At the Workshop "Energy Transition - Driving Force for Two-digit Growth Goals" co-organized by Lao Dong Newspaper and the Ministry of Industry and Trade on June 9, Dr. Nguyen Xuan Quang - Institute of Energy Technology (Hanoi University of Science and Technology) - said that Vietnam is entering an important stage of the energy transition process, when the challenges are no longer limited to attracting investment or choosing technology, but have shifted to the problem of operating a safe, stable and efficient electricity system in the context of the increasing proportion of renewable energy.
According to Dr. Quang, with great potential in solar power, wind power, hydropower and biomass, Vietnam has gone through a boom in renewable energy development from 2019 to 2021. However, this process is facing many systemic difficulties, directly affecting the implementation of the adjusted Power Plan VIII as well as the goal of ensuring national energy security.
Power grid infrastructure and policy mechanisms still have many shortcomings
One of the biggest challenges today is that the power grid infrastructure has not kept up with the development speed of renewable energy sources. Vietnam's electricity system is designed for traditional centralized power sources, so it is not ready to receive a large amount of scattered and weather-dependent renewable power sources.
By the end of 2025, the total power source capacity nationwide will reach about 87,600 - 95,000 MW, of which renewable energy (excluding large hydropower) accounts for about 27-28%, equivalent to more than 24,000 MW. However, in many localities such as Ninh Thuan, Binh Thuan, the overload of the power grid has caused many factories to cut production from 20-30%, even up to 50-60% at some times.
According to Dr. Quang, the current paradox is that Vietnam has clean electricity but cannot transmit it all to the system. This causes waste of social resources and affects the confidence of investors in the field of renewable energy.
In addition, the investment progress of new power grid projects is still slow due to difficulties in site clearance and capital mobilization. Although the adjusted Power Plan VIII sets an investment target of more than 18 billion USD for the power transmission system, the gap between the plan and actual implementation is still quite large.
Another bottleneck lies in the policy mechanism. Dr. Quang said that the preferential electricity purchase price (FIT) mechanism once created a strong driving force for the development of solar and wind power. In just a few years, Vietnam's solar power capacity has increased from nearly 0 to more than 16 GW. However, when this mechanism ended, many transitional projects faced difficulties in determining electricity selling prices, while new regulations were not yet synchronously completed.
The shift to the bidding mechanism and new electricity purchase and sale contracts has created legal loopholes, causing many projects to be stalled or delayed. Meanwhile, the adjusted Power Plan VIII sets very high goals for the development of wind and solar power by 2030, requiring policies to be completed soon to create a stable investment environment.
Financial problem, system regulation and the need for comprehensive transformation
According to Dr. Nguyen Xuan Quang, financial challenges are a fundamental issue for the energy transition process. Power Plan VIII adjusts the estimated total capital demand for power source and grid development in the 2026-2030 period to about 136-150 billion USD, equivalent to 27-30 billion USD per year.
This capital is not only for wind power and solar power projects but also serves the construction of transmission systems, LNG gas power centers, energy-intensive hydropower, energy storage systems and smart grids.
Meanwhile, capital mobilization still faces many difficulties due to high interest rates, exchange rate risks and capacity cuts at renewable energy projects. International investors also require a more transparent mechanism to minimize risks in the project implementation process.
Notably, Dr. Quang believes that the biggest technical challenge today lies in balancing and regulating the power system as the proportion of renewable energy is increasing. Solar and wind power depend heavily on weather conditions, so output fluctuates continuously by time and season.
The electricity system must always ensure a supply-demand balance in real time. When the sun sets or the wind suddenly decreases, the system needs to immediately have a replacement power source to maintain stable frequency and voltage" - Dr. Quang analyzed.
This makes base power sources such as coal-fired power and gas-fired power operate more flexibly, frequently increasing and decreasing capacity to compensate for the fluctuations of renewable energy. As a result, operating costs increase, leading to pressure to increase electricity prices in the future.
In addition, the process of transportation electrification also poses new requirements for the national power system. When the number of electric vehicles increases rapidly, electricity demand will increase significantly, especially during peak hours of battery charging. This requires synchronous planning between the electricity and transportation sectors, along with the development of smart load management solutions.
To remove the current difficulties, Dr. Nguyen Xuan Quang proposed to accelerate investment in power grid infrastructure and energy storage systems; complete the Electricity Law towards marketization; reform the electricity price mechanism; develop flexible power sources such as gas power; and at the same time increase energy saving and efficiency use.
According to Dr. Nguyen Xuan Quang, with abundant renewable energy potential and favorable geographical location, Vietnam has every opportunity to become the renewable energy center of Southeast Asia. However, to realize this goal, synchronous coordination between the State, businesses and financial institutions is needed to remove existing bottlenecks, creating a foundation for green growth and sustainable development in the coming decades.
