Energy transition is becoming one of the central issues of global development. This is no longer just an environmental story, let alone replacing one energy source with another. In the context of increasingly close economic competition with emission standards, green supply chains, energy security and resilience of each country, energy transition has become an inevitable requirement of the development process.
For Vietnam, this requirement becomes even more urgent as the country is entering a new stage of development with a desire for high growth, in which the goal of double-digit growth puts great pressure on the national energy system. Rapid growth requires sufficient electricity, sufficient fuel, stable transmission infrastructure, reasonable energy costs and increasing responsiveness of an industrialized, urbanized, digitalized and green economy. If energy does not go one step ahead, energy will become a bottleneck of growth. But if it only meets energy demand by expanding the traditional fossil fuel consumption model, the economy will face risks of fuel imports, international price fluctuations, inflationary pressure, environmental pollution and reduced export competitiveness.
Therefore, energy transition in Vietnam needs to be viewed more comprehensively. It is not only developing solar power, wind power or increasing the proportion of renewable energy in the power source structure. It is also the process of restructuring the entire energy system: From supply to infrastructure, from electricity to gasoline and oil, from traditional fuels to biofuels such as E10, from production to consumption, from price mechanisms to carbon markets, from state policies to the behavior of businesses and people.
This presentation focuses on clarifying the nature of energy transition in Vietnam in the new period; analyzing the opportunities and challenges posed; and proposing a number of policy requirements to transform energy transition from a pressure to a driving force for development. The core issue is not a choice between growth and energy transition, but how to make energy transition a platform for high, sustainable, self-reliant and more competitive growth.
It can be said that to achieve double-digit growth, Vietnam must ensure that energy goes one step ahead. But energy going ahead is not just about having more capacity, more electricity, more gasoline and oil. Energy going ahead must be a more modern, cleaner, more efficient, more transparent and more resilient system. That is the consistent spirit of energy transition in the new stage: transition to develop, transition to compete and transition to ensure national energy security.
Energy transition is an inevitable trend, Vietnam is not outside that flow.
In the current context, energy transition is no longer just a story of developed countries, nor is it just an environmental issue or a commitment to reduce emissions. This has become a global development trend, directly linked to energy security, national competitiveness, restructuring supply chains, export standards, investment capital flows and new growth models.
The world is witnessing a very profound change in the way energy is produced, distributed and consumed. Many countries are promoting the development of renewable energy, increasing investment in power grids, energy storage, electrification of transportation, biofuels, green hydrogen, and using energy economically and efficiently. Large export markets are increasingly considering carbon emissions as a competitive criterion. A product is not only evaluated by price, quality, and design, but also by the amount of carbon emissions in the production, transportation and consumption process.
In that trend, Vietnam cannot stand aside. An economy with great openness, heavily dependent on exports, moving towards modern industrialization and high growth targets cannot continue to develop based on the old energy model: consuming a lot of fossil fuels, low energy efficiency, slow grid upgrades, the energy market is not really transparent and heavily dependent on fuel imports.
Energy transition, therefore, is not a slogan. The nature of energy transition is to shift from an energy system mainly based on fossil fuels, high emissions, low efficiency to a multi-energy system, cleaner, more efficient, more flexible, more resilient and better serving sustainable development.
In short: Energy transition is not just replacing coal with wind power, replacing gasoline with electric vehicles, or installing more solar power. It is a process of restructuring the entire energy system, from supply, infrastructure, technology, market, prices, consumption to the behavior of businesses and people.
Vietnam's energy transition content is not just about electricity
When it comes to energy transition, we often immediately think of electricity: solar power, wind power, gas power, hydropower, electricity transmission, electricity market. That is true but not enough. Electricity is the center of energy transition, but not the entire energy transition. For Vietnam, the content of energy transition needs to be viewed on at least six pillars.
The first is the shift in the power source structure. Vietnam needs to gradually reduce dependence on coal-fired power, rationally develop renewable energy, gas power, recharging hydropower, storage batteries, offshore wind power, and self-produced and self-consumed rooftop solar power. But this process must be implemented according to a cautious, scientific, and not extreme roadmap. The goal is not to immediately eliminate a particular energy source, but to ensure sufficient electricity, system stability, reasonable costs and gradually reduce emissions.
Second is the shift in energy infrastructure. If electricity sources develop rapidly but the power grid cannot keep up, renewable energy can also be cut, causing social waste. Therefore, the transmission grid, distribution grid, calibration system, energy storage and digital technology must go one step ahead. Energy shift cannot only be invested in power plants, but must also invest in the "brain" and "blood vessels" of the power system.
Third is the shift in the use of gasoline, oil and transport fuel. This is a very important point. Vietnam cannot understand that energy transition is just a story of the electricity industry, while transportation still consumes a large amount of traditional gasoline and oil. Encouraging the use of E10 bio-gasoline is a specific example. E10 is gasoline with ethanol fuel blending at a rate of about 10%. If deployed methodically, E10 can contribute to reducing part of the dependence on mineral gasoline, creating output for domestic biofuels, reducing relative emissions in transportation and promoting a habit of using cleaner energy.
