Vietnam’s electricity sector is undergoing rapid expansion and transition, driven by significant economic growth and public policy aimed at increasing clean energy sources under the Power Development Plan VIII (PDP VIII) 2021-30, with a vision towards 2050. To support the country’s aim of achieving an average annual GDP of 10 per cent between 2026 and 2030 and up to 7.5 per cent during 2031 to 2050, the government approved Decision No. 768/QD-TTg in April 2025, officially amending PDP VIII. In comparison, the original PDP VIII (approved in May 2023) was built around an expectation for GDP growth of 7 per cent annually between 2021 and 2030. This amended framework signals Vietnam’s strategic recalibration of its electricity infrastructure development to align with rapidly evolving economic realities, driven by industrial expansion, urbanisation and the proliferation of data centres, as well as international climate commitments.
It revises capacity addition goals (from 90.5 GW to up to 99.9 GW by 2030), with continued focus on renewable energy and introduction of nuclear power, and increases corresponding investment in new generation, storage and grid infrastructure. A fundamental shift introduced by the Amended PDP VIII concerns adjusting the planning timeline from 2021-30 to 2025-30, with an additional outlook for the period 2031-35. This adjustment reflects the fact that capacity growth between 2021 and 2024 fell short of expectations, with project execution and grid expansion facing persistent delays. By resetting the baseline to 2025, the amended plan accounts for these setbacks and establishes a planning horizon through 2035, offering a more realistic and coherent framework for long-term development.
The Amended PDP VIII cannot be understood in isolation from Vietnam’s broader legal transformation in the electricity sector. The new Electricity Law, 2024, effective February 1, 2025, replaces the 2004 law and modernises the sector’s framework by clarifying market structures, promoting competition in generation and retail, and creating clearer rules for renewable energy, direct power purchase agreements and grid modernisation. Complementing this, Decree 56, effective from March 2025, provides detailed implementation guidance – setting out project approval processes, investment conditions and responsibilities for central and provincial authorities. In line with these reforms, the amended PDP VIII introduces critical operational distinctions: projects of 50 MW or more fall under centralised planning, while smaller projects below 50 MW but connected to the 220 kV grid, particularly hydropower, biomass and waste-to-energy, are subject to streamlined provincial procedures. These thresholds strike a balance between national oversight and local flexibility, ensuring that projects with significant grid impact remain centrally managed while allowing smaller ones to advance more efficiently.
Following these regulatory changes, the PDP VIII Implementation Plan was released in May 2025 to provide the necessary detailed operational guidance for translating the strategic framework into actionable project development pathways. This implementation plan was crucial in bridging the high-level policy objectives established in the Amended PDP VIII with practical project execution requirements, providing stakeholders with the much-needed clarity on regulatory procedures and performance metrics that had been lacking in previous planning cycles.
Renewable Watch examines how the Amended PDP VIII recalibrates Vietnam’s electricity demand projections, installed capacity targets and transmission infrastructure development compared to the original framework.
Electricity demand growth: The economic growth driver
The amended economic growth assumptions are reflected in the updated electricity demand forecasts. Under the original PDP VIII, consumption was projected to reach about 505.2 TWh by 2030 and between 1,114.1 TWh and 1,254.6 TWh by 2050. The amended plan adjusts these figures upward: demand in 2030 is now expected to range from 500.4 TWh to 557.8 TWh, with a 2050 orientation of 1,237.7 to 1,375.1 TWh. As already mentioned, this demand growth is driven by Vietnam’s manufacturing sector expansion, particularly in electronics, textiles and automotive assembly, as the country positions itself as a manufacturing hub within global supply chains.
The capacity adjustments in the Amended PDP VIII reveal Vietnam’s strategic pivot towards renewable energy dominance while maintaining energy security through diversified sources. The most striking transformation appears in solar power capacity, which increases dramatically from 12,836 MW in the original plan to a range of 46.16-73.42 GW in the amended framework, representing a potential fivefold increase that positions solar as Vietnam’s dominant power source by 2030, accounting for about 63.2 per cent of the energy mix. This solar expansion reflects both technological cost improvements and Vietnam’s recognition of its exceptional solar resource potential, particularly in the southern regions. The wide range in the amended targets provides flexibility to accommodate varying development scenarios, acknowledging that solar deployment rates depend heavily on grid infrastructure development, land availability and regulatory streamlining.
