I. T'NGQuAN
1.1 Raising the issue
Climate change has become the biggest global challenge in the 21st century, requiring every country to transform its growth model towards low emissions and efficient use of resources. In that context, energy conversion, especially from fossil fuels to renewable energy, is considered a key solution to reduce greenhouse gas (GHG) emissions, ensure long-term energy security and build a green, sustainable economy.
Vietnam has shown a strong determination to participate in this trend through the commitment at COP26 to achieve net emissions of 0 by 2050. At the same time, the Government has approved the adjusted Power Plan VIII in April 2025, setting a target of 36% of renewable energy capacity (NLTT) and about 3335% of renewable energy in electricity output by 2030. This is an important turning point, demonstrating the shift from traditional energy models to green, sustainable energy.
However, achieving these goals is a complex process, requiring a comprehensive restructuring of the national energy system: from planning, investment, operation to market and consumption. Especially for a developing country like Vietnam, which still depends heavily on coal power and has limited financial and institutional capacity, this transformation poses many challenges that need to be analyzed, evaluated and resolved systematically, with a scientific basis and clear policy orientation.
1.2 Energy and development
Energy always plays a key role in socio-economic development, being the "operating engine" of all production, service and people's lives. According to the IEA (2022), there is a close relationship between energy consumption and GDP growth, especially for developing countries. In Vietnam, in the period 20102020, electricity demand increased by an average of 9 10%/year, almost equivalent to the GDP growth rate.
Energy is not only an economic pillar but is also directly related to sustainable development goals (SDGs), especially climate goals (SDG 13), sustainable industrialization (SDG 9), and social justice (SDG 7). The green energy transition helps reduce dependence on imported fuels, enhance energy sovereignty, and at the same time open up space for innovation, creating high-quality jobs in areas such as clean technology and smart energy.
In recent years, in addition to industries that consume large amounts of energy such as: steel processing, manufacturing, cement manufacturing, etc., the explosion of some other industries with large energy consumption levels: electric vehicles, data centers, 4G, 5G broadcasting stations, AI technology, etc. has boosted electricity consumption. According to the revised Power Plan VIII, the total power source capacity must reach 183236 GW by 2030. This shows the vital role of ensuring a stable, efficient and environmentally friendly energy source.
1.3. Vietnam's potential for green energy development
Vietnam is considered a country with the potential to develop the leading renewable energy in Southeast Asia. In terms of solar energy, the average radiation in the South Central and Central Highlands regions reached 4.6–5.2 kWh/m²/day - higher than most countries in the region. The potential of Vietnam's solar electrical engineering is estimated on 450 GW, superior to Thailand (~ 42 GW), Philippines (~ 29 GW) or Malaysia (~ 30 GWP). Regarding wind power, according to World Bank (2021), Vietnam has the potential of wind power off to 600 GW, the highest ASEAN. The waters from Quang Tri to Ca Mau have a stable wind speed, appropriate depth to develop fixed wind power. Compared to the Philippines (76 GW), Thailand (~ 10 GW) or Indonesia (~ 20 GW), Vietnam's offshore wind potential is 5 to 10 times.
In addition, Vietnam also has great potential for agricultural by-products (~100 million tons of by-products per year), waste-to-energy (more than 60 million tons of household waste/year), and small hydropower plants (~2,500 MW under exploitation). Vietnam's recent recent recent decline but rapid development in the period of 20182020 (reaching more than 16.5 GW of solar power in just 3 years) shows that there is a lot of room and capacity to absorb new technology if supported with appropriate policies, finance and infrastructure.
However, converting potential into reality is still a challenge due to the lack of long-term incentive mechanisms, lack of integrated planning for land - electricity - grid, and infrastructure that has not kept up with the development speed.
