Between 2018 and 2023, Vietnam added over 21,000 megawatts (MW) of solar and wind capacity. This increase was supported by feed-in tariffs (FiTs) and brought in both local and joint venture investments. Nearly 58% of the funding came from domestic sources. Vietnam became the largest solar power producer in Southeast Asia during this period.
Electricity costs for the utility Vietnam Electricity (EVN) also increased. Power purchase payments went from $4.5 billion in 2018 to $11.5 billion in 2023. EVN’s revenue did not grow as fast. The utility reported over $1 billion in losses in 2023. Electricity retail prices remained regulated and below generation costs.
In late 2023, an audit by the Government Inspectorate found 14 solar projects in Ninh Thuan had received FiTs they were not eligible for. The Ministry of Industry and Trade (MoIT) had approved 154 projects without clear legal basis. As a result, 173 solar and wind projects had their tariff terms reduced. The cut in expected revenue ranged between 25% to 46%.
Developers warned that changes might cause bankruptcies and reduce investor trust. Despite the shift, Vietnam’s revised Power Development Plan 8 (PDP8) targets 73 GW of solar and 38 GW of onshore wind by 2030.
Solar and wind projects continue to be easier to build than gas-fired plants. New gas projects require high capital and fuel costs, often in foreign currency. Solar and wind systems need lower capital and can be built faster.
Vietnam is now focusing on green auctions, direct power purchase agreements (DPPAs), and energy storage. A 2024 decree allows DPPAs between private developers and customers. PDP8 also includes $18 billion for transmission upgrades and plans for 10-16 GW of battery storage.
Vietnam’s domestic solar manufacturing can meet local demand. Reducing reliance on imported liquefied natural gas (LNG) is also a focus, due to the cost and currency risks.
By moving toward auctions and private power deals, Vietnam is adjusting its clean energy plan to be more cost-efficient while maintaining grid reliability.