Onshore wind power targets have also increased significantly from 21.8 GW to 26.06-38.03 GW. Meanwhile, offshore wind (OSW) targets have been amended from 6 GW by 2030 in the original plan to a potential 17 GW by 2035 in the high scenario. This nearly threefold increase over five years reflects both the enormous potential of Vietnam’s 3,260 km coastline and the practical challenges of developing this emerging sector from scratch. The amended plan makes a critical adjustment by extending the OSW development timeline to 2035, acknowledging that, due to an insufficient regulatory framework, no approval has been granted for the development of OSW projects to date.
Notably, the amended plan adjusts the timeline for gas-fired power development, with domestic gas-fired thermal power potentially declining to 10.86 GW in the low scenario (compared to the original 14.93 GW target), while liquefied natural gas (LNG)-fired thermal power remains relatively stable at 22.52 GW. This reflects Vietnam’s strategy to use natural gas as a bridge fuel during the renewable energy transition, positioning LNG capacity to provide grid stability and backup power as intermittent renewables scale up. These adjustments, along with the postponement of some OSW capacity beyond 2030, are more than compensated by the substantially higher solar and OSW targets, ensuring overall capacity growth while allowing more time for gas infrastructure and OSW regulatory frameworks to mature.
OSW development faces significant technical challenges, including the need for specialised port infrastructure, supply chain development and grid reinforcement to handle large-scale OSW installations. The regional distribution strategy concentrates initial development in areas with optimal wind resources and transmission infrastructure access.
The concentration of 65 per cent of OSW capacity in the northern region reflects both superior wind resources and proximity to major industrial demand centres around Hanoi and Haiphong. However, this geographic concentration creates significant transmission infrastructure challenges, requiring substantial submarine cable installations and onshore grid reinforcement to handle large-capacity injections at specific connection points.
The treatment of thermal power sources reveals Vietnam’s nuanced approach to energy transition. While coal-fired power installed capacity remains relatively stable at around 30 GW up to 2030, this represents a declining share of the total capacity mix. Vietnam aims to complete the coal phase-out by 2050. Only coal-fired power projects previously approved in the Amended PDP VII (also known as PDP7R) may continue for development. This approach balances energy security concerns with decarbonisation objectives by maintaining existing commitments while preventing new coal development.
For efficient renewable energy integration and provision of grid stability services, the target for battery energy storage systems (BESSs) increases from a minimal 300 MW to 10-16.3 GW. The plan also emphasises large-scale pumped storage hydropower projects to provide grid balancing services.
Further, the revival of nuclear power development, with the Ninh Thuan nuclear power project, represents a significant policy reversal aimed at providing baseload power for long-term energy security.
Investment requirements: Scaling up Vietnam’s energy infrastructure financing
As Vietnam is expected to see higher capacity additions over the next two and a half decades, the Amended PDP VIII breaks down the investment requirements into three timelines with a total of $136.6 billion for the first five-year period alone. Compared to the original PDP VIII, the total required investment to develop projects until 2050 increases by around 21 per cent.
The increase in investment reflects both the expanded capacity targets and enhanced electricity demand expectations in the amended framework. The most significant increase occurs in generation investment, rising from $511.2 billion to $655.3 billion during 2031-50, while transmission investment requirements grow from $38.6 billion to $43.8 billion during the same period, representing a strategic rebalancing of infrastructure investment priorities.
The scale of investments highlights the critical importance of developing robust financing mechanisms that can mobilise both domestic and international capital to support the programme.
Conclusion
Vietnam’s Amended PDP VIII represents a comprehensive recalibration of the country’s energy strategy, scaling up renewable energy targets while extending development timelines to reflect the practical realities of implementation. The amended framework’s emphasis on solar and OSW development, coupled with strategic transmission grid modernisation and regional connectivity initiatives, positions Vietnam as a potential renewable energy hub within Southeast Asia. However, the success of this ambitious $835.4 billion investment programme hinges critically on resolving regulatory gaps, particularly for OSW development, and establishing transparent pricing mechanisms that can attract the substantial private capital required. Ultimately, the plan’s implementation will serve as a crucial test of Vietnam’s institutional capacity to manage one of the most ambitious energy transitions while maintaining economic growth and power demand. n
