Tiếng Việt
Tiếng Anh07:46 | 15/12/2025
As we know, at the 10th Session of the 15th National Assembly (December 11, 2025), the National Assembly voted to approve the Resolution on mechanisms and policies for national energy development (2026-2030) to remove long-standing bottlenecks in planning, investment preparation, and investor selection for energy projects. On this occasion, the Scientific Council of the Vietnam Energy Magazine published an article analyzing the impacts of the new institutional framework on the electricity market and the energy transition process; and simultaneously recommended and suggested mechanisms and policies that the Government needs to issue to quickly implement the Resolution.
The period 2026-2030 is a crucial time when Vietnam must simultaneously meet the growing demand for electricity, ensure national energy security, and promote the transition to cleaner energy sources. The new National Assembly Resolution provides an urgent legal framework to address major obstacles in planning, implementing energy projects, and developing a competitive electricity market.
I. Key Contents of the Resolution:
The Resolution amends several groups of issues related to updating the power plan, investing in the transmission grid, developing offshore wind power, the Direct Power Purchase Agreement (DPPA), and investment activities in the oil, gas, and coal sectors. The regulations apply to all organizations and individuals participating in activities in the electricity, oil, gas, and coal industries in Vietnam.
1. Mechanism for Adjusting and Updating the Power Plan:
A key new feature is the more flexible "plan adjustment and update" mechanism compared to the planning adjustments under the Planning Law. The update does not alter major objectives, does not increase the total power capacity according to the approved type structure, and is applied to requirements from international agreements, replacing delayed projects, adding battery energy storage projects (BESS), or adjusting the scale and connection points of the power grid. The Ministry of Industry and Trade is granted the authority to approve power plan updates, while provincial People's Committees are delegated the authority to approve updates to provincial power grid plans.
Another noteworthy point is that the update does not require the preparation of a Strategic Environmental Assessment (SEA) report, thus shortening the processing time.
2. Mechanism for investing in and constructing the power grid:
The resolution abolishes the procedure for approving investment policies for projects included in the approved power plan, thereby simplifying the implementation process. The decision approving the plan, or the decision approving the investment project, is considered the full legal basis for land allocation, land leasing, allocation of sea areas, or conversion of land use and carrying out necessary legal procedures. For projects requiring bidding to select investors, the document approving the bidding results will be the legal basis for carrying out these procedures.
3. Investor Selection in the Electricity Sector:
In addition to cases stipulated in the law, the Resolution allows for the approval of investors without competitive bidding for projects related to power system dispatch infrastructure, offshore wind power projects in the 2025-2030 period, projects with existing land use rights, or urgent projects aimed at ensuring energy security. The Chairman of the Provincial People's Committee has the authority to approve investors within 30 days; for inter-provincial power grid projects, the province with the starting point of the power line is assigned to make the decision.
4. Mechanism for Supporting Power System Operation and the Electricity Market:
NSMO (National Power System and Market Operator) is exempt from the requirement of having a minimum of 3 years of operation when considering borrowing or receiving government guarantees, facilitating the unit's financial operations.
5. Electricity Pricing Mechanism in Bidding:
The winning bid price is determined as the Power Purchase Agreement (PPA) price and does not exceed the price range at the time of bidding. Contract negotiation time is limited to a maximum of 30 days to expedite project progress. This mechanism applies to projects with an operational start date between 2026 and 2030 (excluding offshore wind power, thermal power, and small module nuclear power (SMR)).
6. Development of Small Module Nuclear Power (SMR):
The resolution paves the way for research and preparation of a mechanism for developing SMRs, encouraging the participation of both state-owned and private enterprises. Investment will be implemented in stages (depending on the level of technology commercialization), but absolute nuclear safety is paramount.
7. Offshore Wind Power Survey and Development Mechanism:
During the period 2025-2030, the Prime Minister will approve the investment policy and designate investors for offshore wind power projects. A ceiling electricity price framework will be applied in PPA negotiations to control costs. From 2031-2035, the authority will be transferred to the Chairman of the Provincial People's Committee where the power aggregation point is located, but with the consensus of many relevant ministries and sectors, reflecting strict requirements regarding national defense, marine environment, and energy security.
