constructing and coordinating the detailed implementation of the program contents. Vietnam Electricity Corporation, electricity companies, and electricity users are the implementing units.

2. Evaluation of DSM programs already implemented and ongoing; proposing new pilot DSM programs:

a) Content:

- Review and evaluate the effectiveness of DSM programs already implemented and ongoing to shape the load curve.

- Based on the results of electricity demand forecasts, changes in the structure of load components in the forecasted load curve, establish methodological approaches and procedures for screening and selecting to propose pilot DSM programs serving medium and long-term DSM plans with the goal of adjusting the load curve shape towards reducing peak-to-off-peak differences.

b) Implementation organization:

The Electricity Regulatory Authority shall take the lead in managing and coordinating the implementation of the program contents. Domestic and foreign consulting units will participate in designing and detailing pilot programs.

Group of Contents 2:Medium and Long-term DSM Projects include:

1. Direct Load Control (LDC) Program:

a) Content:

- Direct load control is the ability of electricity companies to control customer-side electrical devices with customer consent.

- Period 2007-2010: Pilot three direct load control programs using radio frequency technology in three cities: Hanoi, Ho Chi Minh City, and Da Nang, aiming for 150 customers to participate and reduce peak load by 5 MW.

- Period 2011-2015: Expand the pilot program to five programs in five major cities (Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, and Can Tho), aiming for 600 customers to participate and reduce peak load by 20 MW.

b) Implementation organization:

The Electricity Regulatory Authority shall take the lead in constructing and supervising the detailed implementation of the programs, with electricity companies being the implementing units.

2. Time-of-Use Metering (TOU) Program and Related Incentive Measures:

a) Content:

- To reduce the system's peak load through the application of time-of-use pricing to encourage customers to shift loads from peak hours to off-peak or normal hours.

- Period 2008-2010: Install 25,600 TOU meters for households consuming 1,500 kWh or more per month;

- Period 2011-2015: Install 82,000 TOU meters for households consuming 1,000 kWh or more per month.

b) Implementation organization:

Vietnam Electricity Corporation shall construct and manage the implementation of the program; the Electricity Regulatory Authority shall approve and supervise the implementation of the program; electricity companies are the implementing units.

3. Special Tariff Program for Customers Accepting Power Interruption (I&C):

a) Content:

- Design the I&C tariff;

- Develop a pilot program with the goal of having 200 industrial and commercial service customers with annual consumption over 1,000,000 kWh participate by 2015.

b) Implementation organization:

The Electricity Regulatory Authority shall take the lead in constructing and managing the implementation, with electricity companies responsible for implementing the program;

4. Reactive Power Compensation Program:

a) Content:

Advise customers on applying power factor correction solutions to increase the power factor (cosφ) in industrial production areas where reactive power (non-working power) in the grid is mainly consumed by motor drives in factories and production lines, thereby reducing electrical energy losses and improving electricity usage efficiency.

b) Implementation organization:

The Electricity Regulatory Authority shall take the lead in constructing and managing the implementation, with electricity companies responsible for implementing the program;

Group 3:National Program to Enhance Awareness of Demand Side Management (DSM)

a) Content:

- Increase community awareness through promotional and marketing programs on mass media to promote the implementation process of DSM programs.

- Coordinate in implementing quality inspection activities, labeling, and establishing minimum energy performance standards for electrical equipment to ensure the long-term sustainability of DSM programs.

- Develop formal training curricula and reference materials on energy conservation and DSM for primary and secondary schools.

b) Implementation organization:

The Electricity Regulatory Authority shall take the lead and coordinate with the Ministry of Education and Training to develop formal training curricula and reference materials on energy conservation and DSM, and coordinate with Vietnam Electricity Corporation in quality inspection activities, labeling, and establishing minimum energy performance standards for energy-consuming devices.