However, E10 cannot be successful if only an administrative roadmap is issued. The important thing is to ensure fuel quality, blending capacity, distribution system, vehicle inspection, and clear communication so that people understand, businesses are assured, and the market operates smoothly. The lesson from E5 gasoline in the past shows that a correct policy may still not meet expectations if there is lack of market trust, lack of transparent communication, and lack of clear benefits for consumers.
Fourth is the shift in energy consumption of businesses and households. Energy saving must be considered a "first source of energy". In many cases, saving one kWh of electricity is much cheaper than building an additional kWh of new capacity. Businesses should be encouraged to invest in energy saving technology, energy audits, load management, using rooftop solar power, replacing outdated equipment. People should be encouraged to use high-performance equipment, self-using rooftop solar power, fuel-efficient vehicles and gradually switch to green vehicles.
Fifth is the shift in the market mechanism and energy prices. A modern energy system cannot operate effectively if electricity prices, gasoline prices, gasoline prices, transmission costs, contingency costs and environmental costs are not reflected relatively fully and transparently. Energy prices must both ensure social security and create correct signals for investment, savings and technological innovation. If energy prices are compressed for too long, the market will lack investment motivation; if adjusted too strongly and without a roadmap, businesses and people will suffer a cost shock. Therefore, energy price reform must be accompanied by protecting vulnerable groups with target policies.
Sixth is the shift in emission management and carbon market. In the near future, businesses not only need stable electricity and reasonable prices, but also need to prove that products are produced from cleaner energy with lower emissions. Therefore, emission measurement, reporting, and appraisal systems; renewable energy certificates; carbon markets; green finance and ESG standards will become an inseparable part of energy transition.
Thus, Vietnam's energy transition must be a comprehensive process: from electricity to gasoline and oil, from supply to consumption, from infrastructure to market, from technology to institutions, from environmental goals to national competitiveness requirements.
The two-digit growth requirement puts greater pressure on energy shifts.
Vietnam is entering a new stage of development with a desire for high growth. The goal of double-digit growth is not just an economic indicator, but a requirement to shorten the development gap, increase income, expand industrialization space and bring the country closer to the goal of high income.
But double-digit growth means that energy demand is increasing very strongly. Processing and manufacturing industries, industrial parks, new urban areas, data centers, logistics, electrified transportation, digital economy, green production all need electricity, fuel and stable energy infrastructure. If energy does not go one step ahead, growth will encounter a "bottleneck" right from the most basic input.
The problem is that Vietnam cannot meet rapidly increasing energy demand simply by exploiting, importing and burning more fossil fuels. That approach can solve short-term needs, but will create long-term risks: dependence on fuel imports, fluctuations in international prices, inflationary pressure, environmental pollution, high carbon emissions and reduced competitiveness of exported goods.
Therefore, in the context of double-digit growth, energy transition becomes even more urgent, not slowing down. High growth is not contradictory to energy transition. Conversely, to achieve high and sustainable growth, energy transition must be faster, more methodical and more substantive.
The key point is that the transition must ensure three goals at the same time: sufficient energy for development, reasonable energy prices for businesses and people, and at the same time gradually reduce the emission intensity of the economy. If only focusing on reducing emissions but lacking electricity, the economy will be hindered. If only worrying about having enough electricity at all costs but ignoring emissions and efficiency of use, Vietnamese goods will lose their advantage in the green supply chain. If only keeping prices low in the short term without creating investment signals, the energy system will lack resources to expand and modernize.
Vietnam's opportunities in energy transition
Energy transition poses great pressure, but at the same time opens up very important development opportunities.
First of all, this is an opportunity for Vietnam to upgrade its growth model. A high-growth economy cannot only rely on cheap labor, resources and expand investment capital. Energy transition forces businesses to innovate technology, save energy, better cost management and participate more deeply in the green value chain. That is the path to improving productivity.
Second, energy transition opens up opportunities to attract green investment. Global capital flows are shifting strongly to renewable energy, grid, energy storage, clean fuel, green transportation, and energy-saving technology. Vietnam, if it has a clear, stable and transparent mechanism, can attract large capital for new energy infrastructure, especially in the context that international commitments such as JETP have created an important cooperation platform.
Third, this is an opportunity to develop new industries. Energy transition not only creates more power plants, but also creates markets for electrical equipment, storage batteries, mechanical engineering for wind power, technical services, carbon consulting, energy auditing, green finance, energy management software, new materials and high-tech human resource training.
Fourth, energy transition helps improve export competitiveness. As major import markets increasingly value carbon standards, businesses capable of using clean electricity, clean fuel, and transparent emission management will have an advantage. Conversely, if transition is delayed, businesses may face carbon costs, technical barriers, and the risk of losing orders.
