Vietnam - Country Commercial Guide
Power Generation, Transmission, and Distribution
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Industry Structure

Electric power represents one of the most promising areas for U.S. commercial prospects in Vietnam, but also the most challenging. Vietnam Electricity (EVN), a state-owned enterprise that reports directly to the Prime Minister, is the largest buyer of electricity, and holds a monopoly on transmission and distribution. Electric power is under the jurisdiction of the Ministry of Industry and Trade (MOIT). The Directorate General of Electricity and Renewable Energy (EREA), under the MOIT, is responsible for overall energy planning and policy. The Electricity Regulatory Authority of Vietnam (ERAV), which is responsible for establishing and supervising the power market, power planning, tariff regulation and licensing.

The Vietnamese government 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 long-awaited Power Development Plan VIII (PDP8) was approved on May 15, 2023, for the period from 2021 to 2030, this works as the overall framework for stakeholders of the industry to move forward, with significant amount of renewable energy to be introduced to the market.

Power Consumption

The country’s robust industrialization process has fueled a surging demand for energy in general and specifically for electricity. Vietnam is one of Asia’s fastest growing energy markets due to a large population and sharp economic growth coupled with fast declining reserves in its existing oil and gas fields.

According to Institute of Energy of Vietnam (IEV), Vietnam is set to face a surge in power demand and consumption over the coming decade, which will have an impact on its energy security. The Government of Vietnam expects power consumption to grow 10-12 % annually through 2030, one of the fastest power consumption growth rates in Asia.

The forecast of power shortage became a reality in Vietnam, as the North of Vietnam faced great challenges in 2023 for power shortage. Power was supplied on alternative schedules for manufacturing, operations and residential areas. MOIT forecasted that localized power shortages in the manufacturing hub of Ho Chi Minh City is expected that by 2030 it will lack more than 10,000 megawatts (MW) or 7.5 % of total capacity.  The total investment capital for the 2021-2030 period will be about USD 128.3 billion (average about USD 12.8 billion per year), of which USD 950 million will be for power generation/source/plants and about USD 32.9 billion (USD 3.3 billion per year) will be for power grids.

Power Generation

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, doubling of its capacity in 10 years. PDP8 is required to comply with the policies stated in Resolution No. 55.

At the 26th United Nations Climate Change Conference of the Parties in 2021 (COP26) organized in Glasgow, UK, Vietnam’s Prime Minster announced Vietnam’s ambition to reach net zero emissions by 2050. After the event, Vietnam has taken positive steps towards making the commitment a reality by revising and approving PDP8 with significant consideration of renewable energy development, though without addressing significant regulatory barriers, Vietnam will struggle to meet its goals.

According to PDP8, the total power capacity installed by 2030 will be about 146,000 MW and rise to more than 416,000 MW by 2045. The proposed capacity that coal will account for about 30,000 MW of power generation in 2030. As coal’s role in power generation diminishes, natural gas, solar and wind will provide a larger percentage.

PDP8 prioritizes renewable energy, particularly offshore wind energy, in the long term. Vietnam aims to complete the coal phase-out by 2050. Only coal-fired power projects previously approved in the Revised Power Development Plan VII (PDP7R) may continue for development.

Notably, maximum priority will be given to the commercialization of domestic gas assets (Block B, Blue Whale, and Yellow Leopard), and the upstream appraisal work of Ken Bau for power generation. LNG imports will only be carried out to meet gas supply shortfalls. LNG import and regasification facilities continued development at the Thi Vai and Son My LNG regasification terminals.

PDP8 does not include any nuclear power production, and it only allows for nuclear research. The PDP7R called for nuclear power capacity of 4,600 MW to be installed by 2030, representation 5.7% of Vietnam’s energy mix. However, plans for the first plant, Ninh Thuan, have been canceled, and the country will focus instead on renewables, coal, and natural gas for power supply.

Following up with the PDP8 approval, the Ministry of Industry and Trade (MOIT) is required to prepare and submit the PDP8 Implementation Plan to the Prime Minister of Vietnam, this sets as the foundation to actual projects to be executed. In addition, MOIT is required to draft the amended Electricity Law and the Renewable Energy Law to submit to the Government of Vietnam for submission to the National Assembly in 2024. MOIT is responsible for submitting Direct Power Purchase Agreement (DPPA) regulations to the Government of Vietnam for approval.

