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| A solar power project in Thuan Nam district, Ninh Thuan province, now part of Khanh Hoa province__Photo: VNA |
A series of major policy breakthroughs are setting the stage for increased investment, removing transmission bottlenecks, and accelerating clean energy development in Vietnam.
On July 12, Prime Minister Pham Minh Chinh issued Directive 20/CT-TTg on urgent tasks to prevent and address environmental pollution. The move marks a shift in environmental policy and plays a key role in building a sustainable energy ecosystem. Addressing environmental and energy issues in tandem is expected to strengthen Vietnam’s power system, supporting green growth, energy security, and the country’s Net Zero target by 2050.
Vietnam’s energy transition is anchored by three major policy pillars: Power Development Plan VIII (PDP8), the Direct Power Purchase Agreement (DPPA) mechanism, and the Just Energy Transition Partnership (JETP). PDP8 outlines a long-term legal framework prioritizing renewables and grid upgrades. The DPPA fosters a competitive electricity market, connecting businesses with green power and attracting private capital. JETP mobilizes international funding and technical support to phase out coal and promote clean, equitable energy.
These policies are creating a robust legal foundation and helping to relieve transmission congestion, particularly in areas with high renewable energy potential.
Internationally, Vietnam is the first developing country to sign the JETP agreement with the G7 - a milestone that opens access to green finance, technology, and global expertise. At home, critical transmission projects are being accelerated, including the completed 500kV circuit-3 line and inter-regional substations, to unlock capacity from key energy hubs such as Khanh Hoa and Lam Dong.
In the liquefied natural gas (LNG) sector, major projects like Nhon Trach 3 and 4 LNG-powered plants and the 4,500 MW Hai Phòng LNG center are progressing rapidly. LNG development is expected to diversify energy supply and support the transition from coal to lower-emission sources.
However, several challenges remain. Dr. Tran Chi Thanh, President of the Vietnam Atomic Energy Institute, noted that restarting the nuclear program in Ninh Thuan would require comprehensive preparation in infrastructure, legislation, and workforce.
Vietnam Energy Association Vice President and Secretary General Nguyen Anh Tuan warned of possible power shortages between 2026 and 2028 due to slow project rollout and incomplete pricing and bidding mechanisms.
Human resources also pose a constraint. The International Renewable Energy Agency (IRENA) found that training programs have yet to meet the needs of modern technologies like wind and solar. Ta Dinh Thi, Vice Chairman of the National Assembly Committee on Science, Technology, and Environment, called for a strategy to develop “green jobs” aligned with the energy transition.
Green finance remains a major hurdle. Le Hoang Lan of the State Bank of Vietnam said green projects lack a unified legal framework despite high capital demand.
Dr. Nguyen Quoc Thap, Chairman of the Vietnam Petroleum Association, proposed a National Assembly resolution to designate energy as a core economic pillar to attract long-term investment.
Some localities are leading the charge. Former Ninh Thuan province (now part of Khanh Hoa province) has become a renewable hotspot with 57 projects totaling 3,750 MW. Investors like Trung Nam Group, BIM Group, and Thien Tan are active, with Trung Nam also exploring a green hydrogen complex with a projected capacity of 824,000 tons per year by 2050.
Despite progress, grid constraints and peak-hour curtailments persist. Projects such as the 1,500 MW LNG-fuelled Ca Na Power Plant, the Bac Ai pumped-storage hydropower station, and offshore wind farms are helping form a complete industrial energy ecosystem.
Turning policies into progress will require close coordination among central and local authorities and the private sector. Achieving Net Zero by 2050 demands synchronized action across regulation, finance, technology, and workforce development..- (VNA/VLLF)
