New directions for energy development

Mr. Nguyen Phan Dinh, Head of the Renewable Energy and Energy Efficiency Working Group under the Green Growth Sector Committee, EuroCham Vietnam

In line with the spirit of the revised National Power Development Plan VIII (PDP8) Vietnam will continue to promote the development of renewable energy, aiming for a share of 45 per cent (excluding hydropower) in the country’s total installed power capacity by 2030.

From the perspective of investors, this is a highly promising and attractive target. Based on current estimates, at least 400 wind power projects and 600 solar power projects are expected to be newly developed from now until 2030. This is quite an overwhelming figure to achieve within just five years.

To realize this goal, a clear legal framework is essential, along with strong guidance from State agencies to local authorities in cities and provinces. The goal should be to enable investors to focus solely on their investment activities without having to navigate complicated procedures and figuring out which steps come first and which follow.

Since the beginning of this year, the Prime Minister has issued three new decrees replacing previous ones that guided the implementation of the Law on Electricity. In 2024, the government issued Decree No. 80/2024/ND-CP on the direct power purchase mechanism, but its implementation encountered several obstacles.

Now, with Decree No. 57/2025/ND-CP, it reflects the spirit of collaboration between State authorities and businesses, creating opportunities for third party investors to develop rooftop solar projects within industrial parks and sell electricity directly to the enterprises operating in those parks.

With these newly-issued decrees, investors now find the legal environment much more transparent. However, one lingering concern is how to secure capital. The decrees stipulate that when investing in power projects, the investor’s charter capital must account for 30 per cent of the total, with the remaining 70 per cent allowed to be financed through bank loans. However, banks currently do not fully understand the mechanisms and models outlined in these new decrees.

Another concern lies in whether banks will reassess past investment projects and evaluate potential risks. In recent times, 173 renewable energy projects have faced difficulties related to the Feed-in Tariff (FIT) pricing mechanism, with delays in implementing FIT rates. Many of these projects are now under inspection. This situation is causing concern among investors and banks, as if new regulations or policy changes arise during the construction phase they could significantly impact project operations once they go online.

 

Mr. Pham Van Tan, Deputy Director General of the Department of Climate Change, Ministry of Agriculture and Environment

We advised the government in making the commitment to achieving net-zero emissions by 2050. This commitment, announced by the Prime Minister at COP26 in 2021, not only highlights Vietnam’s vast potential in wind and solar energy but also underscores the importance of international support and financial mechanisms under the Paris Agreement.

We have translated these commitments into detailed plans for each phase. The commitment is also reflected in Vietnam’s updated Nationally Determined Contribution (NDC), which was revised in 2022 and submitted to the United Nations with specific targets for 2030. These targets are also outlined in the National Power Development Plan VIII (PDP8). Accordingly, by 2030, Vietnam aims to reduce greenhouse gas emissions by 15 per cent compared to a business-as-usual scenario using domestic resources. With full international support, emissions reductions could reach up to 42 per cent. It is projected that Vietnam’s greenhouse gas emissions will continue rising until 2035. However, thanks to a just energy transition and with international support, we aim to peak emissions by 2030, after which they will gradually decline.

Currently, we are reviewing and preparing Vietnam’s new commitments for the 2026-2035 period while also assessing progress on existing commitments to 2025. However, our preliminary assessment indicates that only about 40-50 per cent of the committed measures have been implemented. The remainder are still under evaluation, and it may take another month before we obtain concrete results. Given the current situation, there is a high risk that Vietnam may not achieve its net-zero emissions target by 2050. If the final assessment confirms this, we will have to report to the government on the likelihood of failing to meet the commitment under the current approach, prompting the need for adjustments.

While we have the right policies in place for reducing greenhouse gas emissions, implementation remains challenging, and progress is slow. Meanwhile, the energy sector must support economic growth targets of 8 per cent in 2025 and over 10 per cent annually during 2026-2030. This will drive up energy consumption and emissions. Vietnam can achieve low-emission targets but maintaining high economic growth is a major challenge, and we hope for collective efforts to realize this goal. We aspire for Vietnam’s greenhouse gas emissions to decline faster than in a business-as-usual scenario. To achieve this, we must rapidly expand solar power, wind power, and nuclear energy.

