Partner Hanoi
"The PDP8 Implementation Plan is considered a positive step towards resolving current barriers and expediting development of the power sector in Vietnam."
1. Thermal power projects
As set out in the National Power Development Master Plan, the thermal power sources to be developed from 2021 to 2030 include domestic gas, LNG, and coal with a total capacity of 14,930 MW, 22,400 MW and 30,127 MW respectively.
The PDP8 Implementation Plan sets out in Table 1, 2, and 3 of Annex III details of domestic gas, LNG and coal power projects to be developed until 2030, including name, planned capacity, location, required year of operation and additional notes on the project status.
Among those listed, the following projects have been classified as projects of national importance, priority projects under Decision No. 270/QD-TTg dated 2 April 2024 of the Prime Minister:
| Project | Capacity | Project status |
|---|---|---|
| Domestic gas-to-power project chains | ||
| Block B gas-to-power project chain: • upstream gas field development project; • midstream gas transportation project; and • downstream gas-fueled power plants. | Capacity of four power plants (O Mon 1, 2, 3, and 4): 3,810 MW | Under development |
| Ca Voi Xanh gas-to-power project chain: • upstream gas field development project; and • downstream gas-fueled power plants. | Capacity of five power plants (Mien Trung 1 & 2, Dung Quat 1, 2 & 3): 3,750 MW | Under development |
| LNG-fuelled power plants (importing from regional terminal) | ||
| Quang Trach 2 power plant | 1,500 MW | Under development |
| Nhon Trach 3 & 4 power plant | 1,624 MW | Under construction |
| Long An 1 power plant | 1,500 MW | Preparing feasibility study |
| LNG-to-power project chains (including terminal and power plant(s) | ||
| Son My project | Two power plants with capacity of 2,250 MW per power plant | Preparing feasibility study |
| Quang Ninh project | 1,500 MW | Preparing feasibility study |
| Thai Binh project | 1,500 MW | Under development |
| Nghi Son/Quynh Lap project | 2 power plants with capacity of 1,500 MW per power plant | Nghi Son power plant: Selecting investor Quynh Lap power plant: Under development |
| Hai Lang Phase 1 project | 1,500MW | Preparing feasibility study |
| Ca Na project | 1,500 MW | Selecting investor |
| Bac Lieu project | 3,200 MW | Preparing feasibility study |
| Coal-fired power plants | ||
| Quang Trach 1 power plant | 1,403 MW | Under construction |
| Long Phu 1 power plant | 1,200 MW | Under construction |
"A key concern for investors in renewable power projects in general and onshore and nearshore wind power projects is upcoming tariff policy."
2. Renewable power projects
The PDP8 Implementation Plan provides instruction for each type of renewable power projects, including wind, solar, hydro and other power sources. Notably, for wind and solar power projects, the PDP8 Implementation Plan has assigned relevant authorities to resolve regulatory challenges faced by investors, including:
2.1 Wind power projects for consumption within Vietnam
(i) Onshore and nearshore wind power projects
The PDP8 Implementation Plan provides in Table 9 of Annex III details of onshore and nearshore wind power projects to be developed until 2030, including name, planned capacity, location, required year of operation and additional notes on the project status with total capacity of 21,880 MW.
Given the expiration of feed-in-tariff policies, a key concern for investors in renewable power projects in general and onshore and nearshore wind power projects is upcoming tariff policy. The PDP8 Implementation Plan assigns the Ministry of Industry and Trade (“MOIT”) to organise and coordinate with relevant authorities in constructing and promulgating tariff range for different types of power projects. For wind power projects, Circular 15/2022/TT-BCT dated 3 October 2022 and Circular 19/2023/TT-BCT dated 1 November 2023 have provided clear regulatory framework for calculation of annual tariff range for wind power projects in the interim (i.e. projects that have signed PPA but did not meet COD before the required COD) which are not eligible for feed-in-tariff.
Besides tariff range, investors are also awaiting instructions on negotiation of power purchase agreement (“PPA”) and tariff. On 29 December 2023, the MOIT has published for consultation a draft circular which intends to regulate the method for calculation of tariff and negotiation of PPA for specific projects. The draft circular covers a broad range of projects, including thermal, renewable power projects and projects using new sources of energy such as hydrogen or ammonia. Accordingly, investors and utility offtaker Vietnam Electricity (“EVN”) will negotiate the project PPA and tariff, subject to the yearly tariff range approved by MOIT as analysed above.