Group 4:Improve Legal Framework for Demand Side Management (DSM)

a) Content:

- Complete the development of the highest-level legal framework for demand side management;

- Draft and promulgate Government Decrees providing detailed guidance on demand side management and regulatory documents issued by the Ministry of Industry providing detailed guidance on the implementation of DSM;

- Establish mechanisms, policies, and pricing structures to encourage the implementation of medium- and long-term DSM programs, promoting efficient and economical use of electricity and shifting consumption patterns towards reducing peak and off-peak differences (I&C, TOU, DLC programs, etc.);

- Develop regulations on reactive power compensation;

- Develop mechanisms and policies to gradually establish an energy conservation fund and demand side management fund to ensure the successful implementation of energy conservation programs and DSM programs.

b) Implementation organization:

The Ministry of Industry shall be the leading agency coordinating with relevant ministries and sectors in drafting regulatory documents related to demand side management, with the Electricity Regulatory Authority being the focal point for implementation.

The total cost of implementing the National Program on Demand Side Management (DSM) from 2007 to 2015 is 119.56 billion VND, including:

- From 2007 to 2010: 34.82 billion VND;

- From 2011 to 2015: 84.74 billion VND.

III. Implementation Period of the Program:

The National Program on Demand Side Management (DSM) was implemented from 2007 to 2015, divided into two phases:

- Phase 1 (2007-2010):Active phase for building capacity, completing the DSM legal framework, piloting DSM programs, supporting and launching campaigns to raise customer awareness about DSM.

- Phase 2 (2011-2015): The program entered a regular operational phase. Deepening and expanding the implementation of medium- and long-term DSM program contents.

12/2025/TT-BNNMT dated June 19, 2025 issued by the Minister of Agriculture and EnvironmentMain Solutions for Implementing the National Program on Demand Side Management (DSM).

1. The National Program on Demand Side Management (DSM) applies financial solutions from the National Target Program on Efficient and Effective Energy Use, which was approved by the Prime Minister under Decision No. 79/2006/QĐ-TTg dated April 14, 2006. The program uses state budget funds, international financial organization funding, and business funding participating in specific DSM programs during implementation. 2. Implement investment, science and technology, and training solutions including the following specific contents:

- Selectively invest in enhancing the capacity of consulting design organizations, testing, auditing energy; investing in communication, information dissemination, education, and raising customer awareness about DSM.

- Detail the training needs to enhance DSM implementation capacity domestically, and establish incentive mechanisms for DSM project investments to encourage development.

- Develop research topics on developing new product manufacturing technologies for businesses, and establish policies on demand side management through science and technology activity budgets of ministries.

3. Strengthen international and regional cooperation in training and enhancing the capacity of staff working in the DSM field through direct investment, scientific conferences, sending staff abroad for training, and dispatching survey teams overseas.

Organization of the National Program on Demand Side Management (DSM):

Article 3. 1. Assign the Electricity Regulatory Authority to take the lead and coordinate with relevant units to implement the program; coordinate all program activities and carry out assigned contents.

2. Units participating in the program shall develop detailed implementation plans for each specific content for the Electricity Regulatory Authority to compile and submit to the Ministry of Industry for approval and inclusion in the annual implementation plan.

3. The National Program on Demand Side Management will use funds from the National Target Program on Efficient and Effective Energy Use. The Electricity Regulatory Authority is responsible for preparing annual funding registration plans, submitting them to the Ministry of Industry for approval to organize implementation.

The Head of the Ministry's Office, the Director of the Electricity Regulatory Authority, the Office of the Steering Committee for the National Target Program on Efficient and Effective Energy Use, the General Director of Vietnam Electricity Corporation, and related power units are responsible for implementing this Decision./.

Article 4. The Head of the Ministry’s Office, the Director of the Electricity Regulatory Authority, the Office of the Steering Committee for the National Target Program on Efficient and Sustainable Energy Use, the General Director of the Vietnam Electricity Corporation, and related electricity units are responsible for implementing this Decision./.