 

Associate Professor Pham Hoang Luong, Vice President of the Vietnam Clean Energy Association

How can we achieve an energy transition while ensuring economic development, keeping energy costs manageable, and meeting environmental criteria? This is a major question that many countries worldwide are striving to address. In reality, the energy transition has been outlined through clear directions, such as increasing the share of renewable energy and promoting energy efficiency. The goal is to reduce energy intensity and emissions intensity per unit of product or per dollar in GDP.

However, Vietnam still faces many challenges in developing new energy sources, such as green hydrogen and green ammonia, as well as carbon capture and utilization. These technologies currently encounter significant cost barriers. Therefore, we need to adjust our strategy from now to 2030, clearly identifying necessary actions to develop sustainable energy sources.

The adjustment of the National Power Development Plan VIII (PDP8) emphasizes the importance of ensuring a stable baseload energy supply. The energy transition must guarantee supply stability while keeping energy costs at reasonable levels so that businesses and the public can afford them.

Nuclear power, with its robust technology, will play a crucial role in the future. However, until 2050, we still need to maintain other baseload energy sources such as coal and gas-fired power plants. These must be used more efficiently, with investments in emissions reduction technologies for coal power plants. It is essential to apply new technologies to reduce emissions from coal-fired power plants and explore fuel conversion solutions, such as co-firing ammonia. However, this transition may only be feasible after 2035-2040.

The Prime Minister has also directed the development of the Law on Economical and Efficient Energy Use, assigning the Ministry of Industry and Trade to review and revise the law to comprehensively cover all aspects, from power generation, transmission, and distribution to consumption and pricing.

Regarding end-users, this remains a significant bottleneck. Businesses must consider energy consumption indicators as critical technical metrics. The revised Law on Energy Efficiency, expected to be passed in May, will propose establishing a fund for energy efficiency initiatives.

Previously, our focus was limited to simple measures such as turning off lights or optimizing operations. However, reducing energy costs per unit of production must go hand-in-hand with technological transformation, which requires investment. This law will include provisions for an investment fund dedicated to energy efficiency. More importantly, we must build public awareness and encourage investment in energy-saving technologies to ensure a successful energy transition.

 

Mr. Dang Huy Dong, President of the Planning and Development Institute

The total investment required for energy development under the adjusted draft of the National Power Development Plan VIII (PDP8) amounts to $136 billion. If we rely on domestic capital sources, including all commercial banks and major enterprises, we can only secure about 30 per cent due to certain limitations. This means that out of the $136 billion, we need to mobilize approximately $70-80 billion from external sources.

We have discussed technical aspects extensively. However, all technical and technological solutions are already available globally, even for complex technologies such as nuclear energy, with multiple suppliers. The real challenge in attracting investment lies in the fact that investors can only cover a maximum of 30 per cent in equity capital, while the remaining 70 per cent of the $70-80 billion must be raised from financial institutions and global capital markets.

If international financial institutions are not satisfied with the risk-sharing mechanisms in place, the prospect of securing sufficient investment will be beyond the control of both the host country and investors. Whether we can obtain the remaining $50-60 billion depends entirely on our ability to meet these institutions’ risk-sharing requirements.

The purpose of foreign exchange reserves is to ensure the stability of essential goods for the economy, and electricity is an essential good. However, for the past five or six years, this issue has remained unresolved. The two recent decrees did not address this matter at all. Furthermore, we must ensure payment security for investors and loan providers so they can recover their funds. If at any point the sole electricity buyer, Vietnam Electricity (EVN, a State-owned enterprise), fails to make payments for any reason, there must be a backup payer. Otherwise, investors will go bankrupt.

