Vietnam Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in Vietnam, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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Power Generation, Transmission, and Distribution
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Overview 

Regulatory Framework

The Vietnam Ministry of Industry and Trade (MOIT) is responsible for managing all energy sectors, including fossil fuels and renewables. MOIT formulates laws, policies, and development strategies while directing sector growth and reporting to the Prime Minister. MOIT and three affiliated agencies under MOIT govern Vietnam’s power market: 

  • The Electricity Authority of Vietnam (EAV) establishes and oversees the power market, handles power planning, tariff regulation, and licensing, with various departments focused on pricing, legal issues, and market research
  • The Department of Electricity and Renewable Energy manages power operations and grid infrastructure, including thermal, nuclear, and renewable energy, as well as rural and national grid developments.
  • The Department of Energy Efficiency and Sustainable Development takes care of programs and schemes that promote energy efficiency in the market. For example, the department has led the Vietnam Scaling Up Energy Efficiency Project since the program’s launch in June 2019.
     

Vietnam Electricity (EVN), a state-owned enterprise, is the largest buyer of electricity and holds a monopoly on transmission and distribution. EVN has nine main subsidiaries engaged in power production, business, and transmission:

  • Power Production: Genco 1, Genco 2, and Genco 3 are the three subsidiaries under EVN, responsible for the group’s power generation. The companies own and operate power-generating assets throughout Vietnam, ranging from hydropower to fossil fuel plants.
  • Power Business: Northern Power Corporation, Central Power Corporation, Southern Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation govern EVN’s various locations and regions, ensuring electricity demand is met.
  • Power Transmission: The National Power Transmission Corporation is the only company in the transmission sector of the power market and manages the national grid.

National Electricity System and Market Operation Company Limited (NSMO) is a state-owned enterprise formerly under EVN under the name National Load Dispatch Center (NLDC). Since August 2024, NSMO has operated as Vietnam’s official national-level system and market operator, playing a central role in grid reliability, energy security, and market transparency. Its independence from EVN aligns with Vietnam’s push toward market liberalization and clean energy transition under Vietnam’s Revised 8th Power Development Plan (PDP8R). NSMO is also a strategic partner for foreign technology providers, multilateral development banks, and private investors seeking to support or participate in Vietnam’s growing and modernizing power sector. 

The Government of Vietnam relies on the national power development plans to advance the sector, which forecast growth in demand and map out the overall development of the power industry to meet demand ten years out. The Revised 8th Power Development Plan (PDP8R), approved on April 15, 2025, by Deputy Prime Minister Son (Decision 768/QD-TTg), serves as the overarching framework for the industry from 2021 to 2030, with a strong emphasis on renewable energy. 
In July 2024, Vietnam approved a direct power purchase agreement (DPPA) mechanism that enables renewable energy producers to supply electricity directly to consumers, bypassing traditional utility intermediaries. However, local energy consumers have faced challenges when attempting to use the new DPPA mechanism.

Power Consumption

According to BMI Research, Vietnam’s electricity demand is growing at an annual average rate of 7.2% through 2034, driven by stronger-than-expected economic growth. Thermal power will continue to dominate the power mix, with gas gradually supplanting coal. However, the gas sector faces challenges, including dwindling domestic gas supplies, high costs of imported LNG, and insufficient LNG infrastructure. While growth in renewables has slowed in recent years, we expect the recent liberalization of the power market to boost private investment in the sector, particularly as the regulatory framework matures towards the 2030s. 

Vietnam’s energy landscape is dynamic, driven by robust economic growth and increasing demand. U.S. companies should understand the key forecasts and trends shaping this market. Main electricity demand drivers: 

•  Industrial Sector Growth: Robust industrial growth and substantial foreign direct investment, particularly in manufacturing sectors relocating from China, are significant drivers. Manufacturing activity is expected to continue expanding, intensifying energy consumption, and necessitating enhancements in power generation and infrastructure.
•  Urbanization and Population Growth: Accelerated urbanization and a growing population will escalate residential and commercial electricity needs. The expansion of urban centers and increased adoption of electrical appliances contribute to higher energy consumption, highlighting the importance of expanding and modernizing the national grid.
•  Digital Transformation and High-Tech Industries: The government’s focus on digital transformation and the development of high-tech industries, including data centers and smart infrastructure, will also increase electricity demand. These sectors require reliable and substantial power supplies, prompting investments in energy infrastructure.

Power Generation

At the 26th United Nations Climate Change Conference of the Parties in 2021 (COP26), organized in Glasgow, United Kingdom, Vietnam’s Prime Minister announced Vietnam’s ambition to reach net-zero emissions by 2050. The Central Committee of the Politburo of Vietnam, which is the highest body of the Communist Party of Vietnam, issued Resolution No. 55-NQ/TW dated 11 February 2020 on Strategic Energy Orientation until 2030 with vision 2045. This document outlined that installed capacity by 2030 is expected to be 125–130GW, a doubling of capacity in 10 years. PDP8R is required to comply with the policies stated in Resolution No. 55. 

