Vietnam Accelerates Power-Sector Reforms Amid Growing Supply Pressures
Recent weeks have seen a wave of policy activity across Vietnam’s power sector as the government moves to address emerging supply risks and accelerate implementation of the revised Power Development Plan VIII (PDP VIII). With electricity demand projected to grow 10% annually, delays affecting generation and transmission projects, and several LNG projects facing postponement beyond 2030, policymakers are advancing parallel reforms to the legal framework, power-planning process, and electricity market structure.
Amended Electricity Law. A key development is the draft amended Electricity Law, scheduled for final National Assembly approval on November 20. The draft seeks to improve project bankability, reduce implementation bottlenecks, and support the transition toward a more market-based electricity sector. Notable proposals include converting PPAs for generators participating in the competitive market into contracts-for-difference (CfD) arrangements, introducing risk-sharing mechanisms and change-in-law protections, expanding the Direct Power Purchase Agreement (DPPA) framework, and establishing a legal basis for Renewable Energy Certificates (RECs). The draft also promotes more cost-reflective electricity pricing through time-of-use and multi-component tariffs, while streamlining project approvals and permitting BOT-style PPP investment in transmission infrastructure.
Further Revision of PDP VIII. In parallel, the government is undertaking another revision of PDP VIII under an expedited process. The review reflects concerns that generation and transmission projects across multiple provinces have fallen behind schedule, increasing the risk of power shortages in both northern and southern Vietnam during 2027-2030. Current proposals place greater emphasis on project deliverability and energy security, including the possible reintroduction of selected coal-fired power projects, a reassessment of LNG development plans, and increased focus on offshore wind, battery energy storage systems (BESS), and hybrid renewable-energy projects. MOIT is also considering replacing several delayed gas-fired projects with coal-fired capacity to safeguard electricity supply in the coming years.
EVN Restructuring and Transmission Reform. Alongside these reforms, debate continues over the future structure of Vietnam's electricity market. Competing proposals from MOIT and the Ministry of Finance reflect differing views on the pace of market liberalization. MOIT supports the early separation of the National Power Transmission Corporation (EVNNPT) from EVN and the establishment of a competitive retail electricity market by 2030. The Ministry of Finance, however, favors retaining EVNNPT within EVN for the time being, citing financing needs and contractual risks. Although the Government has identified the separation of EVNNPT from EVN as both necessary and a near-term priority, a formal roadmap and implementation timeline have yet to be announced.
Responding to growing energy-security concerns and the need to support Vietnam’s projected double-digit economic growth, policymakers are pursuing reforms aimed at removing institutional bottlenecks, mobilizing investment and accelerating project delivery. Investors should closely monitor upcoming regulatory and policy decisions as the reform agenda continues to take shape.