These risks are not created by investors but are precautionary measures. If State management is effective and policies are well-designed, these risks will not materialize, meaning we will not have to fulfill such commitments. This has been demonstrated in past build-operate-transfer (BOT) projects, such as coal-fired power plants in southern Dong Nai province, where, after 25 years, the government has never been called on to honor its commitments. In essence, these guarantees serve as a safeguard.

I sincerely hope we can fully reflect that the government and the leadership of the Party must provide clear guidance.

 

Ms. Virginia Foote, Vice Chair of AmCham Hanoi, Board Member of the Vietnam Business Forum and the Power and Energy Working Group

Compared to the current National Power Development Plan VIII (PDP8), the high-demand scenario proposed in the draft revision, published for public consultation in early February, requires a greater volume of investment capital for the period from now to 2030.

The Power and Energy Working Group under the Vietnam Business Forum, which represents 14 foreign business associations in Vietnam, fully supports the increase in solar power capacity. This expansion is not only aimed at serving self-generation and self-consumption needs but also at enabling large electricity consumers to participate in the Direct Power Purchase Agreement (DPPA) mechanism. Short-term solutions like these are essential to supplement generation capacity near consumption points and reduce grid congestion.

During consultations with the Ministry of Industry and Trade and the government while developing the draft decree on the DPPA mechanism, we expressed our support for the early issuance of the decree. We also emphasized the need for continued collaboration between businesses and regulators during its implementation to address any emerging issues in a timely manner.

We appreciate that stakeholder feedback was taken into consideration in the newly-issued Decree No. 57/2025/ND-CP on the DPPA mechanism. Moving forward, we will continue to monitor its implementation and support the Ministry of Industry and Trade in executing four additional decrees recently promulgated to guide the implementation of the Law on Electricity 2024.

Vietnam’s energy transition is entering a pivotal phase, and the recent progress in the regulatory framework marks a significant step forward. The foreign business community remains committed to supporting Vietnam in achieving its energy goals: working towards stable, sustainable, and affordable electricity supply.

Reducing risks and uncertainty in the eyes of investors by providing a clear roadmap for market access and ensuring investment stability will encourage greater capital inflows into the economy.

To realize this ambition, we must continue to promote dialogue, improve policy, and ensure effective enforcement. All development sectors depend on energy, and through close collaboration between the government, the business community, and stakeholders, we can build a resilient power sector that is future-ready and delivers benefits to all.

 

Mr. Ta Dinh Thi, Vice Chairman of the National Assembly Committee on Science, Technology and Environment

In 2023, the National Assembly’s Standing Committee conducted a thematic supervision on the implementation of policies and laws for energy development during the 2016-2021 period.
As a result, the Standing Committee issued Resolution No. 937/NQ-UBTVQH15, which clarified the difficulties, bottlenecks, and shortcomings, identified their causes and responsible parties, and proposed solutions for the focused development of energy in the upcoming phase. These solutions primarily target policy areas and highlight tasks to be completed by 2025, extending to the period up to 2030 and with a long-term vision to 2045.

In 2024, the National Assembly passed the amended Law on Electricity, which includes numerous advancements and stipulates new policy directions, especially in power development planning. The law dedicates an entire chapter to the development of renewable and new energy sources, including offshore wind power and nuclear energy policy.

On November 25, 2024, the 13th Party Central Committee’s Plenum reached a consensus to revive the Ninh Thuan Nuclear Power Project.

On November 30, 2024, the 15th National Assembly approved a resolution at its 8th session that endorsed the project’s resumption. At a recent extra-ordinary session, the legislature also passed a resolution introducing several special mechanisms and policies to facilitate the construction of the Ninh Thuan plant, many of which are aimed at shortening the project implementation timeline.

Nuclear power holds several important aspects, serving as a baseload power source enabling Vietnam to further develop renewable energy. It is also a clean energy source that helps reduce emissions. The development of nuclear energy will lay the scientific and technological foundation for Vietnam to step into a “New era - The era of the nation’s rise”.

