Vietnam’s power sector poised to trigger a new investment cycle

According to VNDirect Securities, electricity demand in Vietnam is expected to enter a strong growth phase, forming the foundation for the country’s economic expansion. Foreign direct investment inflows into high-tech manufacturing and data centres will be key drivers of electricity demand growth. Additionally, urbanisation, rising income levels, and electrification trends in transportation and services will boost consumption.

The power sector is continuing policy reforms to achieve the dual objective of ensuring energy supply and meeting environmental commitments. Resolution No.70/NQ-TW emphasises the need for policy reforms to encourage investment in new power capacity such as LNG-to-power and renewables. These reforms are expected to unlock a new investment cycle.

Amid the global energy transition, renewable energy has significant development potential. Alongside this is the growing necessity of gas-fired power as a baseload source gradually replacing coal, and the need for grid infrastructure investment to support expanding system capacity.

Hai Nguyen Ngoc, head of Energy and Chemical at VNDirect Securities said, "Vietnam has strong potential for renewable energy development thanks to rising demand, resource advantages, and the global energy transition. Power Development Plan VIII sets ambitious targets for renewables, aiming for them to account for the largest share (40–47 per cent) of the power mix by 2030. Meanwhile, gas/LNG-to-power will also play an increasingly important role, gradually replacing coal-to-power as a baseload source."

"In addition to external risks such as input price volatility and supply, Vietnam’s power sector still faces internal bottlenecks that need to be resolved to unlock power sector development. These include improving the practicality of policy frameworks and addressing transmission grid constraints."

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