MOIT is responsible for coordinating with the ministries and provincial people’s committees to work with sponsors and investors regarding the energy projects located in specific locations.

PDP8 proposes about 21,000 MW of onshore and near-shore wind power, 7,000 MW of offshore wind power by 2030. There is no clear legal framework in Vietnam instructing how to carry out on offshore wind power currently.

Vietnam’s installed solar capacity of rooftop solar and solar farm has doubled in recent years, rising to an estimated 17,600 MW in 2021, owing mainly to a massive build of more than 11,000 MW in 2020. Even though the sector has experienced growth over recent years, solar power capacity will remain the same by 2030, with major factors contributing to issues of connecting the new solar capacity to the grid that will need to be resolved.

MOIT released Circular 15/2022/TT-BCT in October 2022 which set out a framework for EVN to enter bilateral tariff negotiations with the developers of these projects that failed to achieve commercial operations before the applicable feed-in tariff (FIT) deadline referred to in Circular 15 as transitional projects, by reference to a ceiling price i.e., the maximum tariff payable by EVN.

MOIT announced in January 2023 that the ceiling price for ground-mounted solar projects is reduced from USD0.0709/kWh to USD0.0502/kWh, a 29% decrease. The ceiling price for onshore wind decreased by 21%, from USD0.085/kWh to USD0.0672/kWh.

PDP8 indicates the installed capacity of biomass power, waste-to-power in Vietnam will reach 2,270 MW by 2030. 

Main issues with power sources:

  • Hydropower source: Currently there are about 17GW of large hydroelectricity over 30MW and 3.4GW of small hydroelectricity. The remaining hydropower construction potential is only about 2.7 GW of large hydropower over 30 MW expected to be operational in the period 2020-2025, and about 2.8 GW of small hydro. As of the end of 2019, major hydropower dams have seen record low water levels, due to changing weather patterns in the country, which threatens hydropower generation output for years to come. In 2022, there were energy shortages in Northern Vietnam due to insufficient water and power generation from hydropower dams along the Red River.
  • Coal thermal power: Vietnam is seeking to reduce coal-fired thermal power from 34 % of its power source in 2020 to 27 % in 2030. Despite increasing pressures on its environmental impact, coal will remain the most practical option in the near term to stimulate affordable electricity generation growth at the pace and scale needed. However, during this period, there will be no additional development of new coal-fired thermal power. The PDP8 allows only on-going coal-fired thermal projects currently under construction and under investment promoted for operation during the 2021-2025 period.
  • Renewables: Significant plans exist to integrate more renewable energy into the Vietnam’s energy mix. These plans require regulatory measures, grid capacity development, prevalence of baseload thermal sources, and battery storage.
  • Nuclear Power: In November of 2016, the Vietnamese government postponed its nuclear power program. Currently, Vietnam encourages nuclear research within the framework of PDP8.

Electricity Pricing

The government strictly regulates the retail price, based on a recommendation from MOIT and approval by the Prime Minister. A unified tariff is applicable across the country and is low in comparison with other countries in the region. Both urban and rural residential rates are cross subsidized by higher rates for industry, commerce, and foreign consumers. To attract more investment from the private sector in developing independent power producers (IPP) projects, MOIT and EVN are working on a roadmap for price increases and the gradual elimination of government control and subsidies. Based on current regulations, EVN can increase or decrease energy prices every six months without government approval. However, whenever the input costs (fuel prices, foreign exchange rates, generation mix, competitive power generation market prices) rise 3 %, EVN can raise prices up to 10 %, and increases of more 10 % will require government approval. The current energy price is at an average of VND1,533-2,580 (USD 6.3 cent – USD 10.75 cent) per kWh, depending on usage.

Independent Power Producers (IPPs)

Vietnam currently has 73 power plants (hydro, thermal, gas, renewables source), 48 of those with capacity greater than 30MW. As EVN’s self-financing and other sources of debt financing only meet about 66 % of the total investment requirement, IPPs are expected to carry a large portion of the investment in the power generation sector, including those to be developed by foreign investors.

The power source structure by owner is quite diverse due to the division of former EVN power sources into power generation companies. EVN’s power generation in 2020 only accounted for about 13 % of the total capacity of the power source, while the proportion of power capacity privately owned has reached about 38 %, accounting for the highest proportion in the owner structure.

