The Government Standing Committee’s conclusions on the Power Development Plan for 2021-2030

On 06 September 2022, the Government Office issued Notice No. 277/TB-VPCP of the Government Standing Committee’s conclusions on the Power Development Plan for 2021-2030, with a vision towards 2045 (“PDP8”) (“Notice 277”). Notice 277 provides an update on the issues impacting the drafting and finalization of PDP8 presenting (i) the Prime Minister’s (“PM”) key principles and viewpoints and (ii) the requirements for the Ministry of Industry and Trade (“MOIT”) to draft and finalize the PDP8.

Some key principles and viewpoints

• National interests are prioritized over local, regional or group interests;
• The target of net zero emissions by 2050, as made by Vietnam’s international commitment at COP26, shall be met;
• There shall be an optimal overall plan and plan for five specific sections,e., power supply, power transmission, power distribution, efficient use of power, and power price; and
• Reasonable and effective contents in PDP7 and amended PDP7 shall be kept while any problems regarding the management and implementation of those two plans shall be settled.

Some requirements for MOIT

• To update PDP8 with a vision to 2050 to be in sync with national and sectoral master plans;
• To reduce coal power projects by 2030: besides those coal projects already removed from PDP8 as reported, MOIT to work with investors on project feasibility and alternative solution plans in other projects which are facing financial difficulties;
• To review the feasibility of domestic gas-fired power projects; to reduce the potential of imported LNG power sources as well as to scale up wind power reasonably and feasibly;
• To review the solar power supply plan and to assess the impact of rooftop solar power supply for self-consumption, without connecting to the national grid;
• To consider the imports of electricity from neighboring countries, especially Laos, and to scale up the development of sources such as biomass, hydrogen and flexible power; and
• To conduct in-principle research on appropriate legislative and regulatory mechanisms to facilitate the implementation of PDP8.

Notice 277 does not provide a specific deadline as to when PDP8 will be finalized and approved. For the time being, investors are longing for further regulations and guidelines for the Vietnamese power market, especially in the context of the feed-in tariff regimes for solar and wind power (already expired in December 2020 and October 2021 respectively) without any replacement mechanism implemented for projects currently being developed.