8. Direct Power Purchase Agreement (DPPA):
Electricity prices in DPPAs are mutually agreed upon by the parties. Participation will be expanded to include industrial parks, economic zones, high-tech zones, and free trade zones. The Ministry of Industry and Trade will regulate the minimum capacity threshold for large customers participating in the mechanism. This is an important basis for forming a competitive electricity market and shifting towards a green electricity trading mechanism.
9. Investment in oil, gas, and coal projects:
Some important and urgent oil, gas, and coal projects are exempted from the investment approval procedure to shorten procedures and support the timely commissioning of projects, ensuring short-term primary energy security and supporting resource allocation as the power system expands.
II. Some comments, assessments, and recommendations
The resolution has created the following breakthroughs:
1. Enhancing flexibility in planning – an institutional breakthrough:
The mechanism for adjusting and updating the plan helps address the situation where many projects in the Power Development Plan VIII are behind schedule or unfeasible. Adding BESS projects, adjusting, supplementing, and upgrading the power grid, and replacing projects (those that are delayed or not implemented) can be done more quickly, improving coordination efficiency and reducing social waste. However, this mechanism needs to be monitored to avoid abuse, ensure transparency, and comply with the technical and economic objectives of the system.
2. Strong decentralization to localities – opportunities and challenges:
Increasing the authority of localities contributes to accelerating progress, but it also carries the risk of capacity disparities between provinces and difficulties in inter-provincial coordination for the national transmission system. Without independent control and evaluation mechanisms, the risk of conflicts of interest or inconsistencies in infrastructure development is a concern.
3. Special mechanisms for offshore wind power – promoting a new strategic industry:
Designating investors and establishing a price ceiling framework helps reduce risks in the initial phase, in line with international practices. However, the attractiveness of the price framework needs to be updated according to market costs to avoid situations where projects cannot be implemented.
In addition, requirements regarding national defense and maritime security are necessary, but may prolong the project preparation time.
4. DPPA – a driving force for the development of a competitive electricity market:
The Direct Power Purchase Agreement (DPPA) helps FDI and export businesses access green electricity, promoting the development of renewable energy in a market-oriented manner. However, Vietnam needs to clearly define the system balancing mechanism, transmission costs, and responsibility for providing reserve capacity to avoid disputes.
5. SMR - a necessary preparatory step, but caution is needed:
Small Modular Reactors (SMRs) offer an opportunity to access new technology, but carry high risks due to the technology not yet being widely commercialized. Vietnam needs to approach this through pilot projects, prioritizing the legal framework and human resource training before implementing actual projects.
6. Fossil fuels are an urgent need - risk control is required:
Accelerating oil, gas, and coal projects helps ensure energy security in the context of increasing demand. However, easing procedures must be accompanied by rigorous environmental assessments to avoid prolonged dependence on fossil fuels and ensure the energy transition roadmap.
Furthermore, the National Assembly Resolution does not address several mechanisms to remove bottlenecks in ongoing liquefied natural gas (LNG) power projects, for which the Government submitted an initial draft report to the National Assembly. These issues can be referred back to the Government for resolution, but they need to be addressed promptly to ensure that base-line power projects are implemented on schedule, guaranteeing energy security for the 2026-2030 and 2031-2035 periods – corresponding to the national energy transition.
III. Mechanisms that the Government needs to continue addressing:
As mentioned above, the new National Assembly Resolution stipulates several prominent mechanisms to promote energy projects on schedule during the 2026-2030 period. However, most of the provisions in the new Resolution only address the planning phase or the initial stages of project preparation.
Besides the content regarding LNG power generation not mentioned in the National Assembly Resolution, the following challenges in the investment implementation process need to be urgently considered and resolved by the Government and relevant ministries and agencies. Specifically:
1. Lack of a framework for electricity purchase/sale prices for battery storage and flexible power sources.
2. Lack of a model contract for renewable energy plants installing battery storage.
3. Lack of a separate capacity price from the electricity price.
4. Lack of regulations on project buyback payments when contracts are terminated prematurely without fault of the project company.