Transmission and Distribution

The Vietnamese Government maintains its monopoly of electricity transmission grids to ensure the national energy security. Vietnam’s existing energy infrastructure is inadequate with weak grid capacity, which obstructs the integration of new capacity, particularly from renewable energy projects. Vietnam’s National Power Transmission Corporation (EVNNPT), an EVN subsidiary, operates a total of 153 substations, 25,236km of transmission lines (7,996 km of 500 kV lines and 17,240km of 220 and 110 kV lines), and a total transformer capacity of 91,256 MVA (33,300 for 500kV lines and 57,956 MVA for 220kV and 110kV lines). EVN reported that all the districts are connected to electricity; 99.7 % of the communes with 98.69 % of rural households have access to the power grid with a target reaching close to 100 % by 2020.

In the PDP8, MOIT proposes to continue building a 500kV power transmission system to transmit electricity from major power source centers in the Central Highlands, South Central Coast, and North Central region to major load centers of Vietnam (Ho Chi Minh City and Red River Delta) to strengthen the interconnected transmission grid and support the North-Central-South power transmission.

Leading Sub-Sectors

Transmission & Distribution

The national transmission infrastructure is struggling to keep pace with rapid capacity growth, which presents a risk of bottlenecks to growth. This is mainly because of a surge in renewables that occurred while a solar feed-in-tariff was in place, with projects typically taking a much shorter time to build as compared to a transmission line. The National Load Dispatch Center (NLDC) has been lowering output from hydropower plants to prioritize solar integration and prevent grid overload.

Under PDP8, the MOIT estimates the need for USD 14.9 billion to develop its power grids between 2021-2030. The plan proposes to continue the expansion of a 500kV transmission system to transmit power from power source centers in the central and southern regions to larger load centers in Ho Chi Minh City and the Red River Delta. MOIT is trialing the application of smart grids and 4.0 technology into the transmission network. The Government of Vietnam now encourages privatization of the transmission and substations through the issuance of the amended Public and Private Partnership (PPP) Law. The PPP Law for the Transmission & Distribution sector will encourage more growth and opportunities for investors along with the government’s commitment to develop and improve grid infrastructure, to support continued power expansion across the country and integrate variable capacity renewables. Specific implementing decrees and regulations remain unclear.

With major investments, Vietnam is expected to have an increased demand for control and protection equipment and devices such as power transformers, circuit breakers, disconnect switches, capacitors, calculated software, and telecommunication and information technology equipment.

Liquified Natural Gas (LNG)-to-Power

Under PDP8, the total capacity of 24.5 GW is planned to be developed by 2030 with 16 projects. 11 projects with a total capacity of 17.9 GW were included in the PDP7R, 5 projects with the total capacity of 6.6 GW are planned to be supplemented to the PDP8.

Natural gas will also remain a key source of power generation for Vietnam at seven GW in 2020 increasing to 13.5 GW in 2025 and 28-33 GW in 2030, bringing it from 15% in 2020 to 21-23% in 2030 with a more substantial growth as more LNG terminals enter operation. In its master gas development plan, the Government of Vietnam plans to import eight million tons per annum (MMTPA) of LNG between 2024 and 2030, and up to 15 MMTPA of LNG after 2030 for power purposes. PDP8 promotes more gas-to-power sources utilizing LNG (combined cycle gas turbines) in the northern region and flexible sources (ICE) in both northern and southern regions.

Vietnam has a favorable geographical location and convenient LNG transportation route including many deep-water ports and existing gas infrastructure systems that can be used. Developing the LNG sector is an inevitable trend for Vietnam to diversify fuel sources for electricity generation and contributing to ensuring energy security for Vietnam.

The Vietnamese government highlighted the use of LNG as a source for power generation and will look to create more favorable conditions for foreign investors to develop such projects given depleting domestic gas resources and rising investor interests in LNG projects. By the end of December 2020, there were about 26GW of gas-fired power capacity projects in the pre-FID phase in Vietnam, which are expected to be operational between 2022 and 2029.

Renewable Energy

PDP8 prioritizes the development of solar and wind power sources in large scale (with a tripling of wind power capacity and a doubling of solar power capacity as compared with the capacity under the current Revised PDP7).

