Challenges in Meeting the Power Source Development Timeline under the Revised PDP VIII

06:34 | 15/07/2025

With a massive amount of capital required and only 5.5 years remaining until 2030, Vietnam faces significant challenges in implementing the Revised Power Development Plan VIII (PDP VIII)—especially as several types of power sources, such as offshore wind, battery energy storage systems (BESS), and nuclear power, are being developed for the first time in the country. These technologies are new to Vietnam and involve considerable technical, regulatory, and operational uncertainties. Below are some key observations on the challenges of ensuring power source development stays on schedule as outlined in the national roadmap. For in-depth analysis of the proposed nuclear power projects in Ninh Thuan (expected to be operational between 2030–2035), readers may refer to references [1], [2], [3], [4], [5] at the end of this article.

Decision No. 768/QĐ-TTg dated April 15, 2025, on the Adjustment of the Power Development Plan VIII by the Prime Minister aims to provide sufficient electricity to meet domestic demand, fulfilling socio-economic development goals with an average GDP growth rate of approximately 10% per year during the 2026-2030 period and approximately 7.5% per year during the 2031-2050 period. Specifically as follows:

Table 1: Power generation structure in 2030

No.	Power source	Year 2030, MW	Density Ratio, %
1	Coal-fired power	31,055	13.1-16.9
2	Domestic gas-fired power	10,861-14,930	5.9-6.3
3	LNG thermal power	22,524	19.5-12.3
4	Hydropower	33,294-34,667	14.7-18.2
5	Onshore and near-shore wind power	26,066-38,029	14.2-16.1
6	Offshore wind power	6,000	-
7	Solar power of all types	46,459-73,416	25.3-31.1
8	Biomass power	1,523-2,699	-
9	Waste-to-energy power	1,44,-2,137	-
10	Geothermal power and other new energy sources	45	-
11	Storage sources	10,000-16,300	5.5-6.9
12	Flexible power sources	2,000-3,000	1.1-1.3
13	Pump-storage hydropower	2,400-6,000	-
14	Electricity imports	9,360-12,100	4.0-5.1
15	Nuclear power (2030-2035)	4,000-6,400	-

Accordingly, the total investment capital for developing power sources and transmission grids during this period is equivalent to US$136.3 billion. Of this, approximately US$118.2 billion will be invested in power sources, and approximately US$18.1 billion in transmission grids – meaning an average of US$24.78 billion is needed annually (over 5.5 years). Power sources alone require US$21.5 billion in investment each year.

Following the approval of the Plan for Implementing the Adjusted Power Development Plan VIII, the Government issued the following decrees:

- Decree No. 56/2025/NĐ-CP guiding power planning, power supply network development plans, investment in power projects, and bidding and investor selection (with additions and amendments in Decree No. 100/2025/NĐ-CP).

- Decree No. 57/2025/NĐ-CP on the mechanism for direct electricity trading between renewable energy (RE) power generation units and large customers.

- Decree No. 58/2025/NĐ-CP on regulations for the development of renewable energy and new energy sources.

In addition, the Ministry of Industry and Trade has promptly approved electricity prices for various types of power sources in 2025. Accordingly:

- Decision No. 1313/QĐ-BCT on the maximum electricity price framework for LNG power is 3,327.42 VND/kWh (equivalent to 12.96 US cents/kWh).

- Decision No. 1198/QĐ-BCT on the maximum price framework for pumped-storage hydropower is 3,457.02 VND/kWh (equivalent to 13.46 US cents/kWh).

- Decision No. 1824/QĐ-BCT dated June 26, 2025, of the Ministry of Industry and Trade on the offshore wind power price framework. Specifically, the maximum price for the Northern Sea region is 3,975.1 VND/kWh; for the South Central Sea region is 3,078.9 VND/kWh; and for the Southern Sea region is 3,868.5 VND/kWh.

- Decision No. 988/QĐ-BCT on the maximum price of solar power for both types without and with battery storage; Decision No. 1508/QD-BCT on the maximum price of onshore/nearshore wind power (view in Table 2).

Table 2: Electricity generation price framework for renewable energy sources in 2025 (VND/kWh, maximum level, excluding VAT)

Type of power plant	Northern VN	Central VN	Southern VN	Conditions attached
Solar power without battery storage system	Apply based on the average radiation intensity of each region.
- Ground	1,382.7	1,107.1	1,012.0
- Floating	1,685.8	1,336.1	1,228.2
Solar power systems have battery storage	The storage battery capacity must be at least 10% of the solar power plant's capacity, with a storage/discharge time of 2 hours, and the proportion of electricity charged must be 5% of the plant's output.
- Ground	1,571.98	1,257.05	1,149.86
- Floating	1,876.57	1,487.18	1,367.13
Wind power
- On land	1,959.4	1,807.4	1,840.3
- Near-shore	1,987.4	1,987.4	1,987.4
Biomass thermal power	2,091.74	2,091.74	2,091.74	The maximum price is 2,091.74 VND/kWh.
Waste-to-energy	2,575.18	2,575.18	2,575.18	The maximum price is 2,575.18 VND/kWh.

