From its double-digit growth target to its aspiration of becoming a developed, high-income nation by 2045, Vietnam is facing the need to accelerate the development of new growth drivers. Politburo Resolution No. 70-NQ/TW, dated August 20, 2025, on ensuring national energy security to 2030, with a vision to 2045, has identified the importance of the energy sector for socio-economic development, national defense and security, and social welfare.
At the “Energy Transition – A Driving Force for Double-Digit Growth Targets” workshop, organized by the Ministry of Industry and Trade (MoIT) in coordination with relevant agencies on June 9, Associate Professor Ngo Tri Long, Economic Expert at the Vietnam Financial Consulting Association, said that in the current context, energy transition has become a global development trend, directly linked to energy security, national competitiveness, supply chain restructuring, export standards, investment flows, and a new growth model.
Securing the energy future
Over the years, Vietnam’s economic growth rate has consistently remained high compared to other countries in the region and around the world. Accordingly, the demand for energy in general and electricity in particular has also increased rapidly.
Regarding institutional reform, the MoIT advised the National Assembly (NA) to enact the amended Law on Electricity in November 2024, and simultaneously developed guiding documents under the Law. This is an important foundation for perfecting mechanisms and policies for the electricity and renewable energy sectors, especially offshore wind power.
Regarding electricity development planning, the MoIT has coordinated with ministries, sectors, and localities to implement the Project to Adjust the Power Development Plan VIII (PDP8), prioritizing the development of green and clean energy sources and efficiently exploiting domestic energy potential. The goal is to ensure electricity supply for socio-economic development, while reducing emissions and enhancing national energy self-reliance.
Regarding mechanisms to promote investment, the Ministry has advised the government to submit Resolution No. 253/2025/QH15 on mechanisms and policies for national energy development in the 2026-2030 period to the NA, aiming to remove institutional bottlenecks from the past, build mechanisms and policies to promote the development of power projects, and ensure energy security in the 2026-2030 period.
Specifically for 2026, Mr. Trinh Quoc Vu, Deputy Director General of the Electricity Department at MoIT, said the Ministry has developed three scenarios. The baseline scenario forecasts a 5.5 per cent increase in load compared to 2025. The operational scenario forecasts a load increase of up to 11.7 per cent, and the contingency scenario forecasts a load increase of up to 14.1 per cent compared to 2025.
He added that the Resolution of the 14th National Congress of the Communist Party of Vietnam sets a target of economic growth of 10 per cent or more a year during the 2026-2030 period, so ensuring sufficient electricity supply for socio-economic development plays an extremely important role. “Under the guidance and direction of the government and various ministries, departments, and localities, we have basically ensured sufficient electricity and energy supply for the country’s economic development in the past,” he said.
In the time to come, the MoIT will continue to research and review amendments to certain articles of the Law on Electricity and issue detailed guiding documents to institutionalize the new and important policies of the Party in Politburo Resolution No. 70, which is expected to be submitted to the National Assembly for promulgation this year.
Range of challenges
Vietnam’s energy transition process still has many limitations. The existing power grid is severely overloaded and lacks synchronization. As of the end of 2025, the total national power generation capacity was expected to have reached approximately 87,600-95,000 MW, of which renewable energy (excluding large hydropower) is expected to account for 27-28 per cent, equivalent to more than 24,000 MW. Many provinces in the central and southern regions, such as Khanh Hoa and Lam Dong, frequently have to reduce renewable energy output by 20-30 per cent or even up to 50-60 per cent during certain hours or when the weather changes suddenly.
This creates a paradox, according to Dr. Nguyen Xuan Quang from the Institute of Energy Technology at the Hanoi University of Science and Technology. “Vietnam has clean energy sources but cannot transmit all of them to the grid, leading to wasted resources and reduced investor confidence,” he said.
In addition, the policy mechanisms are unstable and inconsistent. According to the Institute, the initial success of the preferential electricity purchase price mechanism with the Feed-in Tariff (FIT) pricing system contributed to the boom in solar and wind power. However, this rapid development has also revealed many shortcomings. The power system has not had time to prepare in terms of grid and dispatching, leading to many projects having to reduce output despite having completed investment. After the FIT mechanism ended, many transitional projects continued to face difficulties in determining electricity selling prices.
Financial challenges are fundamental issues determining the success of the energy transition process. According to the revised PDP8, the total investment capital required for power generation and transmission grids in the 2026-2030 period is estimated at $136-150 billion. On average, the power sector needs to mobilize $27-30 billion annually, equivalent to about 6-7 per cent of Vietnam’s current GDP. This capital must be invested in the development of renewable energy sources.
Meanwhile, Mr. Quang said, the commitment under the Just Energy Transition Partnership (JETP), worth $15.5 billion, is progressing slowly, with only a small portion disbursed. High domestic borrowing interest rates, exchange rate risks, and production cuts are making many projects less attractive. Foreign investors often require that power purchase agreements (PPAs) meet conditions that facilitate access to funding from international financial institutions. Furthermore, the trend of reduced financing for fossil fuels from international financial institutions is putting significant pressure on coal and natural gas power projects.
Under the guidance and direction of the government and various ministries, departments, and localities, we have basically ensured sufficient electricity and energy supply for the country’s economic development in the past.“
- Mr. Trinh Quoc Vu, Deputy Director General of the Electricity Department at the Ministry of Industry and Trade.
Proposed solutions
Vietnam’s energy transition is at a critical stage. To effectively implement the set goals and meet the growth needs for socio-economic development of the country, Mr. Vu said several important solutions are needed, including continuing to improve mechanisms and policies to create a favorable environment for the implementation of power projects; regularly urging localities to support and facilitate investors in implementing projects within their areas, ensuring the set deadlines are met; diversifying capital sources and forms of capital mobilization, effectively attracting domestic and foreign capital; and encouraging all economic sectors to participate in investing in the power sector.
“With these comprehensive solutions, from the legal framework for power development to project investment implementation, I believe that investors will have sufficient legal framework to implement power projects in general, and renewable energy projects in particular, to realize Vietnam’s sustainable energy development strategy,” he added.
Mr. Quang also proposed accelerating investment in the power grid and energy storage systems, perfecting the electricity market mechanism, promoting the implementation of the JETP, and developing flexible power sources. At the same time, it is necessary to enhance energy efficiency, synchronously plan electricity and transportation, reform electricity pricing, and focus on training human resources for a just energy transition.
“With its abundant potential and favorable geographical location, Vietnam can absolutely become a renewable energy hub in Southeast Asia,” he said. “The energy transition is not only a responsibility to the environment but also a crucial opportunity for sustainable economic development and ensuring long-term energy security for the country.”
On the other hand, Mr. Long pointed out that energy transition must be based on science, markets, technology, infrastructure, institutions, and social consensus. In this new phase, the content of Vietnam’s energy transition must be understood more broadly: not just electricity, but also petroleum, biofuels like E10, green transportation, energy efficiency, carbon markets, energy prices, storage infrastructure, smart grids, and the consumption behavior of the entire society.
“If done correctly, energy transition will not be a cost burden,” he believes. “On the contrary, it will be a driving force for Vietnam to upgrade its growth model, reduce dependence on imported fuels, increase the competitiveness of businesses, attract green investment, expand new industries, and ensure national energy security.”
Linh Ngoc
