Vietnam addresses power supply gaps and electricity sector restructuring

Vietnam is addressing challenges in its power sector, including slow progress in new power source development and plans for industry restructuring. In the first nine months of the year, new power capacity reached only 3.5%, falling short of the 6.6% target. Bùi Quốc Hùng, Deputy Director of the Electricity and Renewable Energy Authority, identified bottlenecks such as investment approval procedures, land allocation, Power Purchase Agreement (PPA) negotiations, and electricity pricing policies.

To ensure supply through 2027 and beyond, the Ministry of Industry and Trade is proposing amendments to the Electricity Law and seeking to link local government responsibility to land clearance and investment procedures. The Ministry also aims to attract private and foreign direct investment by refining pricing policies.

Simultaneously, the government is reviewing two restructuring schemes: one by the Ministry of Industry and Trade to develop a competitive electricity market, and another by the Ministry of Finance regarding Vietnam Electricity (EVN). The goal is to separate natural monopolies, such as power transmission and distribution, from competitive segments like power generation, wholesale, and retail. Currently, EVN owns less than 40% of power generation projects, as various domestic and foreign enterprises participate in the competitive generation market.