A different perspective on Vietnam’s economy and doing business in Vietnam. Make sure to  subscribe.

how to guides

cheat sheets


Electricity in Vietnam: Foreign Investor Cheat Sheet 2024

When it comes to electricity in Vietnam, whether a company is using it or producing it, there are a lot of nuances that foreign investors should be aware of. This cheat sheet runs through a brief overview of how the industry and the market operate.

Who manages Vietnam’s electricity supply?

The Ministry of Industry and Transport is the government body in charge of managing Vietnam’s electricity market and supply. It does this through the wholly state-owned power company Electricity Vietnam commonly known as EVN. EVN generates some power, but also buys power from wholesalers, and sells electricity to consumers. 

That said, the actual technical aspects of managing the supply, as in ensuring a stable supply and managing load shedding when necessary, are managed by the National Power System Dispatch Centre commonly known as the NPSDC. This used to be a part of EVN but was spun off into its own entity reporting directly to the Ministry of Industry and Trade in response to power outages last year in Vietnam–it’s not clear how this change will prevent future blackouts.

Are power shortages a problem in Vietnam?

Last year, power shortages were estimated to have cost Vietnam’s economy an estimated US$1.4 billion. This was attributed to water shortages for hydropower and a lack of a sufficient supply of coal, however, underinvestment in power infrastructure also played a role.

This is in large part because EVN was selling electricity at a loss and therefore didn’t have the money to invest. This was partly because of a jump in input prices but mostly because retail electricity prices, which are regulated by the government, were not increased in line with these increased costs.

Of note, it’s estimated that Northern Vietnam’s electricity consumption could increase by as much as 17 percent this summer, however, the supply of electricity is estimated to have increased just 10 percent.

Electricity pricing in Vietnam

Retail electricity prices in Vietnam are regulated and, though permitted, price rises are not all that common. This has led to EVN selling electricity below cost price. As of January, it was losing about VND 142.5 per kilowatt-hour sold.

 Changes have been made to pricing regulations in recent weeks that will see electricity prices reviewed quarterly (as opposed to annually as was the case in the past) and adjusted by up to 3 percent by EVN before approval is needed from the MoIT. This is detailed in Decision 5 issued back in March.

That said, Decision 24 issued back in 2017, the precursor to Decision 5, already had provisions for the electricity price to be adjusted annually, however, between 2019 and November 2023 no adjustment was made. It’s not clear why and in this context, the frequency at which power prices are reviewed does not appear to be a problem so much as a lack of will to increase prices seems to be–there is currently no plan to address this.

For reference, the average electricity price for the world is 15.5 US cents per kilowatt-hour with electricity in Vietnam running at about 7.2 US cents per kilowatt-hour.

Electricity price brackets

In Vietnam, for power projects, the MoIT typically sets a maximum and minimum price within which EVN then negotiates with individual power producers. It’s not clear what the purpose of these price brackets is and announcing the maximum price EVN can pay in advance seems counterintuitive to the negotiation process. Regardless this is the process through which most power project prices are determined.

Vietnam’s Power Development Plan 8

The Power Development Plan 8, commonly referred to as the PDP8, was approved in May of 2023 and essentially outlines goals and plans for Vietnam’s electricity sector–it’s not clear how the figures outlined in this plan have been reached.

Electricity generation targets by source, per the PDP8

By 2030By 2050
Onshore wind power21,88014.560,050 – 77,05012.2 – 13.4
Offshore wind power6,000470,000 – 91,50014.3 – 16
Solar power12,8368.5168,594 – 189,29433.0 – 34.4
Biomass2,2701.56,0151.0 – 1.2
Hydropower29,34619.536,0166.3 – 7.3
Stored power2,7001.830,650 – 45,5506.2 – 7.9
Cogeneration2,7001.84,5000.8 – 0.9
Converted coal*0025,632 – 32,4324.5 – 6.6
Gas37,6302514,9302.6 – 3
Hydrogen0020,900 – 29,9004.1 – 5.4
Imports5,0003.411,0421.9 – 2.3
Flexible power sources0030,900 – 46,2006.3 – 8.1
Totals250,489100490,529 – 573,129N/A

Power Development Plan 8 implementation plan

This basically lists all of the power projects that need to be built in order to satisfy the goals set in the PDP8. Note that there are no specific wind power projects listed and the goal of six megawatts by 2030 is unlikely to be reached. In fact, many of these projects have not yet been started and given there are only about five years within which to meet these goals, many of them are looking increasingly unlikely. 