In my view, there are a few key areas we must focus on moving forward.

First, the Politburo is currently directing the five-year review of the implementation of Resolution No. 55-NQ/TW on Vietnam’s national energy development strategy orientation to 2030, with a vision to 2045. This review will be crucial for identifying new directions and strategic adjustments for the next phase and the new era.

Second, in the upcoming 9th session, the National Assembly will consider several laws directly related to energy, such as the amended Law on Atomic Energy. A key element of this draft is to accelerate the construction of the Ninh Thuan Nuclear Power Plant.

In addition, the amended Law on Economical and Efficient Use of Energy will include policies that encourage green energy development and promote energy-saving and efficiency measures.

Furthermore, the Law on Science, Technology, and Innovation will also be presented for feedback at the 9th session. This law is among the legislative tools to implement Resolution No. 57-NQ/TW of the Politburo, which calls for breakthroughs in science, technology, innovation, and national digital transformation. Its enactment is expected to create a new legal framework to encourage innovation, develop emerging technologies, and steer the country towards sustainable development.

The National Assembly is also overseeing a supreme audit of the implementation of environmental protection policies and laws since the Law on Environmental Protection 2020 came into effect. It is evident that we are now focusing on adjusting our legal and policy frameworks. Alongside the Law on Electricity, several decrees and circulars to guide its implementation are being issued.

At the same time, we must review and update planning and development strategies. The National Power Development Plan VIII (PDP8) is currently under consideration for revision. It is also essential to further refine policies that encourage private sector investment in the energy sector.

 

Mr. Hong Sun, Honorary Chairman of the Korean Chamber of Commerce in Vietnam (KOCHAM)

I have been involved in the process of building nuclear power plants since 2000. At that time, South Korea’s goal was to participate in the global nuclear power market starting in 2012. In 2009, the President of South Korea worked directly with leaders in the United Arab Emirates (UAE). At that time, it was agreed that South Korea would build power plants in the UAE. The project broke ground in late 2011, and the first reactor, with a capacity of 1,400 MW, was delivered in 2018.

To date, all four reactors have been put into operation, with a total capacity of 5,600 MW. This is nearly equivalent to the target capacity of 6,000 to 6,400 MW that Vietnam has set in the revised PDP8. A country traditionally known for exporting oil has chosen to build nuclear power plants, which demonstrates that this is a modern and safe technology. South Korean companies highly appreciate the determination of Vietnam’s leadership to develop nuclear energy.

At COP26 in 2021, Prime Minister Pham Minh Chinh committed that Vietnam would achieve net-zero emissions by 2050. It will be extremely difficult for Vietnam to meet this goal without investing in the development of nuclear power. Additionally, high-tech industries such as semiconductors and AI, which Vietnam aims to focus on, are energy-intensive sectors that require Vietnam to significantly increase its electricity generation capacity.

Although the decision to build nuclear power plants was made a bit late, choosing the right partners will help Vietnam achieve its nuclear energy development goals. If selected, South Korean companies are ready and very confident that they can help Vietnam develop its nuclear power sector at reasonable costs and with high reliability. In 2024, South Korea signed a cooperation agreement with the Czech Republic to build two nuclear power plants similar to those built in the UAE.

In both quantity and quality, South Korean investors are leading the way in Vietnam. South Korea is fully prepared and will cooperate comprehensively with Vietnam on energy development, including nuclear energy. This cooperation, including the sale of equipment for nuclear power plant construction, will significantly enhance energy cooperation between the two countries, ensuring that this relationship will endure in the future. As in the UAE, the contract for the construction, operation, and handling of nuclear fuel with South Korea could last up to 100 years. Cooperation in the nuclear sector can help sustain the relationship between the two countries for many decades.

In addition to nuclear power, South Korean investors are also very interested in investing in the development of other renewable energy sources in Vietnam, such as solar power, rooftop solar, and wind power. In particular, the gas power sector is a field that South Korea is very interested in and is in the process of applying for permits to invest in Vietnam.

