Roadmap of power development in Vietnam through PDP8


published on 14 July 2023 | reading time approx. 5 minutes


On 15 May 2023, the Vietnamese government adopted the Power Development Plan 8 (“PDP8”), showing a very strong commitment towards decarbonization since announcing their ambitious target of net zero emissions a few years ago. The Plan further aims at reducing Vietnam’s dependence on imported energy, increasing self-sufficiency and the development of renewable energy sources in the country. To illustrate the potential of this industry in Vietnam, in this article we will briefly summarize and assess some important issues with regard to the power sector development plan.



Highlights of PDP8

While the Energy Development Plan 7 ("PDP7") (i) was still heavily biased towards coal power (48-51 percent) and thermal nuclear power (1.3-6.6 percent) and (ii) envisaged renewable energy development with a small share (38-25 percent) and decreasing trend until 2050, PDP8 represents a completed energy "transition". In particular, PDP8 sets a new development direction in focusing on renewable energy sources by increasing the amount of renewable power generation capacity (i.e. up to 48 percent of the total capacity by 2030, and 65.8-71 percent the of total capacity by 2050) while significantly reducing the share of coal power in the electricity distribution plan (i.e. from 20 percent of the total capacity to 0 percent by 2050). 
In other words, PDP8 is a national power development plan with the aim of strongly promoting renewable energy and developing LNG power sources for the first time in order to phase out coal power and to achieve the 2050 carbon neutrality target.

Oriented development of renewable energies 

1. Solar power 

In order to avoid overloading the national electricity grid, PDP8 strongly promotes the development of solar energy for self-consumption (i.e. solar power on rooftops of residential houses and businesses for on-site consumption, but without connection to or sale through the national electricity grid). It underlines the importance and encourages the development of rooftop solar systems for self-consumption by households and businesses.
It shows that grid-connected solar power projects will no longer be prioritized for promotion, as was previously the case in PDP7. Instead, the PDP8 becomes a mechanism to promote the development of rooftop solar power for households and construction sites for self-consumption. Specifically, it sets a target of 50 percent of office buildings and residential homes using self-produced rooftop solar power for self-consumption by 2030.
It is also worth highlighting that certain solar projects included in the PDP7 for which investors have not yet been selected, may not be further developed in or after 2023, unless they are developed for self-consumption, i.e. not connected to the grid. In addition, upon implementing PDP8, the Ministry of Industry and Trade (MOIT) will assess and decide on the development schedule of solar projects for which investment policy approval has already been granted and for which investors have been selected.

2. Wind power

With PDP8, the government prioritizes the development potential of offshore wind over onshore wind. Compared to PDP7 with an offshore wind capacity of 1,000 MW by 2030 and 6,200 MW by 2050, the total capacity of offshore wind under PDP8 has been significantly increased to 26,880 MW by 2030 and 123,850-162,350 MW by 2050.
PDP8 does not list any specific wind power projects for implementation. Instead, the MOIT will formulate the PDP8 implementation plan, and during this process the relevant provinces will propose specific wind power projects to be included in this implementation plan for later consideration and decision by the MOIT and the government.

National power grid development

To ensure the efficiency of power generation projects, the government not only sets targets for the development of the national power grid, but also explicitly lists the important priority power grid projects in PDP8. In addition, national transmission lines will be developed to connect the potentially largest offshore wind areas in central and northern Vietnam after 2030. A feasibility study for regional grid connection in the Asia-Pacific region will also be carried out.

Recommendation for the efficiency of power development 

In addition to establishing a specific roadmap for efficient energy development, PDP8 sets the following targets for efficient energy development in Vietnam: 
  • Completion of financial instruments for emissions in the power sector (e.g. CO2 tax), promotion of research on and practical application of technologies, clean fuels or no Greenhouse Gas Emissions for these types of projects;
  • Investigation on auction and tender mechanisms for project developer selection and electricity pricing while amending the Electricity Act and finalizing a competitive electricity market model; this would lead to (i) the formal introduction of the direct power purchase agreement mechanism and (ii) the development and issuance of direct power purchase and sale agreement (DPPA) charging regulations; 
  • Establishment of the legal framework that enables all sectors of the economy to invest in the electricity transmission infrastructure;
  • Complementing mechanisms for power system support services, such as: increasing flexibility of existing power sources, development of flexible sources, battery storage systems and load response (DR).


An important and exciting milestone has been reached with the ratification of PDP8, defining the development strategy and timeline for Vietnam's energy sector until 2050. The Vietnamese authorities must therefore ensure that the legal framework for the energy sector development following the adoption of PDP8 is coherent, investor-friendly and transparent, if PDP8 is to achieve its objectives and improve the bankability of renewable energy projects in Vietnam.
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