See also: Vietnam’s Offshore Wind Power Holdup: Unpacked 2024 


Vietnam has said it intends to be net zero by 2050. To do this it is looking at wind, solar, and hydro as well as hydrogen. Wind and solar saw a lot of growth over the last decade with policy allowing for considerably generous feed-in tariffs. These policies came to an end at the end of 2021.

Just Energy Transition Partnership agreement

The JETP was signed by the G7 and a handful of other nations and Vietnam in December 2022. The agreement is for US$15.5 billion in funding for Vietnam’s green transition from both public and private partners. It has, however, run into challenges with a Politico article back in December basically saying that there was no buy-in for the current JETP roadmap on the Vietnam side from key stakeholders.

Policy outlook

Direct Purchase Power Agreements–DPPAs

These are in the legislative pipeline but as yet have not been approved. As of writing, there are two options on the table. One that would allow private power producers and power users to connect their operations via private transmission lines. The other involves using the national grid to transmit power. DPPAs have been on the table for years but progress has been slow and it’s not clear how much longer there might be to go.


Feed-in-tariffs for rooftop solar are currently being discussed. MoIT is pushing for no feed-in-tariffs on the grounds that it does not want to encourage roof-top solar as way to make money. It is concerned that feed-in-tariffs will encourage overdevelopment and this will make it more challenging to manage the national grid.

Electricity pricing

The state power provider EVN has floated the idea of charging a subscription fee on top of metered electricity prices to cover the additional infrastructure costs for some customers–for example, a factory using huge amounts of power might require its own substation and high-voltage power lines, and the subscription fee would be used to cover these expenses.

What’s next?

The electricity market and the industry more broadly, in Vietnam are complex with many moving parts. Whereas this article covers the broad strokes, businesses looking to invest in Vietnam’s electricity sector, or start a business in Vietnam, should go much deeper.

Firms should also keep in mind that Vietnam’s economy is dynamic and prone to change quickly. In this respect, Vietnam’s electricity industry watchers can best make sure they are abreast of all of the latest developments by subscribing to the-shiv.


May 30, 2024: Added section on electricity price brackets in Vietnam.


get connected with an expert
contribute a guest post
send a letter to the editor
submit a press release

latest news

Vietnam-US Trade Tracker: May 2024 Update [data set]

The United States is the biggest buyer of Vietnam’s exports and together the two countries engage in over US$100 billion worth of trade each year. This tracker looks at what is imported from the US and exported to the US from Vietnam using the most recent data available.

Read More »

Proposal to increase foreign ownership limits in airlines in Vietnam rejected

The Vietnam airline industry has been struggling broadly as a result of government regulated ticket prices, increasing fuel costs, and a debt hangover from the COVID-19 pandemic when the industry more-or-less ground to a halt. Bamboo Airways, in particular, only took to the skies in 2019 the year before the pandemic broke out. It also started life as a subsidiary of FLC Group which has been heavily mired in controversy after its leader was arrested back in 2022. This saw the airline spun off but the new independent entity has never had much success and has repeatedly downsized its fleet and the number of routes it offers…

Read More »

Adidas, New Balance suppliers struggling to find workers in southern Vietnam

Some of the challenges raised in this article, with respect to hiring workers, is that workers have more job options other than factory work, workers no longer need to move to population centres with many manufacturing operations opening in tier two cities and provinces, and workers that moved back to their hometowns during the COVID-19 pandemic have still not returned on the back of the general uncertainty that the pandemic created.

Read More »

Korea’s Daewoo looking at making cars in Vietnam

Vietnam’s automotive industry is huge but dominated by motorcycles. That said, cars are becoming more popular with just shy of 5 million registered vehicles at the end of 2020. This does, however, represent just 5 percent of the population of 100 million people which means there is plenty of room for car sales to grow…

Read More »

Russian president could be in Vietnam next week: Reuters

Vietnam has remained cordially with Russia throughout the Ukraine War. The Southeast Asian nation is heavily dependent on Russia for its arms supplies but also has a strong bond with the country on account of their similar political pasts. This has seen Russian tourist arrivals grow by 80 percent in the first five months of this year over the first five months of 2023 and…

Read More »

advertising enquiry

submit a press release

Note that it will be marked as a press release/sponsored post.

guest post

We publish guest posts of 800 to 1000 words from experts who have something unique to say on topics relevant to our audience. 

get connected with an expert

letters to the editor

We review letters for quality and authority and generally only publish views that add to the discussion from experts in their field.