Viet Nam

Risk mitigation elements in the design of power purchase agreements

Related policy guide sections

• Power purchase agreements
• Direct power purchase agreements
• Off-taker risk mitigation

Power purchase agreements (PPAs) between private sector actors and the national offtaker (EVN) are designed for a 20-year period across all renewable energy (RE) technologies under the feed-in tariff (FiT) regime that was in place between 2011 and 2020 for wind and 2020 for solar. This 20-year term is no longer automatically guaranteed under the transitional and auction-based frameworks. For the forthcoming auction-based PPAs, the policy direction is towards longer-term contracts (up to 25 years, potentially extendable to 30 years), but the exact duration is subject to the auction documentation and contract negotiations rather than being uniformly fixed at 20 years.

Medium Barriers

The national electric utility, EVN, acts like the single buyer in the Vietnamese electricity market. “EVN' s rating is equalized with the Vietnam sovereign rating under Fitch' s Government-Related Entities (GRE) Rating Criteria, reflecting a strong likelihood of support by the state. EVN' s Standalone Credit Profile (SCP) is assessed at ' BB', according to Fitch Ratings.” Therefore, the offtaker risk is relatively minor.

Medium Barriers

The renewable PPAs are not indexed to inflation. The Vietnamese inflation rate was relatively stable over the past five years (between 1.8 and 3.6%) and therefore does not constitute a major risk.

Low Barriers

PPAs are not indexed to other currencies. Payments are made in Vietnamese Dong.

Medium Barriers

The biggest risk for RE project developers in Vietnam is the lack of any curtailment regulation. Project developers can be curtailed without limits and without any financial compensation. This risk is factored in by all project developers, increasing risks and thus cost of capital for all projects.

High Barriers

Private sector and foreign ownership of power generation assets is allowed in Vietnam.

Low Barriers

Currently, there is no predictable procurement framework or schedule for large-scale renewables. The Vietnamese procurement framework for large-scale renewables was characterized by stop-and-go policies over the past years. Even though the Power Development Plan (PDP8) prescribes a clear scheduled for RE procurement between now and 2050, this has not yet been translated into a clear procurement schedule related to the auction-based mechanism.

High Barriers

Vietnam's renewable energy support has moved through three distinct phases. The FiT boom ran until eligibility deadlines of 31 December 2020 for solar and 1 November 2021 for wind, driving rapid build-out but also grid congestion and curtailment. This was followed by a transitional phase under Decision 21/QD-BCT (7 January 2023), in which EVN negotiated tariffs with stalled projects within MOIT-capped price brackets rather than automatic FiTs.

Since 2025, and more decisively from 1 March 2026 under Resolution 253/2025/QH15, Vietnam has shifted to a fully market-based system built on three mechanisms: competitive bidding or negotiated PPAs capped by MOIT's annual price framework (mandatory for large-scale onshore wind and solar projects starting operation 2026–2030); Direct Power Purchase Agreements (DPPAs) — under Decree 80/2024, updated by Decree 57/2025 and Resolution 253 — which now let private generators sell directly to large consumers and, newly, to retailers in industrial zones, economic zones, and IT parks, with Resolution 253 removing the price cap so deals are fully negotiated (making DPPAs more attractive to corporate buyers); and a smaller-scale, capped FiT-like sell-back scheme for household and some C&I rooftop solar under Decision 08/2020, which functions like limited net metering but isn't a major driver of new large-scale capacity. Underpinning all of this is PDP8 as the binding planning framework — only projects included in PDP8 can proceed, and off-plan projects are blocked — which produced a "reset" after the FiT boom: a multi-year pause while auction and DPPA frameworks were designed, followed by the current, more managed auction/DPPA-driven phase.

Medium Barriers

The auction-based procurement mechanism for onshore wind and solar is formally established under Resolution 253/2025/QH15, with first rounds expected to be implemented from 2026 onward. MOIT is working on implementing decrees and secondary legislation to detail the auction procedures within the existing Electricity Law framework, while a broader revision of the Electricity Law is also underway.