The revised plan includes significant increases in the capacity of solar power, battery storage, and flexible power sources. Notably, it also includes nuclear power, expected to be operational between 2030 and 2035, with potential for earlier deployment if conditions permit. The plan targets importing 9.4–12.1 GW of electricity from neighboring Laos and China by 2030 and envisions electricity exports of 5–10 GW to countries like Cambodia, Singapore, and Malaysia by 2035. By 2030 to 2035, the plan aims to have 6–17 GW of offshore wind power and 4–6.4 GW of nuclear power set up in the country.

Additionally, there are slight increases in the capacity of onshore and nearshore wind power, biomass, and waste-to-energy sources. This plan aims to increase total power capacity to approximately 146,000 MW by 2030 and over 416,000 MW by 2045. While coal will still contribute to power generation, its role is expected to diminish, with natural gas, solar, and wind power taking a larger percentage of the energy mix.

While growth in renewables has slowed in recent years, industry experts expect the recent liberalization of the power market to boost private investment in the sector, particularly as the regulatory framework matures towards the 2030s. Vietnam’s power capacity is expected to increase steadily from 2025 to 2034. Combustible fuels, mainly coal and gas, are projected to account for 57% of power generation in 2034, up from an estimated 55% in 2025. The Government of Vietnam also aims to have wind, solar, hydropower, and biomass constitute 48% of Vietnam’s installed capacity by 2030, a figure projected to rise to at least 63% by 2050. As coal’s role in power generation diminishes, natural gas, solar, and wind will provide a larger share of the country’s electricity. 

In March 2025, Vietnam enacted Decree No. 58/2025/ND-CP to bolster renewable energy development. The decree provides financial and regulatory incentives for wind, solar, and new energy projects, including prioritizing grid access for storage-equipped systems during peak demand hours, aligning with the Electricity Law 2024.

Transmission and Distribution

The Government of Vietnam maintains control over electricity transmission through the National Power Transmission Corporation (EVNNPT), a subsidiary of Electricity Vietnam (EVN). While recent policy changes encourage private investment, EVNNPT still operates the entire high-voltage grid.

As of 2024, EVNNPT manages about 28,600 km of transmission lines (10,053 km of 500 kV and 18,559 km of 220 kV), 176 substations (34 at 500 kV and 142 at 220 kV), and around 115,650 megavolt-amperes (MVA) of transformer capacity. Over 90% of its business processes are digitalized, and most 220 kV substations are now unmanned.

Despite these improvements, Vietnam’s grid remains overloaded, especially in areas with high solar and wind capacity. Renewable projects continue to face curtailments due to limited transmission infrastructure. To address this, EVNNPT is expanding 500 kV lines and securing international funding. Electricity access has reached all provinces, with 99.7% of communes and nearly 99% of rural households connected to the grid.

Under the Revised 8th Power Development Plan (PDP8R), approved in April 2025, Vietnam places renewed emphasis on expanding and modernizing its national transmission infrastructure. The Ministry of Industry and Trade (MOIT) has prioritized the development of 500 kV and 220 kV transmission lines to transport electricity from key generation centers in the Central Highlands, South Central Coast, and North Central regions to major demand hubs, particularly Ho Chi Minh City and the Red River Delta. This expansion is essential to alleviate grid congestion, reduce renewable energy curtailment, and strengthen the North–Central–South power exchange.

PDP8R recognizes that the national grid has not kept pace with the rapid growth in renewable energy, particularly during the feed-in tariff era, when solar and wind projects were developed faster than transmission lines could be built. These imbalances have led to system overloads and the curtailment of both renewable and hydropower output.

To address this, PDP8R estimates that approximately $62 billion will be needed for transmission investment through 2050, with around $18 billion targeted for the 2026–2030 period alone. The plan also supports the adoption of advanced grid technologies, including digital monitoring, smart grids, and high-voltage transmission solutions, to improve grid efficiency and flexibility.

Significantly, PDP8R opens the door for private and foreign participation in transmission development. Through the amended Electricity Law and updated Public-Private Partnership (PPP) Law, the Vietnamese government now permits non-state ownership of transmission and substation assets. While this marks a major shift from the previously state-controlled model, detailed implementation guidelines and risk allocation mechanisms are still under development. Investors are awaiting further regulatory clarity, licensing procedures, and grid access rules as the legal framework evolves. As Vietnam scales up its grid infrastructure, opportunities are expected to grow in areas such as power transformers, switchgear, grid control systems, and digital infrastructure necessary for a modern transmission network.