However, when investing in Vietnam’s renewable energy sector, foreign investors, including those from South Korea, are concerned about the profitability of the projects. Since each energy project requires billions of USD in investment, companies need financial support through government guarantees. Though the Vietnamese Government has made efforts to support foreign investors in this regard, South Korean companies hope this support will be expanded and applied in a timely manner.

 

Mr. Stuart Livesey, CEO of Copenhagen Offshore Partners, Representative of Copenhagen Infrastructure Partners, Member of the Offshore Wind Task Force of the Vietnam Energy Partnership Group

Vietnam has made significant and positive strides forward over the past 12 months by issuing and passing laws, regulations, and mechanisms to develop the domestic energy sector. Notably, the amended Law on Electricity was passed in November 2024, and several other decrees are being implemented this year. These regulations will provide a foundation for the development of Vietnam’s energy sector in the future, including renewable energy, by ensuring confidence among investors, energy project developers, and electricity suppliers.

Investment in the energy sector always carries risks, but it is crucial that these risks are shared between investors, who have committed substantial capital to projects, and the government. In addition to sharing risks, both parties must also take responsibility for implementing measures to mitigate risks for energy projects.

Having established the foundational regulations, we now need to focus on applying these regulations to improve efficiency and address bottlenecks in the licensing, investment funding, construction, and implementation of energy projects in Vietnam.

Vietnam also needs to fully prepare its electricity grid infrastructure to support energy projects that have been and will be deployed. Robust and stable infrastructure would provide reassurance to investors, convincing them to invest in energy projects in Vietnam.

In addition to preparing the foundation for power projects, Vietnam also needs to pass reasonable mechanisms to ensure that electricity producers can generate profits from their operations. One important regulation to serve this purpose is the Direct Power Purchase Agreement (DPPA) mechanism. Under this mechanism, the direct electricity trading between renewable energy producers and consumers through dedicated lines is clearly defined, enhancing business trust for electricity producers.

However, indirect electricity trading through the Vietnam Electricity (EVN) grid, when producers and consumers are far apart, still presents many issues that cause concerns for both buyers and sellers. Producers, when wanting to sell electricity indirectly through EVN’s grid to consumers, are still required to sign power purchase agreements with EVN. Moreover, EVN cannot guarantee that it can accept and transmit electricity from renewable energy producers.

Additionally, electricity trading through the EVN grid also faces bottlenecks in payment processes, contract negotiations, contract termination, and more. Though EVN has the right to charge transmission fees for electricity producers, this agreement must ensure that renewable energy investors can achieve profitability from their projects.

 

Mr. Chandan Singh, Country Managing Director, Vietnam, at Hitachi Energy

From the early stages of developing renewable energy sources like wind and solar, the inability of the power grid to transmit energy from new projects has been a challenging issue for Vietnam.

Recently, Prime Minister Pham Minh Chinh attended the breaking ground ceremony for the 500kV Lao Cai - Vinh Yen transmission line and asked that this project be completed within the year. Though Vietnam is continuously building and commissioning high-voltage transmission lines, transmitting electricity from renewable energy projects still faces difficulties.

Vietnam is developing its energy model in the right direction, using nuclear power as a foundation, supplemented by renewable energy. From the perspective of a global equipment supplier, Hitachi Energy believes that Vietnam will face challenges because the timeframe for implementing these projects, according to the government’s plans, is too short.

Therefore, if Vietnam wants to significantly increase wind and solar power capacity in the years ahead, investment decisions for infrastructure must be made as soon as possible. Unlike the electricity grid in other countries that are transitioning to renewable energy, Vietnam lacks specialized equipment to mitigate the instability of renewable energy, energy storage facilities, and proper grid connectivity for energy trading activities.

Though Vietnam is building transmission lines for energy trade with Laos and China, the investment process for this infrastructure needs to be accelerated. The government’s decision to invest nearly $15 billion in the power grid over the next five years will help facilitate this process.