For offshore wind, the policy framework (marine spatial planning, price framework, permitting) is still being developed. Under Resolution 253, offshore wind projects scheduled for operation during 2025–2030 can be directly appointed without an auction, and there is discussion that public sector companies (e.g. EVN subsidiaries, PVN) may develop the first offshore wind projects via this direct appointment pathway.

Medium Barriers

• Transitional projects: negotiated tariffs within MOIT price ceilings.
• New projects (2026–2030): competitive bidding with MOIT price caps.
• DPPAs: negotiated market prices, no cap for private DPPAs.Offshore wind: direct appointment with MOIT price caps.

Medium Barriers

Vietnam’s feed-in tariff (FiT) regime ended in 2020 for solar and 2021 for wind. The auction-based mechanism replacing FiTs is now in force under Resolution 253/2025/QH15, effective from 1 March 2026, with winning bid prices capped by MOIT frameworks.

Medium Barriers

Vietnam's Direct Power Purchase Agreement (DPPA) mechanism was introduced by Decree No. 80/2024/ND-CP which established two models: a "Physical DPPA" allowing privately built and operated transmission lines between a generator and a large consumer, and a grid-connected ("Virtual") model settled via contracts-for-difference alongside standard PPAs with EVN. Decree 80 was replaced by Decree No. 57/2025, which aligned the mechanism with the amended Electricity Law, broadened eligibility for large consumers, and extended DPPA participation to electricity retailers in industrial and economic zones. Standardised contract templates remain limited: there is still no government template PPA for the private-wire model, which is freely negotiated between the parties subject to mandatory content requirements; for the grid-connected model, Decree 57 replaced the more detailed template PPAs under Decree 80 with a shorter set of mandatory key terms, leaving most drafting to negotiation between the parties. Because the framework only became operative in 2024–2025, deal volume has been limited so far, but it has moved beyond signing into actual delivery, with early transactions now supplying power under both the private-wire and grid-connected models.

Low Barriers

Households in Vietnam have the right to install rooftop solar PV systems and self-consume the electricity they generate.

Low Barriers

Under the current framework, prosumers in Vietnam can install rooftop solar and self-consume the electricity they generate. Excess electricity can be exported to the national grid, but only at a capped price set by MOIT, and subject to technical and grid capacity constraints. There is no blanket “zero export” rule, but local grid limitations can restrict or temporarily limit exports in some areas.

Medium Barriers

Decree 135/2024 allows grid-connected self-produced/self-consumed rooftop solar to sell surplus electricity up to 20% of installed capacity at the previous year’s average market price under a five-year PPA. Decree 243/2026 later raised some DPPA-related rooftop-solar excess sale limits to 50%.

High Barriers

General tax/grant incentives are limited for solar and wind power, but Decree 58 introduces technology-specific preferential mechanisms, especially offshore wind and selected solar + storage projects.

Medium Barriers

As of 2024, there are no additional tax incentives, grants or rebates in place for solar PV or wind energy deployment in Vietnam.

Medium Barriers

Low cost capital: Access to low cost capital is sometimes available via concessional finance from international development banks (ADB, KfW, etc).
Low cost capital: Interest rates from Vietnamese banks are typically higher than interest rates in so-
called developed countries.

Medium Barriers

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While carbon pricing does not yet exist in Vietnam, the government launched a pilot ETS scheme in 2025 and has announced its intention to develop a fully functional domestic carbon market by 2029. . The revised Law on Environmental protection (2020) allows for both emissions trading or a carbon tax to be implemented.

Medium Barriers

In June 2025, Vietnam launched a pilot emissions trading scheme which was due to be implemented end-2025 and run until the end of 2028. The pilot ETS covers the power, iron and steel and cement industries.

Medium Barriers

Geospatial assessment of the wind and solar resources in Vietnam have been executed and supported by various international organization, including the World Bank ESMAP program.

