Vietnamese power sector is a beacon of prospects

The plan aims to achieve balanced development of power sources across the regions, ensuring supply-demand parameters. It also focuses on maintaining feasibility, synchronisation, and flexibility among various power sources and grid development.

Vaibhav Saxena, lawyer, Vilaf

The plan is committed to tracking progress and resources for implementing priority schemes and projects on refining policies and strengthening the scientific and technological capacity of the entire power industry, with a forecasted land requirement for 90,300 hectares by 2030. It outlines a diverse mix of power sources by 2030, including domestic gas, liquefied natural gas (LNG), coal, co-generation, hydropower, and renewable energy sources such as wind, hydro, biomass, and solar.

The total capacity of these sources is expected to reach significant figures, with coal and hydropower leading the way. From this, it is evident that the government has ambitious plans for the primary period of PDP8 towards 2030, to be revisited on a five-year interval as per the planning laws to be in conformity with the socioeconomic development during each period.

However, targets seem quite challenging when looking to the remaining period, which leaves just over six years for investors to get projects moving, while struggling for financing streams and further expecting policy clarity on certain upcoming policies such as the direct power purchase agreement regime, guidance of rooftop solar, more technically and financing pro sound regulation refinements to support the planned development for wind offshore and LNG-to-power, gas pipelines, pilot projects, and more.

This is including, but not limited to, implementation of the Vietnam wholesale electricity market and auction mechanism to smooth out investor selection. On the sidelines, it appears that the carbon credit market to implement nationally determined contributions and the trading and exchange of renewable energy certificates are stressed by government leaders, whereas, foreign-invested enterprises are under global pressure for green production and environmental, social, and governance compliance by the origin/importing countries.

The PDP8 implementation plan also includes the development of two inter-regional renewable energy industrial and service centres by 2030. This signals that Vietnam is poised to have a significant impact with the integration of renewable energy into its energy mix.

These centres will be located up and down the country, and will also set up equipment manufacturing facilities for renewable energy development, seaport services, logistics for construction, installation, and more. Strategic placement of the centres indicates further energy security boost for the domestic consumption as well as exports, when in parallel running through the coastlines to support territorial limits.

Current investment estimates look appealing, but will need an apt policy plinth to realise the planned potential. Vietnam has already adopted the global minimum tax regime covering both qualified domestic minimum top-up tax and the income inclusion rule, and to compensate for that, the Ministry of Planning and Investment is tasked to formulate support policies in order to keep the investment climate competitive while aligning with macroeconomic spheres.

With the plan, Vietnam does remain optimistic to maintain its power momentum, offering enormous economic and investment prospects. It invites participation from economic stakeholders for energy industry development, promising a bright future for the investors, lenders and the entire industry eyeing for Vietnam to be the new economic hub of Southeast Asia.

On one hand, speedy actions have been taken on a theoretical basis from the policy front. On the other hand, practical implementation is to a greater extent is expected to be explored to achieve the set targets with the teaming up of the relevant stakeholders.

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