II. THIEN THIEN HOSPITAL SCHEDULE HINGAinst A PITCH WORK NAM
Vietnam in recent years has made important changes in the energy sector, especially renewable energy. The 20182020 period witnessed the explosion of solar power, with more than 16.5 GW put into operation, making Vietnam the leading ASEAN country in terms of solar power capacity ( surpassing Thailand). Wind power will also reach about 4.3 GW by the end of 2023, most of which will be developed in Ninh Thuan, Binh Thuan and the Central Highlands provinces.
However, from 2021 onwards, this development trend has stagnated due to the end of the FIT price mechanism and no suitable replacement mechanism. More than 4,000 MW of solar and wind power have been completed but have not signed a power purchase agreement (PPA) or have had their capacity cut frequently due to failure to clear the grid. The lack of a transitional electricity price policy also causes dozens of GW projects to "row up" waiting for approval, causing great waste of social resources.
On the other hand, the energy structure still depends mainly on coal, accounting for about 45% of electricity output (2023). This puts great pressure on the goal of reducing greenhouse gas emissions and shifting to green. Clean power sources such as LNG, renewable hydropower, or new biomass are in the investment preparation stage and are not large enough to replace traditional sources.
In addition, models using energy efficiency, load-bearing reactors, digital electrical systems, and industrial rooftop voltages are still in the pilot phase, lacking a clear legal framework. The competitive retail electricity market has not yet been formed, the direct power purchase and sale mechanism (DPPA) has not been widely deployed, leading to a lack of flexibility in coordinating clean power sources to businesses in need.
III. THERRICH THERRY SCHEDULE Hence FITZING FITness
3.1. On policies and institutions
One of the biggest barriers to the energy transition process in Vietnam is the incompletion and instability of the policy framework. Up to now, although the revised Power Plan VIII has been issued and international commitments on net zero emissions, there is still no legal basis for renewable energy (LANDTT Law) or energy conversion law. This leads to a situation of disjointed policies, lacking high legal constraints, and difficulty in consistently implementing them between the central and local governments.
The post-FIT electricity price mechanism has not been issued in a timely manner, causing investors to lose confidence and delay many projects. The transition from FIT mechanism to auction or PPA at ceiling prices is unclear about the method of price determination, risk sharing mechanism and application roadmap. At the same time, current PPA contracts do not have high legal constraints, lack payment guarantee mechanisms or share infrastructure - policy - legal risks, making it difficult for international financial institutions to participate in long-term investment.
In addition, the overlap between the Electricity Law, the Law on Investment, the Land Law and the Law on Environmental Protection are causing many inadequacies in the process of investment licensing. For example, a 10 -hectare project of NLTT takes 12–18 months to integrate into land use planning, environmental appraisal, and approval of investment policies. The lack of an interconnected mechanism between ministries also makes the project disbursement and implementation of the project extended, increasing social costs and reducing the efficiency of energy conversion.
3.2. Regarding technical infrastructure
The strong development of solar and wind power in the period of 2018–2020 revealed inadequacies in the electricity infrastructure, especially the system of electricity and storage. The sources of NLTT have unstable power generation, depending on the weather and time of the day. Meanwhile, the Vietnamese electric system still relies mainly on the traditional model, lacking flexibility, lack of fast regulation and no large -scale energy storage buffer.
background electricity plays an important role in ensuring frequency stability and operation of the national power system. However, clean power sources such as LNG and pumped-storage hydropower are still very limited. Vietnam has not yet had any renewable hydropower plants in operation, while according to the adjusted Power Plan VIII, it is necessary to develop at least 2,4006,000 MW of renewable hydropower and 10,00016.300 MW of power storage system (BESS) by 2030 to support system operation when the number of employees accounts for a high proportion.
The lack of mandatory regulations for integrating BESS for NLTT projects ≥50 MW, the lack of supporting markets and payment mechanisms for storage, makes investors not interested in investing in storage, even though technology and finance are available. At the same time, the current transmission grid - especially 220kV and 500kV routes - cannot keep up with the speed of resource development, leading to overload, frequent cuts in solar power and wind power capacity in Ninh Thuan, Binh Thuan, Gia Lai and the Central Highlands.