(ii) Offshore wind power projects
The PDP8 Implementation Plan provides in Table 1 of Annex II the regional allocation of capacity of offshore wind power to be developed until 2030 with total capacity of 6,000 MW.
So far, due to an insufficient regulatory framework, there has not been any approval for development of offshore wind power projects in Vietnam. The PDP8 Implementation Plan assigns the Ministry of Planning and Investment (“MPI”) to research and propose to the competent authority to promulgate regulations on authority for approval of offshore wind power projects. Meanwhile, state-owned enterprises EVN and Vietnam Oil and Gas Group (“PVN”) have been assigned to research the capability and conditions for implementation of offshore wind power projects to be ready when obtaining permission for development from competent authority.
2.2 Solar power projects for consumption within Vietnam
(i) Concentrated solar power projects
Under the National Power Development Master Plan, the total capacity of concentrated solar power projects to be developed until 2030 is 10,236 MW. Projects that obtained approval for investment will be subject to different treatments depending on their status of investor selection, specifically:
- For projects that have been assigned to a specific investor, the competent authority will assign specific development progress targets to these projects taking into account relevant regulations, assurance of energy security, balance of sources and loads, grid infrastructure, economic efficiency, appropriate tariff and transmission costs. Under the PDP8 Implementation Plan, the MOIT is assigned to coordinate with provincial authorities to complete reviewing these projects and submit the list of projects to be developed by 2030 to the Prime Minister for approval before 30 April 2024.
Similar to wind power projects as analysed in Section 2.1(i), these projects will be required to negotiate PPA and tariff with EVN, subject to the yearly tariff range approved by MOIT. - For projects that have not been assigned to specific investor, such projects as listed in Annex IV of the National Power Development Master Plan will only be considered for development after 2030, unless the projects are implemented under a self-consumption model and comply with regulations on planning, land use and other matters.
(ii) Rooftop solar power projects
The PDP8 Implementation Plan provides in Table 6 of Annex II the provincial allocation of capacity of rooftop solar power projects to be developed until 2030 on self-consumption basis with total capacity of 2,600 MW.
"The PDP8 Implementation Plan provides for 5,000 MW to 10,000 MW of renewable power projects to export to other countries."
So far, MOIT has been coordinating with relevant authorities to prepare a governmental decree on the development of rooftop solar power projects on a self-consumption basis. The decree intends to clarify definitions relating to self-consumption rooftop solar power projects, limitation of development, requirements for registration and compliance with relevant laws (for both grid-connected and non-grid-connected projects).
2.3 Other renewable power projects for consumption within Vietnam
Besides wind and solar power projects, the PDP8 Implementation Plan provides details on projects of other renewable sources to be developed until 2030, including:
| Types of renewable sources | Total capacity for development | References on project details |
|---|---|---|
| Hydropower projects | 29,346 MW | Mid and large-scale projects: Table 6 of Annex III Small-scale projects: Table 10 of Annex III |
| Hydro pump-storage projects | 2,400 MW | Table 7 of Annex III |
| Co-firing projects, projects using residual heat, blast furnace gas, by-products of production line | 2,700 MW | Table 5 of Annex III |
| Biomass projects | 1,088 MW | Table 11 of Annex III |
| Waste-to-energy projects | 1,182 MW | Table 12 of Annex III |
| Battery storage projects (integrated in other renewable projects) | 300 MW | Table 8 of Annex III |
2.4 Renewable power projects for export
The PDP8 Implementation Plan provides for 5,000 MW to 10,000 MW of renewable power projects (potentially in Vietnam’s central and southern regions) to export to other countries. The approval for these renewable power projects will be given in alignment with the approval for policy for power exportation and approval for related grid connection projects.
3. Power transmission projects
The PDP8 Implementation Plan provides in Annex V the lists of important, priority grid projects, including projects to connect domestic sources and projects to import electricity from neighbouring countries (e.g. Laos and China). It also notes that the lists are subject to future updates upon approval of additional renewable power projects (e.g. concentrated solar power projects as analysed in Section 2.2(i).
Hanoi Legal Trainee Quynh Nguyen also contributed to this article.