Fifth, energy transition can be linked to the benefits of people. Self-use rooftop solar power helps reduce electricity costs; energy-saving equipment helps reduce bills; biofuel, fuel-saving vehicles and green transportation help reduce pollution; efficient energy-using urban areas help improve quality of life.
The biggest challenges are institutions, infrastructure and market confidence
Although the opportunity is very large, energy transition in Vietnam is not easy. Some fundamental challenges can be pointed out.
The first challenge is that the transitional thinking is still not really complete. Sometimes we unify energy transition with the development of renewable electricity. Sometimes we worry that energy transition will increase costs and affect growth. Both viewpoints are not comprehensive. True energy transition must both ensure energy security, promote growth, reduce emissions, and improve energy efficiency.
The second challenge is that infrastructure has not kept up. Transmission grid, storage system, gasoline and oil storage, biofuel blending infrastructure, electric vehicle charging stations, energy consumption data and carbon market infrastructure all need to be synchronously invested. Without infrastructure, good policies are also difficult to put into practice.
The third challenge is that the price mechanism and market are still slow to innovate. To mobilize private capital and international capital, investors need to see stable cash flow, reliable contracts, reasonable risk allocation and transparent price mechanisms. This is true for renewable electricity, gas power, grid, energy storage, as well as biofuels such as E10.
The fourth challenge is consumer confidence. With E10, the important lesson is that people need to be clearly explained: What is E10, is it suitable for vehicles or not, how is quality controlled, what is the price, what are environmental benefits and economic benefits. If consumers are still concerned, the market will find it difficult to transform strongly even though policies are already in place.
The fifth challenge is the requirement for fairness in transition. Industries, localities and groups of workers associated with traditional energy may be affected. Therefore, energy transition must be accompanied by labor retraining, livelihood transformation, development of new occupations and ensuring social security.
Some policy requirements in the new period
To make energy transition truly a driving force for the two-digit growth target, I think it is necessary to focus on some of the following policy requirements.
First, clearly define energy transition as a development strategy, not just an environmental policy. All plans on electricity, gasoline, oil, gas, transportation, industry, urban areas and agriculture need to be placed in a common whole on energy security and emission reduction.
Second, ensuring electricity goes one step ahead for high growth. Power source planning must be linked to power grid planning, energy storage, system regulation and actual load demand of industrial, urban, logistics and data centers.
Third, develop renewable energy in a stable, controlled and market-based direction. It is not advisable to develop rapidly, nor should it slow down due to previous obstacles. It is necessary to have a transparent bidding mechanism, sufficiently reliable electricity purchase and sale contracts, a direct electricity purchase and sale mechanism, develop self-produced and self-consumed rooftop solar power and encourage energy storage.
Fourth, bring gasoline and biofuels into the center of energy transition. The E10 roadmap needs to be implemented methodically, with good communication, strict quality control, ensuring mixing and distribution capacity. At the same time, E10 needs to be linked to the development of raw material areas, biofuel industry, gasoline and oil security and the goal of reducing emissions in transportation.
Fifth, consider energy saving as a strategic solution. It is necessary to promote mandatory energy audits for key energy-using facilities, apply minimum efficiency standards, encourage equipment innovation, manage peak hour loads and use digital technology in energy management.
Sixth, reform energy prices in a transparent, roadmap-based direction and protection for vulnerable groups. Electricity prices, gasoline prices, gas prices and related costs need to reflect more accurately market signals, but must be accompanied by target support policies for the poor, low-income people and vulnerable groups.
Seventh, develop a carbon market and a clean energy certification system. These are conditions for Vietnamese businesses to prove their green production capacity, meet the requirements of the export market and avoid being passive in the face of international carbon barriers.
Eighth, enhance the State's coordination responsibility. Energy transition involves many ministries, sectors, localities and businesses. Therefore, a strong enough coordination mechanism, unified data, clear responsibilities and serious implementation inspection are needed.
Conclusion
Energy transition is a common trend in the world and Vietnam is no exception to that trend. But Vietnam needs to have a way of doing things that suits its conditions. We cannot transition by movement, nor can we transition by mere administrative orders. Energy transition must be based on science, market, technology, infrastructure, institutions and social consensus.
In the new period, the content of Vietnam's energy transition must be understood more broadly: not only electricity, but also gasoline and oil, biofuels such as E10, green transportation, energy saving, carbon market, energy prices, reserve infrastructure, smart grids and the consumption behavior of the whole society.
If done correctly, energy transition will not be a cost burden. On the contrary, it is a driving force for Vietnam to upgrade its growth model, reduce dependence on imported fuels, increase business competitiveness, attract green investment, expand new industries and ensure national energy security.
To achieve two-digit growth, energy must go one step ahead. But energy ahead is not just about having more electricity, more gasoline, more capacity. Energy ahead must be a more modern, cleaner, more efficient, more transparent and more resilient energy system. That is the nature of energy transition in the new stage: transition to develop, transition to compete, transition to ensure national security and transition to improve the quality of life of people.
