Vietnam is poised to change the course of its energy future. In December, the country is expected to approve its newest power development plan — PDP 8. This ambitious plan extends from 2023 to 2030. It offers a creative, robust framework to help diversify the nation’s energy sources — meeting growing energy needs while honoring domestic and global environmental obligations.
As part of the PDP 8 blueprint, Vietnam will increasingly pursue a more balanced energy mix. This new portfolio will consist of natural gas, coal, hydroelectricity, solar and wind energy. This comprehensive approach is more important than ever as the country moves to realize its goal of reaching net-zero emissions by 2050. Through this planned integration and transition, Vietnam will be able to improve its energy security and resiliency while addressing global climate concerns.
Including all of the above, the Vietnamese power sector provides significant opportunities for renewable energy development. Wind, solar and biopower are called out specifically as priority sectors with significant potential for expansion. As the nation struggles with the realities of running out of coal, the growth in thermal resources under power generation has caused quite the stir. Almost half of Vietnam’s electricity currently comes from coal and gas-fired thermal power plants. Meanwhile, the country is home to thousands of hydropower facilities.
Though Vietnam’s energy sector has potential, the industry has been stymied by limited state financing. That’s why PDP 8 is making these issues a priority. Its latest energy sector strategic plan sets out ambitious targets to triple the nation’s installed power capacity by 2030. The plan emphasizes the need for increased investment in large-scale energy projects, particularly those involving renewable sources and liquefied natural gas (LNG) terminals.
The outlook for Vietnam’s renewable power capacity is bright. The power capacity might reach approximately 112.1 gigawatts (GW) by 2035. From 2024, it is expected to increase with a CAGR of 14.3%. Last year, renewable power generation jumped by nearly 50 percent. It increased by nearly 82% from 21.1 terawatt hours (TWh) in 2020 to a projected 38.5 TWh in 2024, representing a healthy compound annual growth rate (CAGR) of 16%.