5. Lack of regulations on protecting investors in the event of natural and political force majeure events.
6. Lack of clarity in regulations on participation in the competitive electricity market for planned power source projects.
Along with that, there are some missing regulations such as:
- Regulations on fire prevention and control, environmental protection, and acceptance testing of battery storage systems.
- Regulations on the content and scope of marine surveys for offshore wind power projects.
- There are no regulations on whether surveys must be conducted before or after the approval of investment policies for offshore wind power projects.
- A draft model PPA for offshore wind power projects selling electricity to the national grid has not yet been issued.
Specific issues that need to be addressed for each type of project include:
For imported and domestic LNG power projects:
1. Propose the construction of a large-scale central LNG hub model and a synchronized connecting infrastructure system (limiting the model where each LNG hub serves only one LNG project).
2. For gas-fired power plants using natural gas, which are operated at maximum capacity based on domestic gas fields, a take-or-pay mechanism should be added to transfer the gas take-off obligation to the PPA contract.
3. For LNG power projects with a minimum output (Qc) of 65%, a mechanism is needed to ensure that LNG power plants are operated in line with the LNG import schedule in long-term LNG purchase contracts. The remaining output should be operated according to market demand and all operating and fuel costs should be fully covered.
4. Consider applying a capacity pricing mechanism, or an equivalent mechanism such as a reserve guarantee payment in the PPA contract. Specifically, this would involve electricity payments throughout the project's economic life for fixed cost components (FC) and fixed operating and maintenance costs (FOMC) in the electricity price – regardless of the amount of electricity generated and fed into the grid, based on the plant's actual availability to the power system. (The Electricity Law 2024 already includes provisions on capacity pricing in Section b, Clause 8, Article 51).
In reality, LNG prices on the international market are highly volatile and can fluctuate unexpectedly, increasing or decreasing suddenly. This makes it difficult for investors to determine a reasonable electricity price in PPA contracts.
Furthermore, regulations on LNG delivery times are very strict; if a ship arrives and the investor fails to receive the LNG while it is still in storage, they will be penalized. Given the specific requirement of committing to using 100% of the purchased LNG, adjusting the Qc level appropriately is a prerequisite for power plant investors to plan long-term LNG purchases and proactively balance operational plans to align with fuel supply plans.
According to the technical requirements for operating LNG storage facilities, natural vaporization (Boil Off Gas - BOG) is generated. Therefore, to avoid burning this BOG, the storage facility's technical operation requires maintaining regasification capacity to absorb all generated BOG. Thus, a sufficiently large long-term minimum Qc will help limit the risk of having to burn off BOG gas.
5. Consider the exchange rate adjustment mechanism. Accordingly, the foreign currency portion of the electricity price in the PPA is calculated in USD and paid in VND. Payment of any foreign currency difference (if any) is made regularly (e.g., monthly). Simultaneously, consider guaranteeing foreign currency conversion while LNG fuel prices require foreign currency for payment.
6. Consider a mechanism for repurchasing projects when they are terminated prematurely due to reasons not attributable to the project company, in order to maintain plant operation until the end of the project's economic life.
For renewable energy projects:
Currently, the FIT pricing mechanism for renewable energy has been terminated. Therefore, it is necessary to switch from FIT pricing to competitive bidding, or a preferential FiP (Feed-In Premium) pricing mechanism – meaning renewable energy is sold on the market but receives government support when market prices are low and the difference is reimbursed when market prices are higher than the FiP level. The chosen mechanism must be appropriate to the specific circumstances and must be promulgated through legal documents to provide a legal basis for implementation. The suspension of the renewable energy purchase price policy, as seen recently, should not erode investor confidence. Therefore, the Government needs to consider supplementing the following mechanisms and policies:
1. Issuing specific mechanisms and policies for offshore wind power, including a one-stop licensing/bidding procedure, prioritizing land clearance and investment in transmission infrastructure. Applying long-term, stable, high-quality Public-Private Partnership (PPA) contracts that can fully utilize clean energy to reduce the levelized cost of electricity (LCOE) and provide high bankability to attract international financing.