3.3. Regarding technology and engineering
One of the important but often overrated challenges in the energy transition process is the limitation of technology and engineering. The current Vietnamese energy system is still mainly operated according to the traditional model, not designed to integrate a high proportion of alternative power sources such as solar power and wind power. This leads to difficulties in regulating, maintaining frequency and stabilizing electricity when the employee's power source is not synchronized with the load.
In addition, Vietnam has not yet fully developed an ecosystem of supporting technologies such as in-house storage batteries, smart investors, frequency regulation technology for hybrid systems (combining NLTT - BESS - diesel/gas). The ability to localize equipment is still low; most of the IT equipment (panels, turbines, investors, storage batteries, etc.) still has to be imported, leading to dependence on global market fluctuations and exchange rates.
The lack of specific national technical standards for flexible integration of IT, storage, and operation also reduces consistency in design and connection of new projects. Investors still lack clear guidance on minimum technical requirements to participate in the auxiliary market, frequency regulation, or automatic grid connection - hindering the process of professionalization and modernization of energy systems.
3.4. Difficulties in capital sources and green financial mechanisms
Energy conversion is a process that consumes a huge amount of financial resources. According to calculations by the Ministry of Industry and Trade and development partners, to achieve the goals in the adjusted Power Plan VIII, Vietnam needs to invest about 135150 billion USD in the period of 20212030, equivalent to nearly 15 billion USD/year. Meanwhile, the State budget can only cover a very small part, the rest must come from the private sector and international capital sources such as JETP, GCF, ADB...
However, capital mobilization for green energy projects in Vietnam is currently facing many barriers. Domestic banks are still hesitant to lend to infrastructure projects due to legal risks (lack of long-term PPAs with guarantees), market risks (not having stable electricity prices) and technical risks (not ensuring capacity clearance). The lack of a public-private risk sharing mechanism and contract guarantees from financial institutions such as the Bank for Development of Vietnam (VDB) also makes it impossible for green capital to reach the masses. On the other hand, Vietnam does not have a widely standardized and deployed green credit mechanism. The issuance of green bonds is still experimental, there is no unified taxonomy on green - clean - sustainable activities.
In addition, domestic private enterprises - especially small and medium enterprises - still have difficulty accessing long-term loans due to lack of collateral, lack of capacity to establish projects according to international standards (IFC, ADB), and are not familiar with the financial - environmental - social risk management (ESG) process. This causes a large gap between the potential for labor development and the actual financial capacity of the economy.
IV. THERRIPATING WORK OF DISPONSITUTIONS Of FITNIPAL NAME
4.1. Completing the legal framework and inter-sectoral coordination institutions
One of the prerequisites for effective implementation of the adjusted Power Plan VIII is to build and complete a synchronous, clear, stable and flexible institutional system to adapt to technology and market trends. Currently, Vietnam lacks a comprehensive legal framework on energy transition, especially the Law on Renewable Energy or the Law on Energy Transition.
It is necessary to urgently promulgate the Law on Renewable Energy, which specifically stipulates: scope of regulation for types of employees; rights and obligations of investors; licensing, connection and storage mechanisms; model PPA contracts with legal constraints; payment mechanisms for auxiliary services and risk sharing. The law needs to be designed in line with international trends, with consultations with the business community and large financial institutions to ensure feasibility and investment attraction.
Considering the establishment of a national Steering Committee on energy transition and carbon neutrality, under the Government, and inter-sectoral coordination between ministries and localities. This Board not only supervises the implementation of the VIII Power Plan but also coordinates green finance programs, system risk management and periodic updates on implementation progress.
In addition, guiding documents such as Decrees and Circulars related to electricity project bidding, DPPA mechanism, archival valuation, and technical regulations on labor relations integration also need to be issued soon. The delay in the legal framework will continue to "suspend" dozens of low-volume projects, slowing down the progress of the set goals.