Low Barriers

The spatial planning regime for onshore renewable energy projects is very complex, due to the involvement of actors from national, provincial and local level. There are no obligations to reserve a certain share of the land available for renewable energy deployment. Renewable Energy Zones (REZ) have not yet been implemented in Vietnam. Renewable energy installations are not considered “strategic/priority infrastructure” in the spatial planning legislation but rather like any other infrastructure project.

High Barriers

Resolution 139/2024/QH15 established a framework for Vietnam’s National Marine Spatial Planning from 2021–2030 with a vision to 2050. However, project-level zoning, site allocation, survey rights and conflict-resolution still need detailed implementation.

High Barriers

Land-use conflicts are a key determinate for the marine spatial planning process (military, fishery, offshore wind, oil and gas, etc.). For onshore project, some land use conflicts exist in Southern Vietnam, with high population density and good resources for PV and onshore wind.

Medium Barriers

Foreign investors need to obtain land use rights for renewable energy projects by signing a lease contract with the state. Vietnamʼs constitution stipulates that land belongs to the people as a whole, and the state manages it as a unified representative. Vietnamese law does not recognise private ownership of land.

Medium Barriers

Project development for onshore wind and free-standing solar PV project in Vietnam consist of permits from national and provincial actors. Coordination between actors at different political levels has proven to be challenging.

Medium Barriers

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There are dozens of permits and certificates required during the project development process. Donor organizations (GIZ) have developed investor guidelines for onshore wind energy and commercial and industrial rooftop solar PV, including permitting and other project development aspects. The permitting process for onshore wind energy is estimated to take between 2 and 3 years, including 18 months wind measurement. No information is available for offshore wind energy, since the regulatory framework is still not fully in place and no offshore wind project has been developed so far (only nearshore wind, with similar permitting requirements as onshore wind). In the case of rooftop solar PV, important permits include “Construction and Modification Permit”, “Certificate of Eligibility for Fire Prevention” and “Fire Fighting Certificate of Business Registration”.

Medium Barriers

There is no national one-stop-shop agency that helps project developers with acquiring all necessary permits. There are only the aforementioned investor guidelines produced by GIZ.

High Barriers

Under the feed-in tariff previously in place, renewable energy producers theoretically benefited from “take-or-pay” type contract. Every kilowatt-hour produced was remunerated according to the set tariff level. However, since there is no regulation on “curtailment” and curtailment levels increased in the past years, there is effectively no priority dispatch.

Medium Barriers

Vietnam is currently moving towards economic dispatch. Following the passage of Circular 29/2026/TT-BCT, the competitive wholesale electricity market will be launched, however, implementation still needs to be monitored. With the new electricity market design, power producers will be required to sell electricity on the wholesale market, receiving an additional Contract-for-Differences payment on top of the wholesale market price. By obliging power producers to sell on the wholesale market, Vietnam is also implementing economic dispatch in line with the short-term marginal cost of power plants.

Low Barriers

In Vietnam, electricity market liberalization is still at an early stage and many power producers are still remunerated via long-term PPAs based on take or pay arrangement outside of the wholesale market. In 2022, 108 power plants participated in trading in the wholesale market. Many other power plants that are outside of the wholesale market still benefits from take-or-pay type contract with guaranteed capacity factor. Coal fired power plants frequently have PPAs with fixed full-load hours, impeding flexible operation.

High Barriers

The current system is characterized by high forecasting errors, making system integration of RE challenging. Forecasting is done on a plant-level basis. NSMO now has their own in-house developed forecast for solar PV and wind power, on plant level, for dayahead and intraday. EVN NLDC and Energinet had developed new forecasting tools in 2020.

Medium Barriers

Currently, renewable energy generators are not obliged to sell their electricity on the wholesale market. Therefore, aggregators have not yet been institutionalized.