Challenges in Power Development According to the Revised Power Development Plan VIII:

To address policy obstacles in power development, the Government and the Ministry of Industry and Trade have issued new regulations and pricing frameworks for various power sources to encourage private investors to participate in the power development market, hoping to create momentum for mobilizing investment capital in large-scale power sources and renewable energy. However, due to the large number of projects requiring investment, especially renewable energy sources (estimated at approximately 50 MW per project, the total number of solar power projects would be around 600-1,100, and wind power projects 400-640). Therefore, difficulties arise in bidding and contractor selection, while the specialized human resources at the local level are limited.

Furthermore, several mechanisms are currently lacking, such as a framework for purchasing and selling electricity from battery storage, flexible power sources, and a separate power-based pricing system from the electricity price…

Challenges in capital mobilization:

Due to the large investment required, state capital accounts for only a small percentage, thus dependence on private investors and foreign capital markets is inevitable. From now until 2030, developing power sources requires mobilizing $21.5 billion USD annually. If electricity prices are not reasonable, it will be difficult to attract private investors and mobilize foreign capital markets.

In addition, some thermal power projects, such as the An Khanh coal-fired power plant, face significant difficulties in mobilizing capital from international credit and financial institutions, as these institutions have ceased providing funding for coal-fired power plant development.

Timeline Challenges:

With only a little over 5 years left until the end of 2030, while many types of power generation require more than 5 years to build, or we lack experience in offshore wind power construction, which typically takes 6-8 years worldwide.

Projects that are difficult to complete within 5 years include:

1. Pumped Storage Hydropower Projects:

We started construction of the Bac Ai Pumped Storage Hydropower (PSH) project in 2020. Although we have over 50 years of experience in surveying, designing, constructing, and operating hydropower plants, the Bac Ai PSH project has been delayed for various reasons, with its 1,200 MW capacity expected to be operational by 2029.

Currently, there is no official investor for the Phuoc Hoa, Dong Phu Yen, and Don Duong PSH projects. Construction of these hydropower projects may be on schedule if investors recognize the profit potential of investing in this type of power generation. However, although the electricity selling price is set quite high according to Decision No. 1198/QĐ-BCT dated April 26, 2025, of the Ministry of Industry and Trade at VND 3457.02/kWh – equivalent to 13.46 US cents/kWh, the maximum operating capacity of PSH plants is only 1,310 hours/year, while the time spent pumping water into the reservoir reaches 1,886.4 hours/year with the electricity purchase price based on the off-peak hour retail electricity price of VND 1,094/kWh (according to Decision 2699/QĐ-BCT dated October 11, 2024).

Thus, the ratio of electricity used for pumping to electricity generated is 1.44. A year has 8,760 hours of operation, but the pumped-storage hydropower plant operates at nearly 3,200 hours (both pumping and generating electricity) – meaning it has to shut down for more than 5,560 hours. The lack of a two-component electricity pricing system is also a barrier to the development of PSH plants.

Table 3: List of pumped-storage hydropower plants expected to be operational by 2030

No.	Projects	Expected capacity (MW)	Year of operation	Province	Note
1	Bac Ai PSH	1200	2028-2029	Khanh Hoa	Included in the VIII PDP
2	Phuoc Hoa PSH	1200	2029-2030	Khanh Hoa	Included in the VIII PDP
3	Dong Phu Yen PSH	900	2025-2030	Son La	Included in the VIII PDP, adjusted operating phase
4	Don Duong #1 PSH	300	2025-2030	Lam Dong	Included in the VIII PDP, adjusted operating phase

2. Regarding Offshore Wind Power Projects:

It is projected that 6,000 MW from 12 offshore wind power projects will be put into operation by 2030. Although the selling price of offshore wind power is quite high, a major obstacle is the lack of completed potential investment projects to facilitate the bidding process for selecting investors. While acknowledging that it will be almost impossible to bring all projects (even half the capacity) as shown in Table 4 below into operation by 2030, the Government and the Ministry of Industry and Trade still maintain such ambitious targets to encourage investors to take the necessary steps early.

