Vietnam’s long-awaited Power Development Plan VIII (“PDP8”) was approved by the Prime Minister on 15 May 2023 with immediate effect, a milestone in the country’s journey towards energy transition. According to Vietnamese law, the Ministry of Industry and Trade should implement the announcement of the plan within 15 days as from the approval of PDP8.
The stated main objective of PDP8 is to achieve energy security for Vietnam while also progressing on its climate change commitments made at COP26. The aim is also to export 5,000-10,000 MW of power by 2030. Towards this goal, PDP8 proposes a new energy mix with a substantial reliance on renewables and the development of smart transmission grids to support the renewables industry, including connecting the power grids with neighboring countries (i.e. Vietnam becoming an energy exporter in ASEAN).
According to the plan, renewable energy resources will constitute up to 67.5% - 71.5% of the energy mix by 2050. This includes new renewable sources and an increased use of certain currently used renewable sources.
A notable planned contributor to the renewable energy sources will be wind energy, supported by Vietnam’s long coastline. There is a particular focus on onshore wind, with a planned increase to 14.5% of the energy mix in 2030 from 0.8% in 2020. Offshore wind features too, with an increase to 4% in 2030 from 0% in 2020, albeit at a slightly reduced amount from previous drafts of the PDP8 – previous drafts called for 7 GW of offshore wind by 2030 and that has been reduced to 6 GW in the approved PDP8 likely due to the estimated costs for investment in transmission grids to dispatch the electricity generated from offshore wind are higher than onshore wind.
In terms of conventional power, there will be no new coal-fired power plants to be developed after 2030, though coal is still anticipated to be 20% of the energy mix by 2030. PDP8 envisages a transition to using biomass and ammonia in place of coal till 2050. With respect to gas-fired power, PDP envisages that there will be no new LNG-to-power plants to be developed after 2035 and there will be a transition to using hydrogen for such LNG-to-power plants to 2050.
Set out below is a summary of our understanding of the changes for Vietnam’s intended energy mix for 2030, compared to its energy mix for 2020, following PDP8. 
(The above diagram is based on the information drawn from Thomson Reuters data.)
PDP8 also envisages the establishment of 2 inter-regional renewable energy industrial and services centres by 2030 that will include renewable energy power plants as well as factories for renewable energy equipment manufacturing, construction and installation related-services.
The targets under PDP8 call for substantial investment. The estimated total investment in development of power source and transmission grid between 2021 and 2030 is expected to be around USD 134.7 billion and for the period between 2031 and 2050, USD 399.2 billion – USD 523.2 billion. In December 2022, Vietnam signed a Just Energy Transition Partnership agreement with a group of developed countries collectively called the International Partners Group, pursuant to which it will receive US$15.5 billion to assist in its energy transition. The approval of PDP8 is a step towards unlocking these funds and a step in the right direction to attract international investors and we are confident that it heralds very exciting times for investors and developers in Vietnam’s power industry.
Co-authored with (and with thanks to the team at) Frasers Law Company, Vietnam.
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