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

This is a best prospect industry sector for this country. Includes a market overview and trade data

Last published date: 2021-09-15


Industry Structure

Electric power represents one of the most promising areas for U.S. commercial prospects in Vietnam. 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 Energy, under the MOIT, which 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 Ministry of Industry and Trade of Vietnam (MOIT) released the draft proposal for the national power development plan for the period of 2021 - 2030 with a vision to 2045 (Draft PDP8).

Power Consumption

The country’s robust industrialization process has fueled a surging demand for energy in general and 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 percent annually through 2030, one of the fastest power consumption growth rates in Asia. 

Vietnam’s Ministry of Industry and Trade (MOIT) forecasted that localized power shortages in the manufacturing hub of Ho Chi Minh City is expected beginning in 2021, and that by 2030 it will lack more than 10,000 megawatts (MW) or 7.5 percent 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

According to IEV’s report in March 2021, installed power-generation capacity in Vietnam is approximately 56,000 MW (56 GW). The Vietnamese electricity system has a total installed power source capacity of about 69GW (including hydroelectric plants imported from Laos and rooftop solar power)

In the capacity structure of the national power source in 2020, coal-fired power accounts for about 34 percent, hydroelectricity accounts for 30 percent, gas turbines and oil-fired thermal power accounts for 15 percent, and solar power (including rooftop solar power) accounts for 24 percent, wind power 1 percent, biomass power about 1 percent, import of hydroelectricity from Laos accounts for 1 percent. The total number of power plants in operation is about 162 (excluding small hydropower plants and renewable energy). Maximum load capacity of the power system in 2020 is about 38.7 GW, The crude reserve ratio of the power system (excluding wind and solar power) is 34.3 percent.

In March 2020, Vietnam’s Politburo (the highest body of the Communist Party of Vietnam) issued Resolution 55 on Strategic Energy Orientation until 2030 with vision 2045. Which underlined that installed capacity by 2030 is expected to be 125-130GW, adoubling of its capacity in 10 years.

Accordingly, electricity capacity is expected to increase by an annual average of 5.7 percent between 2021 and 2030, totaling 129.5GW by 2030. It also sets out USD 148 billion worth of investments to increase power generation and develop the electricity network, of which 74 percent is to be directed to power sources and 26 percent to grid development for 2021 – 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 is likely to threaten hydropower generation output for years to come.
  • Coal thermal power: Vietnam is seeking to reduce coal-fired thermal power from 34 percent of its power source in 2020 to 27 percent 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 by the country. However, during this period, there will be no additional development of new coal-fired thermal power. The Draft PDP8 suggested that only on-going coal-fired thermal projects currently under construction and under investment promoted for operation during the 2021-2025 period is included in the PDP8.
  • Renewables: Currently limited and fluctuates due to an underdeveloped grid capacity and a prevalence of baseload thermal sources.
  • Nuclear Power: In November of 2016, the Vietnamese government postponed its nuclear power program.

Electricity Pricing

The government strictly regulates the retail price, recommended by MOIT and requiring 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 IPP projects, MOIT and EVN have been working on a roadmap for price increases and the gradual elimination of government control. By current regulations, EVN may 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 percent, EVN can raise prices up to 10 percent, and increases of more 10 percent 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 percent 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. Tt is estimated that EVN’s power generation in 2020 only accounted for about 13 percent of the total capacity of the power source, while the proportion of power capacity privately owned has reached about 38 percent, accounting for the highest proportion in the owner structure.

Currently only one U.S. company, AES Corporation, is an IPP and has invested in Mong Duong 2 Power Plant in Quang Ninh Province. This is a USD 2.1 billion coal-fired power plant with a capacity of 1,240 MW. Mong Duong 2 is the largest foreign invested power project in Vietnam and the country’s first private power plant commissioned in the last ten years, per Vietnam Investment Review.

Transmission and Distribution

The Vietnamese government shall only maintain its monopoly of electricity transmission grid(s) to ensure the national energy security. Vietnam’s existing energy infrastructure is inadequate with weak grid capacity, which will obstruct the integration of new capacity, particularly from renewable energy projects. According Vietnam’s National Power Transmission Corporation (EVNNPT), an EVN subsidiary, which 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). The EVN reported that 100 percent of the districts were connected to electricity; 99.7 percent of the communes with 98.69 percent of rural households have access to the power grid with a target reaching close to 100 percent by 2020. These figures may be exaggerated but were according to the plan.

In the PDP8, the MOIT proposds 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 to support the North-Central-South power transmission. Power transmission by one-way lines have also been  studied and considered in the PDP8.

Accordingly, in the period between 2021- – 2030, the country will need to need to build a total of about 86 GVA capacity of 500kV station and nearly 13,000 km of DMZ. In the period between 2031 - 2045, it will be necessary to build more approximately 103 GVA with capacity of 500kV station and nearly 6,000 km of NE. The 220kV power grid needs to build 95 GVA, nearly 21,000 km DMZ and 108 GVA, more than 4,000 km DM. With this grid development program, Vietnam’s power grid initially meets N-1 criterion for power supply for loads and N-2 criterion for particularly important loads. The application of a smart grid and technology 4.0 in power transmission is also being researched and proposed for electricity planning.