Table 4: List of Offshore Wind Power Plants by 2030

No.	OWPP Development Area	Expected capacity (MW)	Tổ hợp dự kiến
			Project name	Capacity (MW)
1	Northern Vietnam OWPP 1	1500	Northern Vietnam OWPP 1.1	500
			Northern Vietnam OWPP 1.2	500
			Northern Vietnam OWPP 1.3	500
2	Northern Vietnam OWPP 2	500	Northern Vietnam OWPP 2	500
3	Northern Vietnam OWPP 3	500	Northern Vietnam OWPP 3	500
4	South Central Vietnam OWPP 1	1500	South Central Vietnam OWPP 1.1	500
			South Central Vietnam OWPP 1.2	500
			South Central Vietnam OWPP 1.3	500
5	South Central Vietnam OWPP 2	500	South Central Vietnam OWPP 2	500
6	Southern Vietnam OWPP 1	500	Southern Vietnam OWPP 1	500
7	Southern Vietnam OWPP 2	500	Southern Vietnam OWPP 2	500
8	Southern Vietnam OWPP 3 (*)	500	Southern Vietnam OWPP 3	500

3. Regarding battery storage:

According to the revised Power Development Plan VIII, the battery storage capacity to be put into operation in 2030 will be between 10,000 and 16,300 MW (accounting for 5.5-6.9% of the power generation structure). However, there are currently no regulations on electricity selling prices, so the possibility of putting battery storage into operation in 2030 remains a big question mark.

4. Regarding flexible power sources:

Flexible power sources are expected to reach 2,000-3,000 MW (accounting for 1.1-1.3% of the total power generation capacity of the entire system), but there is also no electricity selling price. Therefore, the possibility of putting them into operation on schedule is also unclear. See Table 5 for the list of flexible power plants according to the revised Power Development Plan VIII.

Table 5: List of flexible power plants

No.	Project	Expected capacity (MW)	Province/ City	Operational phase	Note
1	Ninh Binh Flexible Power Plant	300	Ninh Binh	2027	Decision No. 1682/QĐ-TTg dated December 28, 2024
2	Ninh Binh Flexible Power Plant 2	1200	Ninh Binh	2030
3	Hai Duong Flexible Power Plant	1200	Hai Phong	2025 - 2035
4	Flexible thermal power generation increases (*)	Approximately 6,530		2025 - 2035

5. Regarding LNG Power Sources:

Besides the Nhon Trach 3 and 4 LNG power projects, which are preparing for commissioning, and the Hiep Phuoc power project (phase 1), which is under construction, 10 other projects out of a total of 22,540 MW are still in the investor selection or investment preparation stages at various levels. The most crucial step, the Power Purchase Agreement (PPA), has not yet been finalized. Of course, difficulties also arise from the requirements of FDI investors or entities participating in joint ventures (such as LNG suppliers, equipment providers, infrastructure providers, etc.), not only demanding reasonable electricity prices, but also issues related to foreign exchange conversion guarantees; and the application of third-country laws. The clauses regarding contract termination risk guarantees, etc., are problematic. Many investors believe that if the PPA agreement is not finalized by mid-2026, all LNG power projects currently under construction will be unable to be completed before January 1, 2031, in order to benefit from the preferential regulations under Decree No. 56/2025/NĐ-CP (amended by Decree No. 100/2025/NĐ-CP).

Comment:

The preliminary analysis above shows that bringing all the power sources mentioned in the Revised Power Development Plan VIII into operation by 2030 according to the set schedule is a huge challenge. The issue of capital is a perennial difficulty, but if power projects (of all types) have reasonable profits during construction, they will attract investors. However, technical issues must be implemented according to regulations; no step can be skipped, even if it may extend the construction time for new types of power sources.

Mechanisms, policies, and electricity pricing frameworks for these types of power sources are lacking and need to be supplemented or amended so that investors have a basis for calculating the economic benefits of the project, thereby deciding whether to participate in investment.

Time is running out until 2030, so the Government and the Ministry of Industry and Trade need to find a reasonable solution for the investors selected to implement power plant projects in the Revised Power Plan VIII./.

[1] Ninh Thuan 1 and 2 Nuclear Power Projects - Government considers expert-proposed solutions

[2] New framework law and proposed detailed guidelines in Decrees and Circulars for Vietnam's nuclear power

[3] Discussion on the nuclear power program and nuclear power infrastructure in Vietnam

[4] Nuclear power plant construction technology and some suggestions for application in Vietnam

[5] Organization of nuclear power plant construction - Suggestions for suitable institutions for Vietnam

Source: VIETNAM ENERGY JOURNAL SCIENTIFIC COUNCIL