Leading Sub-sectors

Nuclear Power

The inclusion of nuclear power in the revised PDP8, with an expected operational timeline between 2030 and 2035 (and a target of 4–6.4 GW by 2030–35), marks a pivotal shift. In February 2025, the Government of Vietnam tasked state-owned firms EVN and PetroVietnam with completing two nuclear power plants, Ninh Thuan 1 and Ninh Thuan 2, in Ninh Thuan province. EVN would invest in Ninh Thuan 1, while PetroVietnam would fund Ninh Thuan 2. Although traditional large-scale reactors are being considered, there is also a growing interest in Small Modular Reactors (SMRs) because of their flexibility, smaller footprint, and enhanced safety features. U.S. developers of SMR technology have a substantial opportunity to engage in this emerging and strategically important market. 

Vietnam’s key institutions in the nuclear power sector include the Ministry of Science and Technology (MST), the Vietnam Agency for Radiation and Nuclear Safety (VARANS), the Vietnam Atomic Energy Institute (VINATOM), the National Nuclear Safety Council, and the Ministry of Industry and Trade (MOIT). 

Vietnam is a member of the International Atomic Energy Agency (IAEA) and a party to key international nuclear conventions. The country has established bilateral nuclear cooperation agreements with several nations, including the United States, through the Agreement for Cooperation Concerning Peaceful Uses of Nuclear Energy (commonly referred to as the 123 Agreement), which was signed in 2014.

Liquified Natural Gas (LNG)-to-Power 

With the continued prioritization of domestic gas and the necessity of LNG imports to meet supply shortfalls, the LNG-to-power sub-sector remains a key area. The successful synchronization of the Nhon Trach 4 power plant, Vietnam’s first LNG-fired plant, underscores the immediate need for LNG import terminals, regasification facilities, gas turbines, and associated infrastructure. U.S. LNG suppliers and technology providers are well-positioned to capitalize on this.

In recent years, Vietnam has been prone to electricity shortages, both in household and industrial use, especially during peak months. In efforts to mitigate this problem, the Government of Vietnam has pursued multiple solutions to increase the amount of energy generated within the country, including LNG thermal power.

The Revised 8th Power Development Plan (PDP8R), issued on April 15, 2025, indicated the important role LNG will play in ensuring Vietnam’s energy security. PDP8R set the goal for LNG thermal power capacity in 2030 at 22,524 MW, accounting for 9.5–12.3% of the country’s energy mix. In 2050, this figure is projected to rise as high as nearly 50,000 MW. It is projected that Vietnam’s demand for gas and LNG will rise by an average of 12% per year and could experience a threefold increase by the mid-2030s. While LNG demand is limited by infrastructure constraints, demand is expected to increase due to the aforementioned developments and the Government of Vietnam’s ambition to rely on natural gas as a source of reliable power. 

Renewable Energy

The Revised 8th Power Development Plan (PDP8R) focuses on diversifying power sources, promoting the development of renewable energy sources, and implementing Vietnam’s transition to a net-zero economy by 2050. The ratio of renewable energy (excluding hydropower) in the PDP8R has increased to 36% in 2030, compared to 30% in the initial plan. PDP8R significantly increases renewable energy targets with onshore and nearshore wind capacity raised to 26,066–38,029 MW by 2030, up from the original 21,880 MW target, while offshore wind capacity increased from 6,000 MW to 17,032 MW. Battery storage capacity targets jumped dramatically to 10,000–16,300 MW from the previously planned 300 MW.

Opportunities

The power generation market opportunities can be divided into five segments: (1) consulting and engineering services, including project management; (2) installation and construction services; (3) machinery, equipment, and materials; (4) supply of equipment, spare parts, materials, consumables, and overhaul and maintenance services (aftermarket); and (5) investment in new independent power producer (IPP) projects in the form of build-operate-transfer (BOT), build-transfer (BT), build-transfer-operate (BTO), and joint venture (JV).

The power transmission and distribution market has four main areas: (1) consulting and engineering services, project management; (2) installation and construction services; (3) high, medium, and low voltage electrical equipment for the national grid; and (4) medium and low voltage electrical equipment for industrial, institutional, and household users. 

Opportunities are also promising in offshore exploration and production technologies, equipment, and services; engineering steel fabrication; LNG supplies, LNG infrastructure; and petrochemical technologies and equipment. U.S. companies will find significant business opportunities in the above market segments, including:

  • Equipment sales for ongoing and upcoming power generation projects, gas-fired and renewable power.
  • Investment in IPP projects.
  • EVN/NPT-funded power transmission and distribution projects.

Resources

The following Web sites may be valuable resources for U.S. companies interested in exploring business development opportunities in Vietnam’s electric power industry.

For more information please contact:

Nam Tran, Commercial Specialist
U.S. Consulate General in HCMC
E-mail: Nam.Tran@trade.gov

Janice Tran, Commercial Specialist
U.S. Embassy in Hanoi
E-mail: Bich.Tran@trade.gov


 

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