High Barriers

EVN is currently still the single buyer, responsible for aggregating and forecasting. Forecasting errors are not penalizing individual wind and solar PV producers.

Low Barriers

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The revised PDP8 in 2025 raised the BESS target from 300 MW to 10,000–16,300 MW by 2030. Early regulatory frameworks and storage requirements are emerging; the revised PDP8 mandates solar power to include storage batteries with a minimum capacity ratio of 10% and two hours of storage, but procurement and business models are still being developed. EVN has some internal plans to build battery storage for grid stabilization.

Medium Barriers

Most of the dispatchable RE capacity is hydro power. There are already time-variable incentives to operate medium- and small-scale hydro power plants in order to meet peak electricity demand (Circular 29/2019 / TT-BCT). The first pumped storage hydropower (PSH) project Bac Ai with a capacity of 1,200 MW will not be commissioned until 2028. Other dispatchable RE technologies, including biomass, CSP, geothermal, are not specifically supported.

Medium Barriers

There are no specific policy frameworks for virtual power plants. Aggregation is done by the single buyer, EVN, alone.

High Barriers

In the process of electricity market liberalization, the Vietnamese legislators are attempting to force more and more power plants to sell their electricity directly on the wholesale market.

Medium Barriers

Vietnam has adopted time-of-use electricity rates for all consumer groups in order to incentivize demand side flexibility.

Medium Barriers

Policies for EVs and smart charging are still being developed. There are no direct incentives for smart charging (except for the existing time-of-use rates).

High Barriers

Vietnamʼs wholesale market includes a day-ahead and half-hour-ahead market. There are not market closer to actual market performance (e.g. 15 minute intra-day markets) which could make forecasting of RE easier.

Medium Barriers

There are currently no balancing markets in Vietnam. They will likely be established in the coming years as part of next steps related to power sector liberalization and design. A draft circular on new market rules was tabled in April 2024.

High Barriers

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Long-term grid expansion planning exists. The participation of the private sector in grid development is becoming increasingly critical to realize PDP8.

Medium Barriers

The grid expansion planning is part of the PDP8 and thus in line with long-term decarbonization objectives until 2050. However, it is not clear whether the necessary finance can be enabled.

Medium Barriers

Distribution Grid planning follows coordinated planning procedures at provincial level. DOIT (Provincial Power Company / PPC) is responsible for the planning process, as well as the implementation. Each province will hire a consultant to carry out the distribution grid expansion plan for the next 10 year.

Medium Barriers

“The ASEAN Power Grid (APG), first designed in 1997 under the ASEAN Vision 2020, aims to connect power grids across southeast Asian nations through cross-border transmission lines and standardized markets. To date, most cross-border electricity trade has relied on bilateral contracts involving one-way flows. With the ongoing amendment of the Vietnamese electricity law, Vietnam is planning to enhance rules and regulations for cross-national power exchange.

Medium Barriers

Theoretically, independent power producers have access to the electricity grid (that is owned and operated by EVN NPT). Power plants do not have to pay for connection to the transmission grid invested by EVN. However, due to limited grid capacity in many parts of the country, getting grid connection and grid access for new projects is frequently challenging (there is a pipeline of several GW of solar PV in southern Vietnam waiting for grid access).

High Barriers

Generally speaking, ENV NPT (the national utility) is building and operating all transmission and distribution grids in Vietnam. The Vietnamese government has issued two recent directives on DPPAs: Decree 57/2025 creates direct power purchase mechanisms via private connection lines and the national grid, while Decree 243/2026 amends eligible participants, pricing and procedures.

Medium Barriers

Independent power producers under PPAs do not have to pay for using the transmission grid. Grid fees are paid by consumers and not producers.