Leading Sub-Sectors

Transmission & Distribution

The national transmission infrastructure is struggling to keep pace with the rapid capacity growth, which presents a risk of bottlenecks to growth. This is mainly because of the surge in renewables, which typically takes a much shorter time to build as compared to a transmission line. The National Load Dispatch Center has been lowering output from hydropower plants to prioritize solar integration and prevent a grid overload. EVN has been constructing and upgrading 21 transmission lines since the 2019 to ensure smooth integration of more renewable sources.

Under the draft PDP8, the MOIT estimates the need for USD 32.9 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. The ministry is also trialing the application of smart grids and 4.0 technology into the transmission network.

The U.S. Trade and Development Agency (USTDA) has granted $935,000 the National Power Transmission Corporation (EVNNPT) to modernize the firm’s information technology, communications and power transmission systems, and enable future smart grid investments.

EVNNPT’s Projected Expansion of the Power Transmission System to 2025: the firm completed the upgrade of its power grid and reached the N-1 reliability standard for key equipment items in 2020. Vietnam’s government remains strongly committed to improving the grid infrastructure to offer many opportunities for transmission and distribution sectors across the country.

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.

Apart from that, on the investment front, the MOIT is working on  a draft PPP proposal to allow private investments into transmission lines and substations. If this come into place, the upcoming PPP bill for the T&D sector will encourage more growth and opportunities for investors along the government’s commitment to develop and improve grid infrastructure, in order to support continued power expansion across the country, and integrate the unstable nature of renewables.

Liquified Natural Gas (LNG)-to-Power

Natural gas will also remain a key source of power generation for Vietnam at seven GW in 2020 to 13.5 GW in 2025 and 28-33 GW in 2030, bringing it from 15 percent in 2020 to 21-23 percent in 2030 with a more substantial growth as more LNG terminals enter into 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

The PDP8 prioritizes the development of solar and wind power sources in large scale (with the capacity of wind power sources being tripled and the capacity of solar power beinge doubled in comparison with the capacity under the current Revised PDP7).

The ratio of renewable energy (excluding hydropower) in the PDP8 has increased to almost 30 percent in 2030, while such ratio in the amended PDP7 was only at 16.3 percent. A study by the World Bank estimated that 8.6 percent 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 2-3GW, solar power will develop an additional capacity of 7GW, biomass power will be reduced by 0.5 GW, and small-scaled hydropower will be reduced by 1.8 GW.

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

The Vietnamese government has also proposed several policies in recent months to boost the development of the wind energy sector. The current FiTs for offshore wind is highly attractive at 9.8 US cent/kWh which were increased from the previous rate of 7.8UScent/kWh.   Because of difficulties caused by he COVID-19 pandemic the FiT was extended from the original COD deadline in November 2021 to the end of 2023.

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:

Decision 13/2020/QD-TTg issued in April 2020, fixed the solar FiT in Vietnam at 7.09 U.S. cents/kWh for ground mounted plants and 7.69 U.S. cents/kWh for floating plants, while rooftop solar maintains a higher rate of 8.38 U.S. 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 3.5GW). The capacity scale of the additional planned solar power projects is over 13GW, with the total registered construction scale, but not yet added, at about 50GW.

The total technical potential of solar power is very large at  up to 1646GW (1569GW is the ground potential and 77GW is the water potential). The total scale potential for development of large-scale solar power nationwide is about 386GW, mainly concentrated in the South, the South Central region, and the Central Highlands.

Rooftop Solar: Due to the attractive FiT, EVN announced in January 2021 that Vietnam had installed more than 9GW of rooftop solar in 2020, with a majority of it installed in December 2020 alone. This is significantly higher than market expectations, as investors rushed to complete their projects before the commercial operational deadline of December 31, 2020 to attain the stated FiTs for rooftop solar projects.

Biomass and Co-generation (Sugar):

  • There are currently approximately 150MW biomass installations with potential capacity of 500MW in 2020, and its anticipated there will be 2,000MW 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 is 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.
  • The geothermal potential is 340 MW.
  • 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.

For renewable power sources, the government has launched the Direct Power Purchase Agreement (DPPA) pilot program, where renewable energy producers can sell and deliver electricity directly to corporate customers. The size of the DPPA program is expected to range from 400 to1,000MW, and will be implemented nationwide from 2020 to2022. It is available for wind and solar producers with a capacity greater than 30MW and consumers in industrial manufacturing purchasing electricity at a voltage level of 22 kV or larger. These developments would encourage further growth and investment in the sub-sector.


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.

USTDA has funded nearly 80 activities valued at USD 20 million in Vietnam over the last 20 years. Vietnam represents the agency’s largest country portfolio in Southeast Asia. Through feasibility studies, technical assistance and pilot projects, the USTDA Project Development Program helps oversee project sponsors, identify technological solutions, and various sources of financing for priority infrastructure projects. Working with Electricity Vietnam (EVN) and its subsidiary the National Power Transmission Corporation (EVN-NPT), USTDA is supporting the development of an nformation technology and smart grid roadmap.

U.S. companies will find significant business opportunities in the above market segments, including:

  • Equipment sales for ongoing and upcoming power generation projects, and 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.

  • Electricity of Vietnam Group (EVN)
  • Ministry of Industry and Trade
  • PetroVietnam Power Corporation (PV Power
  • Vietnam National Coal - Mineral Industries Holding Corporation Limited (VINACOMIN):
  • Vietnam National Power Transmission Corporation (NPT)
  • FitchSolutions
  • Vietnam Energy Association

For more information please contact:

  • Nam Tran, Commercial Specialist

U.S. Consulate General in HCMC