Introduction
Vietnam possesses approximately 3,260 kilometres of coastline and ample sunshine averaging 1,700-2,500 hours annually, making Vietnam an ideal location for developing renewable energy, particularly through wind and solar power. With the global shift towards green energy and increasing domestic energy demands, Vietnam has become a promising market for renewable energy investment. According to Vietinbank Securities, there is an average 8.5% annual increase in energy demand in Vietnam in the next five years. Furthermore, the year 2021 witnessed a remarkable growth of wind power, with the total capacity from only 540 MW in 2020 increased to approximately 4,000 MW by the end of 2021, which has positioned Vietnam as the second fastest country in East Asia in terms of development rate of renewable energy sources.
At COP26, Vietnam government committed to achieving net zero emissions by 2050. Continuously, the PM participated in COP28 and announced the Resource Mobilization Plan to secure financial assistance for this commitment. The plan includes an initial fund of US$15.5 billion and is focused to implement the Joint Environmental Transition Partnership (JETP), established between Vietnam and the International Partners Group (IPG) at the EU-ASEAN summit in Brussels in December 2022. The JETP aims to mobilize US$15.5 billion of public and private finance over the next three to five years, supporting Vietnam’s transition to a green economy and achieving its net zero emissions goal by 2050.
While the economic and political factors are shaping a promising future for the renewable energy market in Vietnam, potential challenges may arise due to the early development of the legal framework. Several areas of practice, such as DPPA, carbon credit, and self-generation for RTS, that lack regulation by laws. However, the enactment of PDP8 in May 2023 and its detailed implementation plan recently released in April 2024 have emphasized Vietnam’s commitment to renewable energy development and encouraging private investment in power grid infrastructure. It can be seen as an attractive opportunity for investors since government efforts are underway to support the growth of Vietnam’s renewable energy market, aligning with its focus on sustainable development.