Low Barriers

After having developed several GW of onshore wind energy and (roof-top) solar PV, the grid connection procedure for RE projects in Vietnam is relatively clear and streamlined. The RE project developer needs to request grid connection approval at an early stage of the project, EVN (the national utility) then executes a grid connection feasibility survey (also verifying the projects technical specifications and alignment with technical requirements). If the assessment is positive, Grid Connection Approval will be granted. Grid connection can be rejected by EVN if not sufficient grid capacity is available. There are no clear deadlines/timelines for the time that EVN can spend on granting grid connection approval. There are also no financial compensations for delayed grid connection. Priority grid connection: There is no priority grid connection for renewable energy projects. Fossil fuel project and RE project are not treated differently in terms of grid connection.

Medium Barriers

Grid connection for rooftop solar PV is simpler than, for instance, grid connection for onshore wind.

Low Barriers

Vietnam follows a shallow connection charging approach. The developer is responsible for any investment from the connection point back to the power plant. The grid operator is responsible for any investment from the connection point toward the regional/ national grid.

Low Barriers

Vietnamese grid code has been considered as having “robust metrics for supply reliability targets and other indications of commitment to maintain customersʼ quality ofsupply and customer service.” A lot of work on improving grid codes has previously been done.

Low Barriers

First policies for a “smart grid program” were passed in 2012 - Decision 1670/QĐ-TTg of the Prime Minister dated 8 November 2012 approving on Smart Grid Development Program followed by Decision Decision 4602/QDBCT/2016 (Building and developing IT infrastructure, SCADA, Control and protection of power system; Modernizing metering infrastructure, Research on the model of organization and deployment of remote co-disconnecting control centers).

Low Barriers

RE power plants with more than 1 MW need to provide their own power forecast and submit it to the dispatch center. However, such individual power forecasts are poor in quality, and the dispatch center has difficulties integrating all individual power forecast. Therefore, EVN has signed a contract with the forecasting provider SOLCAST to set up a system-wide forecast which provides a more efficient solution. Equipment for remote controlled output of RE plants is currently not mandatory.

Medium Barriers

There is no national register with detailed information on all installed plants in Viet Nam. Until now there is also only limited real-time data of power plants available to keep track on their operational behavior.

High Barriers

Dynamic line rating and other innovative grid operation practices have not yet been implemented but are discussed in academia.

Medium Barriers

The role out of smart (digital) meters is already will advanced (more than 60% of residential meters; 100% remote meters at 110kW substations).

Low Barriers

The PDP8 foresees concrete closure and re-purposing plans for existing and new coal and gas fired power plants. This is in line with the countryʼs net zero target for 2050. However, the prime minister had frequently stated that the closure will only take place if it is economically viable and if sufficient donor funding for the energy transition is provided. Resolution 253/2025/QH15 streamlines approval procedures for important, urgent national coal power projects from 2026 to 2030, highlighting the continued focus on coal projects. In addition, several analyses have shown that the massive re-purposing plans (e.g. 20 GW of coal and 20 GW of gas fired power plants to be re-purposed for green ammonia and green hydrogen co-firing) might not be economically viable.

Medium Barriers

The government has strict regulatory control over the planning of new power generation infrastructure via centralized Power Development Plans (PDPs). Additional regulatory (or market based) interventions are not required. There are no explicit investment ban for fossil fuels. Some planned coal fired power plants will still be completed and new LNG/fossil gas infrastructure is still being planned as part of PDP8.

Low Barriers

There are no market-based interventions for the phase out of fossil plans. However, due to the market structure (single buyer market) and the governmentʼs strict regulatory control over the planning of new power generation infrastructure via centralized Power Development Plans (PDPs), no additional market-based interventions are required to reach decarbonization objectives. Carbon pricing policies are currently being prepared.

Medium Barriers

Vietnam has announced its net zero by 2050 commitment at COP26 in Glasgow in 2021. The updated PDP8 of 2023 describes a trajectory for reaching net zero in the power sector (even though the retrofitting of coal and gas for green ammonia and green hydrogen has been criticized for being unrealistic).

Low Barriers

A wholistic strategy for all parts of the economy is still missing. Net zero plans for the transport sector and the industrial/heating/cooling sector are still missing. The national strategy for the oil and gas industry needs to be updated and aligned with net zero targets.