2. Issuing regulations on the procedures for surveying and assessing marine resources and approving investment policies for offshore wind power projects. Regulations on the content and scope of internal surveys and studies (Destop Studies) for the investment approval phase of offshore wind power projects in the 2031-2035 period.
3. Technical standards for battery energy storage systems (BESS) and short-term regulations on the mandatory BESS ratio in renewable energy projects (depending on capacity and technology type) are needed to create a domestic market. Businesses would be willing to invest in BESS production (if they see a sufficiently large market). Currently, most of our power generation equipment is imported, so having a BESS production unit in Vietnam would be a crucial step towards self-reliance. Therefore, a mechanism for buying and selling electricity for BESS is necessary. For example, a two-component electricity price, including capacity payment + energy price, or ancillary service price, to ensure financial feasibility.
4. Standardized bidding procedures are needed in localities to select investors. Currently, each locality interprets and implements the process differently.
5. Low electricity prices are causing investor concern and a lack of confidence in promoting investment. Therefore, a flexible adjustment roadmap (increase or decrease) for retail electricity prices is needed, ensuring that wholesale electricity prices remain at a reasonable market level, consistent with the trend of increasing renewable energy.
Regarding power transmission projects:
Currently, although the Law allows all economic sectors to participate in investing in the construction of power grids, in reality, apart from EVN and its member units, it is very difficult to attract non-state investors to invest in power transmission grids due to the unattractive transmission pricing mechanism. Therefore, in addition to solutions such as long-term lease partnerships or financial ownership, the most important thing is a transmission pricing mechanism that covers reasonable and legitimate costs and provides a reasonable profit to recover investment capital. The government and relevant ministries and agencies need to continue considering and implementing truly attractive investment mechanisms and policies to attract private capital into the power transmission sector. These policies must ensure transparency regarding transmission prices and fees, capital recovery mechanisms, and reasonable profits for investors.
Priority should be given to supporting (financing, allocating local land, etc.) backbone transmission projects and inter-regional interconnection projects such as 500 kV lines, high-voltage direct current (HVDC) transmission lines, and key substations, as well as inter-regional transmission grid projects.
Further investment in the transmission grid should be strengthened towards a smart grid, increasing grid automation, and investing in technology to improve efficiency and reliability, with a focus on ensuring cybersecurity and preventing grid disruptions that could become a serious system problem.
Regarding the electricity market:
It is necessary to accelerate the development roadmap for a competitive retail electricity market (expected to be implemented before 2030) by separating the transmission segment... and calculating the cost of transmitting energy through the grid for transmission and operation companies, ensuring transparency and equality for investors. On the other hand, supplementing the power-side pricing mechanism and ancillary services in the electricity market to accurately reflect the system value of flexible power sources (BESS).
IV. Conclusion:
The National Assembly's Resolution on mechanisms and policies for national energy development (2026-2030) is an important transitional step, creating strong institutional capacity to address some major bottlenecks in the energy sector, while related laws and decrees are in the process of being updated and amended. Innovations in planning updates, decentralization to local authorities, investor selection mechanisms, electricity pricing in bidding, and specific policies for offshore wind power and DPPA will open up new development opportunities for the electricity market. However, many bottlenecks in the mechanisms for implementing energy projects still need to be addressed by the Government and relevant ministries and agencies.
Furthermore, the successful implementation of these new mechanisms depends on the level of transparency, monitoring capacity, consistency in macroeconomic management, and accountability at all levels of management.
With the 2026-2030 period fast approaching, ensuring energy security must go hand in hand with sustainable transition and environmental and social risk management in energy investment, requiring clear policy decisions to avoid discouraging investors.
Source: VIETNAM ENERGY JOURNAL SCIENTIFIC COUNCIL
Reference: Resolution of the National Assembly on mechanisms and policies for national energy development (2026-2030 period) - December 11, 2025.
