Download report
All markets

Vietnam

With a cumulative score of 1.95, Vietnam ranks number 9 among emerging markets and number 33 in the global ranking.

  • Emerging markets
  • Asia-Pacific

2.41 / 5

Power score


0.87 / 5

Transport score


 

Buildings score


Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.


Compare

Low-carbon strategy

Net-zero goal and strategy

Vietnam is yet to adopt a long-term decarbonization strategy or a net-zero emission target.

Nationally Determined Contributions (NDC)

Under its Nationally Determined Contribution, or its official plan to cut emissions under the Paris Agreement, Vietnam commits to reducing its greenhouse gas emissions by 9% under a business-as-usual scenario by 2030, and up to 27% by the same year with international support.

Fossil fuel phase-out policy

There is no fossil fuel phase-out policy in Vietnam.

Power

Power policy

Vietnam’s power market is dominated by state-utility Vietnam Electricity Group (EVN). The generation sector is opened to the participation of independent power producers. State-owned companies including EVN, Vinacomin and PV Power owned 65% of installed capacity in 2019. However, two consecutive solar booms in Vietnam over 2019-20, which saw almost 19 gigawatts of capacity installed, greatly diversified generation capacity ownership. EVN retains a monopoly in the transmission, distribution and electricity retail segment. The government targets liberalizing its electricity retail market by 2025 starting with a planned direct power purchase agreement pilot.

Vietnam witnessed strong power demand growth over the last decade. Between 2010 and 2019, Vietnam’s electricity demand increased at a compounded annual growth rate of 10.1%, primarily driven by increased foreign investment in Vietnam’s manufacturing sector. Delays in planned fossil fuel plants and exhaustion of the country’s large hydro potential led to power supply shortage concerns. This led to a pivot in the government’s attention away from coal and toward renewables and gas as suggested by the draft power development plan VIII issued in February 2021.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

To spur development in wind and solar, Vietnam introduced feed-in tariff (FiT) schemes for wind and solar projects. The first wind FiT implemented in 2011 at $78/MWh failed to incentivize development. It was subsequently revised in September 2018 – the onshore wind FiT was increased to $85/MWh and an offshore wind FiT of $98/MWh was introduced. Wind developers in Vietnam are currently racing toward a commissioning deadline of November 1, 2021.

The solar FiTs successfully attracted investments into the sector, allowing Vietnam to emerge as the regional clean energy leader in Southeast Asia. The two solar feed-in tariff schemes drove almost 19 gigawatts of solar build in just two years and propelled Vietnam to become the third-largest solar market in 2020. This led to a significant change in the make-up of Vietnam’s power mix. In 2020, the share of fossil fuel fell significantly to just 42% of installed capacity, from 83% in 2019. However, as most of the solar boom in 2020 occurred in December, coal and gas still generated 66% of electricity in 2020. However, due to the rapid development of both utility and small-scale solar, grid congestion and curtailment are increasing concerns in Vietnam.

Loading...

Power market

Vietnam’s power system is predominantly fossil fuel based with coal, gas and oil supplying 60% of generated electricity in 2018. Hydro’s potential has been largely harnessed in Vietnam and accounts for 38% of supply. Renewable energy (excluding hydro) has a limited role in the current generation mix, with less than 1% of total supply.

Vietnam’s power market is partially liberalized, with the generation sector open for private participation. EVN and its subsidiaries monopolize transmission, distribution and retailing of power. Vietnam operates on a single buyer model with EVN as the sole off-taker of all generated electricity. A power sector reform roadmap is in place. In 2012, the competitive generation market was established and unbundled EVN’s power generation function. In the second phase of liberalization, Vietnam introduced the competitive wholesale market in 2019. A competitive retail market is targeted after 2021. A mechanism for direct purchase of power by corporates is also under development.

Installed Capacity (in MW)

20122014201620182020020K40K60K MW

Electricity Generation (in GWh)

20122014201620182020050K100K150K200K250K GWh
Loading...

Utility privatisation

Which segments of the power sector are open to private participation?


Generation
Transmission
Retail

Wholesale power market

Does the country have a wholesale power market?


Available
Not available

Doing business and barriers

The investment climate in Vietnam is stable. There are no known defaults by the single off-taker, EVN. There are no barriers to entry in the form of foreign ownership restrictions or local content requirements. There is however uncertainty in the future revenue and offtake schemes for solar and wind projects. After the expiry of the last solar FiT in December 2020 and with the upcoming wind FiT expiry in November 2021, the government has yet to release any new pricing mechanism for solar and wind projects.

Currency of PPAs

Are PPAs signed in or indexed to U.S. Dollars or Euro?


Available
Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?


Available
Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?


Available
Not available

Fossil fuel subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?


Available
Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?


Available
Not available

Fossil fuel taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes?


Available
Not available

Transport

EV market

While there are little to no passenger EVs in the vehicle fleet currently, Vietnam leads the Southeast Asia region in electric two-wheelers with over 420,000. In 2020, the country accounted for 99% of all-electric two-wheeler sales in Southeast Asia. This high adoption rate is driven by Vietnam’s lax rules on low-speed electric two-wheelers. The country historically allowed these vehicles to be driven without a driver’s license and without registration, making it a popular choice of transportation.

EV policy

Vietnam has yet to implement a federal electric vehicle (EV) policy or a long-term roadmap. There are no incentives for the purchase of EVs although the country imposes a lower excise tax of 5-15% on battery EVs compared to 35-90% for internal combustion engines. The Ministry of Industry and Trade has said it was considering additional tax incentives to encourage development and use of electric vehicles in Vietnam, however, none has been finalized.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?


Available
Not available

Buildings

Buildings market

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.

Energy performance standards

Are there minimum energy performance standards for buildings?


Available
Not available

Energy efficiency plan

Does the country have a national energy efficiency plan?


Available
Not available

Buildings policy

In 2006, Vietnam approved the first Vietnam Energy Efficiency Program that outlined measures for improving energy efficiency and conservation across different sectors of the economy. The program is now in the third phase for the period 2019-30.

The national technical regulation on energy efficiency buildings code applies to the design, construction or retrofit of buildings with a gross floor area of 2,500 square meters or larger. The energy efficiency building code regulates and sets minimum standards for building envelope, ventilation and air conditioning systems, lighting systems and electrical equipment. Although the regulation was first adopted in 2013, compliance is reported to be low.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

Additional insights
from BNEF

Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.

Read more

Powered by

Climatescope 2021

Energy Transition Factbook

This marks the 10th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. For the first time, the project has expanded its scope to include activity not just in clean power but in the decarbonization of the transportation and buildings sectors.

Read the reportSee all reports

Stay up to date

Subscribe to our mailing list to get the latest news about Climatescope directly in your inbox.


Results
Themes
InvestmentPolicyProgress

© 2022 Climatescope. View license and Privacy policy