Medium Barriers

Vietnamʼs targets for renewable energy deployment are primarily expressed in the national power development plans (PDP). Traditionally, Vietnam did not include large-scale hydro power in its renewable energy target even though this is now subject to discussions. These targets are indicative (no financial penalties for any party of the planned capacity will not be realized). PDP8 outlines the required installed capacity for all power generation sources between 2025 and 2050 (5 year intervals). Therefore, Vietnam operates with short-, mid-, and long-term targets in the electricity sector.

Low Barriers

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In 2023, the Vietnamese government has approved the National Energy Master Plan (NEMP) for the 2021-2030 period, with a vision to 2050. Targets for renewables in the energy sector (aggregating all sub-sectors) are expressed in the NEMP from 2023: 15-20% by 2030 and at 80-85% by 2050.

Low Barriers

According to the revised PDP8/Decision 768 and Decision 1509, Vietnam has targets of achieving onshore/nearshore wind 26-38 GW, offshore wind 6 - 17GW, solar 46–73 GW and storage 10–16GW by 2030.

Medium Barriers

Technology-specific targets are defined. Onshore wind capacity is to increase from 12 GW in 2025 to 50 GW in 2050. Offshore wind installed capacity is to increase from 2 GW in 2030 to 48 GW in 2050. Large-scale solar PV will increase from 8 GW in 2025 to 100 GW in 2050.

Low Barriers

Targets for the heating and co-generation are expressed in the NEMP, namely 8 to 9 million tonnes of oil equivalent, and about 17 to 19 million tonnes of oil equivalent by 2050.

Low Barriers

Targets for renewables in the transport sector only exist partially (expressed as biofuel targets in the NEPM). There is no overarching strategy for decarbonizing the transport sector.

Medium Barriers

Targets for RE for green hydrogen and synthetic fuels are expressed in the NEMP (hydrogen produced through electrolysis amounting to 10 to 20 million tonnes by 2050).

Low Barriers

There is no specific institution tracking the progress of the energy transition. The Ministry of Industry and Trade (MOIT) is responsible for the energy sector. The General Statistics office is in charge of statistics. The Institute of Energy is periodically publishing general statistics on the energy sector (Vietnam Energy Statistics) but they are not part of a government led tracking process. There is no periodic reporting on target achievement.

High Barriers

New power generation projects are included in the Provincial Power Development Plan (PPDP) – as well as the national PDP. To what extent local communities are involved in this decision-making process is unclear. Typical public consultation processes do not seem to be common practice (and would also not be in line with a more top-down oriented regulatory tradition).

High Barriers

There are no special financial incentives for locally owned RE projects (e.g., no specific FIT levels, no specific criteria in auction design, etc.).

High Barriers

There are no requirements for regional financial participation (e.g., local communities owning a certain share of the projects). 20% of shares)

High Barriers

There are a number of studies that have been executed to analyze socio-economic benefits at national level, including job creation, electricity access and value creation. There are also ongoing assessments for increasing value creation related to solar PV and wind (in cooperation with the central economic committee).

Medium Barriers

There are no specific incentives for socio-economic benefits like job creation of regional value creation baked into the national procurement mechanisms (e.g. selection criteria in auctions). However, several stakeholders in Vietnam (e.g., national assembly, central economic committee) are keen to develop such policies.

High Barriers

At national or sub-national level, there are currently no dedicated re-skilling or up-skilling programs for fossil fuel workers to transition to clean energy technologies or other parts of the economy. However, national utilities (EVN and PVN) are actively developing such strategies for their workers.

Medium Barriers

Not yet. Some initial analysis for coal regions in the northern part of the country (Quang Ninh province) are currently being prepared. There are also no special plans to location clean energy technologies in these areas.

High Barriers

There are also no special plans to locate renewable energy technologies in these areas.

High Barriers