Adoption of Power Development Plan VIII – Implementation Measures

   

In the PDP8, the Vietnamese government recognizes the importance of a well-functioning energy sector for the overall development of the country. The PDP8 is guided by principles of competition and market mechanisms determining the electricity prices. This is important as up to now, at least the Vietnamese energy distribution sector was liberalized and subject to market mechanisms. 

   

The PDP8 also prioritizes the development of renewable energy sources for electricity production. This power source will reach the rate of about 30.9 - 39.2 percent by 2030 and raise to 67.5 - 71.5 percent by 2050.

    

To achieve the stated goals, it is estimated that the total investment needed to develop power sources and transmission networks in the period of 2021 - 2030 will amount to approximately $134.7 billion. Looking ahead to the period from 2031 to 2050, this estimated investment capital ranges from $399.2 billion to $523.1 billion.

      

This is important in the light of the net zero carbon emission target by 2050 to which Vietnam has recently subscribed and the fact that Vietnam – similar to many other countries – still heavily relies on fossil fuels for energy generation. Finally, the requirement for investment in the electricity grid has also been recognized to remove a major obstacle in respect of the transition to renewable energies. 

    

The Ministry of Industry and Trade together with other ministries and branches are assigned to finalize and submit to the Government the revised Electricity Law and the Law on Renewable Energy for submission to the National Assembly in 2024.

    

The Ministry of Industry and Trade is also as-signed to (i) submit to the Government policies on direct electricity purchase and sale, (ii) work with investors to progress and finalize projects that are having difficulty in implementation, and (iii) report to the Prime Minister any issues beyond their authority.

    

In conclusion, though the PDP8 provides a specific development orientation for the electricity industry, we still must wait for detailed implementation plan from the Ministry of Industry and Trade and relevant agencies to have enough grounds for performance in practice. Nevertheless, companies interested in doing business in the renewable energy sector in Vietnam should start analyzing the market and the technical and regulatory  (including tax incentives) frameworks now, so they are ready to take action, as soon as implementation plans are in place.