4.2 Research on the application of science and technology
Science and technology (STI) is a fundamental element, throughout the entire green energy value chain - from production to storage, transmission and smart consumption. However, Vietnam is still mainly a technology importer, and does not have a strong enough domestic innovation ecosystem. To ensure autonomy and sustainability, there needs to be a strong investment strategy in R&D, international cooperation, technology commercialization and the construction of standard testing infrastructure. Specifically, it is necessary to invest in research and master the following technologies:
- New energy materials (PV, storage batteries, heat - electrical materials);
- Smart grid technology, super high-voltage transmission, smart investter;
- biomass, green hydrogen metabolism technology, mechanical - electrical - chemical storage;
- Rooftop, hybrid electrical equipment integrated with AI, blockchain, IoT.
Enterprises need to proactively invest in research, development and application of new technologies with potential in the fields of energy production, transmission and consumption with state support.
4.3. Synchronous development of source - network - storage infrastructure
National electricity infrastructure is currently a large knot in the process of effectively absorbing and exploiting renewable energy. The asynchronous development between the transmitter (solar power, wind power) and the transmission net has led to a capacity cut of up to 30–40% in many areas such as Ninh Thuan, Binh Thuan, Gia Lai and Dak Lak. In addition, the absence of energy storage systems (bess, hydroelectricity) also makes the system unable to operate stably when the NLTT accounts for a high proportion. To overcome, it is necessary to issue a compulsory mechanism to integrate the energy storage system for NLTT projects ≥50 MW. The minimum storage capacity should reach 2 hours of the rated capacity. Bess should be considered a synchronous infrastructure, included in the investment appraisal dossier, deducting costs in bidding and enjoying green credit incentives.
Regarding base power, it is necessary to prioritize the implementation of large-scale LNG power complexes near the load (Nhon Trach, Long An, Hai Phong...), in order to gradually replace old coal-fired thermal power plants. At the same time, it is necessary to include 3-5 strategic acquired hydropower projects (Bac Ha, Nui Coc, Phu Yen...) in the immediate priority investment portfolio, with ODA, JETP capital or green bonds.
Regarding transportation, it is advisable to expand the form of non-state investment according to the PPP or BOO model. Enterprises may be allowed to build separate transformer stations and connecting lines in renewable energy clusters - industry. The approval process of ≥110kV transmission lines needs to be shortened, while applying digital technology, SCADA, automation equipment and zoning to improve grid capacity.
4.4. Completing the competitive electricity market mechanism and electricity price policy
One of the necessary conditions to promote successful energy conversion is to form a truly competitive electricity market and build a flexible electricity price policy, accurately reflecting costs, market signals and the economy's affordability. Currently, the Vietnamese electricity market still mainly relies on the single-buyer (EVN) model, not fully developing the wholesale electricity market, competitive retail market, as well as not having a real supporting market.
To unleash the potential of renewable energy, it is necessary to urgently issue a transitional electricity price mechanism, with a flexible ceiling - floor price framework by region, technology type and power generation time. This mechanism should take into account actual costs (LCOE), system value and avoid creating competition disturbance between early and late investment projects. For diverse IT sources, electricity prices can be adjusted over time (time-of-use pricing), to encourage investment in flexible storage, load system and optimal regulation.
In addition, it is necessary to build an auxiliary power market including: frequency, black start, and charging services, quick backup, frequency balance, etc. captive and BESS hydropower plants should be allowed to participate in this market, receiving payment according to market prices or periodic auxiliary service contracts. The issuance of a Circular with specific instructions on the supporting market is one of the priority tasks for the period 20252026.
The direct power purchase and sale mechanism (DPPA) between IT investors and large customers (FDI, industrial park, multinational corporation) also needs to be widely deployed nationwide. This will promote green electricity consumption, reduce the regulatory burden for EVN and support businesses to fulfill ESG commitments and be carbon neutral in the supply chain.