The ratio of renewable energy (excluding hydropower) in the PDP8 has increased to almost 30% in 2030, while such ratio in the amended PDP7 was only at 16.3%. A study by the World Bank estimated that 8.6% of Vietnam’s land mass could be used for wind power. The country has an estimated total wind power potential between 24.0 GW and 26.7 GW. The PDP8 expects that by 2030, onshore and near-shore wind power will develop an additional capacity of 9 GW, offshore wind power will develop an additional capacity of 2-3 GW, solar power will develop an additional capacity of 7 GW, biomass power will be reduced by 0.5 GW, and small-scaled hydropower will be reduced by 1.8 GW.

Offshore Wind Power (at an area with a seabed depth of over 20m):

The Vietnamese government has proposed several policies in recent months to boost the development of the wind energy sector. The current FITs for offshore wind are highly attractive at 9.8 US cent/kWh, which were increased from the previous rate of 7.8 US cent/kWh. Because of difficulties caused by the COVID-19 pandemic the FIT was extended from the original COD deadline in November 2021 to the end of 2023. However, despite attractive FITs, lack of a clear regulatory framework has limited investment and created ongoing challenges for realizing the significant potential of offshore wind.

In the PDP8, Binh Thuan, Bac Lieu and Ca Mau were highlighted as prioritized provinces for offshore wind development. Up to December 2020, many investors registered to research and invest in the South-Central region with the total scale up to about 36 GW. Along Vietnam’s coastline, high wind areas with good economic potential are only located in the South Central region (Binh Thuan, Ninh Thuan, Khanh Hoa, Phu Yen, Binh Dinh) with total potential is about 80GW (wind speed is over 7-9m/s), the remaining areas in Tra Vinh, Ha Tinh and Quang Ninh have lower wind speeds (only 6-7m/s), making it is difficult to compete with wind near shore.

Solar power:

Vietnam leads Southeast Asia in solar energy now and in the future, followed by Thailand, Malaysia, the Philippines, and Indonesia, according to SolarPower Europe (SPE)’s forecast. Vietnam has seen rapid growth in solar energy development in recent years and became one of the leaders in the Southeast Asian solar power market by 2023. Vietnam’s installed solar power capacity reached around 19 GW in 2022.

Decision 13/2020/QD-TTg issued in April 2020, fixed the solar feed-in tariffs (FIT) in Vietnam at 7.09 U.S. cents/kWh for ground mounted plants and 7.69 US cents/kWh for floating plants, while rooftop solar maintains a higher rate of 8.38 US cents/kWh. By the end of 2020, grid-connected solar power sources that had been put into operation were up to about 9,000 MW (of which Ninh Thuan and Binh Thuan provinces are nearly 3.5 GW). The capacity scale of the additional planned solar power projects is over 13 GW, with the total registered construction scale (not yet added) at about 50 GW. However, as noted above, access to transmission capacity has remained a significant challenge for these projects, creating stranded assets. In addition, project developers have faced delays in negotiating power purchase agreements with EVN.

The total technical potential of solar power is very large at up to 1,646 GW (1,569 GW is the ground potential and 77 GW is the water potential). The total scale potential for development of large-scale solar power nationwide is about 386 GW, mainly concentrated in the South, the South-Central region, and the Central Highlands.

Biomass and Co-generation (Sugar):

There are currently approximately 150 MW biomass installations with potential capacity of 500 MW in 2020, and PDP8 projects 2 GW by 2030. At present, most biomass plants in Vietnam are CHP biomass projects which are used for self-generation in sugar mills.

The theoretical potential of biomass energy in Vietnam from the combustion of rice husk, rice straw, corn cob, cassava stalk, bagasse, and sugar cane waste are estimated at more than 2,500 MW.

Vietnam has increased the FIT rates for biomass power to encourage stronger growth and investments in the sector. Combined heat and power (CHP) biomass projects will be awarded 7.03 U.S. cents/kWh (from the previous 5.8 U.S. cents/kWh), and other forms of biomass energy projects will be at 8.47 U.S. cents/kWh.

FDI Encouragement and Challenges

The Government of Vietnam’s policies are to diversify investment sources, encourage foreign investors in power development with BOO and PPP.


The power generation market 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 IPP power projects in the form of BOT, BT, BTO and JV.

The power transmission and distribution market have 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.


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



  • Janice Tran, Commercial Specialist

U.S. Embassy in Hanoi