New PDP8 implementation plan brings investment opportunities

April 05, 2024 | 15:40
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On April 1, Deputy Prime Minister Tran Hong Ha approved the implementation updates for Vietnam's Power Development Plan VIII (PDP8), which aims to help build strategic objectives, ensure national energy security, and foster investment across all economic sectors. Senior associate Nguyen Thi Cuc Vi and trainee associate Trinh Linh Chi of Dentons LuatViet explain further.

The plan identifies a robust pathway forward for liquefied natural gas (LNG). According to the list of important power source projects and investment priorities of the industry towards 2030, the total capacity of LNG thermal power projects is 22,400MW. The list also details projects that completed the investor selection procedures, such as LNG plants at Thai Binh, Nghi Son, and Ca Na, with a capacity of 1,500MW each and expected to operation in 2029.

For other LNG projects that have yet to choose their investors, local people's committees will have to complete the investor selection procedure and submit the project's feasibility study report in the second quarter of 2025.

New investment opportunities in the context of the approved PDP8 Implementation Plan
Nguyen Thi Cuc Vi, senior associate, Dentons LuatViet (left) andTrinh Linh Chi, trainee associate, Dentons LuatViet

The transition to solar power projects has seen mixed progress. The new implementation plan lacks a specific schedule for the approved ground-mounted solar power projects regarding planning, investment policies, and investor selection.

Under the plan, local people's committees are assigned to send their plans to the Ministry of Industry and Trade (MoIT), before the ministry submits them to the prime minister for approval. The implementation of these projects is still 'uncertain' and awaiting review by the Ministry of Industry and Trade (MoIT).

Moreover, the status of new ground-mounted solar power projects reflects ongoing uncertainties, despite under PDP8, a total capacity of 10,236MW is structured for this type of project. Consequently, for the period up to 2030, it appears that no new ground-mounted solar power projects are permitted. Beyond 2030, these projects may be implemented in the form of self-production. As of now, the implementation plan only includes self-produced rooftop solar power with a capacity of 2,600MW, concentrated in the large industrial parks of the southern provinces of Binh Duong and Dong Nai.

The implementation plan underlines a significant commitment to both onshore and offshore wind power, with capacities of 6,000MW and 10,102MW, respectively, by 2030. The offshore wind power projects to be located in the north (2,500MW) and the south central (2,000MW) regions are awaiting regulatory clarity, particularly for the adoption of a pilot scheme for offshore wind power development, while onshore wind power demonstrates a clear path forward with a capacity of newly approved projects approximately 10,102MW, accounting for over 46 per cent of the planned capacity (21,880MW). These projects represent a significant investment opportunity as we move towards 2030.

The government wants to prioritise the export of energy, especially from the central and southern regions, emphasising the use of renewable energy, particularly offshore wind power, to produce and export new energy forms like green hydrogen and green ammonia. The MoIT is set to evaluate and report on the feasibility of these projects in terms of technology and cost for the prime minister's consideration.

The plan clearly outlines that all investment capital for power source projects will stem from non-public investment channels. An estimated total of around $71.7 billion is earmarked for the 2026–2030 period, underlining the ambitious scale of the endeavour.

The legal infrastructure supporting these developments is also undergoing significant enhancements. For the 2023-2025 period, relevant ministries and agencies are tasked with revising the Law on Economical and Efficient Use of Energy, the Law on Planning, the Law on Electricity, and associated sanctions to accommodate these changes. This period will also see the establishment of regulations for hydrogen-derived energy, a pricing mechanism for renewable energy power, a carbon market development mechanism, and a direct electricity trading mechanism, paving the way for a robust legal foundation that supports renewable energy expansion.

The implementation plan mandates a study for establishing two inter-regional renewable energy industrial and service centres by 2030. These include a service centre in the north, covering Haiphong, Quang Ninh, Thai Binh provinces, and another in the south central-southern region.

Each centre is poised to become a hub for the manufacturing of renewable energy project equipment, providing seaport and logistics services, supporting research activities, and developing green industrial parks, further emphasising the plan's comprehensive approach to renewable energy development.

In addition to these strategic plans, Deputy Prime Minister Tran Hong Ha also signed Decision No.270/QD-TTg on April 2, approving a list of nationally important energy projects. This includes several LNG power plants and projects aimed at harnessing LNG for power generation, alongside a pilot project for developing offshore wind power, indicating the government's multi-faceted approach to enhancing the nation's energy infrastructure.

In summary, the approval of these decisions lays a solid foundation for the future of renewable energy projects in the country. With the significant investment capital required, vast opportunities in wind power projects, and the development of renewable energy service centres, domestic and foreign investors have much to look forward to in the dynamic landscape of renewable energy development in the coming years.

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By Nguyen Thi Cuc Vi and Trinh Linh Chi

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