4.5. Green financial mobilization and risk sharing mechanism
Sources are a key factor to successfully implement the energy transition process. While Vietnam's electricity investment demand in the 2021-2030 period is estimated at 135150 billion USD, the State budget can only finance about 1520%, the rest needs to come from the private sector and international capital. However, the green financial ecosystem in Vietnam has not yet developed accordingly, limiting the ability to mobilize capital.
First of all, it is necessary to establish a legal framework for green finance, including: green taxonomy system, criteria for appraisal of IT projects, green credit certification mechanism and incentives for issuing green bonds.
Second, the State needs to design public-private risk sharing tools, such as PPA contract guarantee, foreign currency guarantee, policy risk guarantee (amending laws, delaying licensing, reducing capacity, etc.).
Third, it is necessary to specify the mechanism for receiving and disbursing international funding sources, such as JETP (15.5 billion USD), GCF, Climate Investment Funds... In addition, it is necessary to encourage the establishment of regional green credit funds, mobilize capital from individual investors, local financial institutions, and large-emission enterprises that need to offset carbon.
In addition, the commercial banking system needs to be supported to improve its capacity to assess environmental - social - technological risks (ESG) to expand medium and long-term lending to employees. It is necessary to consider preferential interest rates, debt suspension, and investment insurance for IT projects that are highly effective in reducing emissions and creating green jobs.
4.6. Strengthening implementation and supervision capacity at the local level
One of the decisive factors for the success of the adjusted Power Plan VIII is the ability to implement synchronously between the central and local governments. However, current reality shows that the capacity of provinces, especially at the relevant department and branch level, is still limited in expertise, lack of understanding of energy planning, technology and services and green financial policies.
Therefore, it is necessary to implement a specialized training program for provincial officials on integration of electricity - land - infrastructure - environmental planning. As well as developing a manual instructing the enforcement of the VIII power planning at the provincial level, clearly stating: The process of proposing the NLTT cluster, the priority mechanism of the project combined with Bess - industrial load, land fund arrangement and grid connection. In addition, it is necessary to consider building the provincial renewable energy index (GIVCIAL RYEWable ENERGY INDEX), including the following criteria: The ratio of NLTT in consumption output, attic solar power ratio, Bess development level, private investment ratio into the grid ...
Considering the establishment of an Energy Transition Office in each province/region, similar to the model of JETP Offices at the Central level, will help increase proactiveness, reduce dependence on central guidance, and at the same time be the unit receiving funding and project coordination between local - state - international enterprises.
V. KET LUEN
Energy transition is one of the strategic tasks, comprehensive and has a profound impact on Vietnam's socio-economic structure, energy security and environmental commitments. It can be affirmed that Vietnam owns an outstanding renewable energy potential platform in Southeast Asia, especially in terms of solar power and offshore wind power. However, that potential is being seriously hampered by many systematic barriers.
Transitioning to green energy is not only a mandatory requirement from international commitments, but also a strategic opportunity for Vietnam to develop a low-carbon, modern and highly competitive economy in the global supply chain. The issuance of the revised Power Plan VIII is a correct and timely step, but only the beginning.
In order to turn the planning roadmap into reality, Vietnam needs to break through in institutional reform, master technology, effectively mobilize financial resources and develop electricity infrastructure according to integrated thinking - synchronization - flexibility. The early construction of transparent and consistent policies and policies is capable of attracting private and international investment will determine the possibility of success of the national energy conversion strategy. At the same time, it is necessary to improve the capacity to supervise and operate the implementation of the plan at both central and local levels, ensuring the "green institutional corridor" can lead the actual transition process. Only when the entire Energy - Financial - Administrative ecosystem has synchronously moving, Vietnam can accomplish carbon neutralization goals, ensure energy security and sustainable economic development in the new era, skillful rise of the nation.
