Renewables Growth
Vietnam’s national power development master plan is issued every ten years by the government.¹ This master plan sets out the key principles and objectives for national power development and the high-level plan for achieving them. The national power development master plan for 2021 to 2030 (with a vision to 2050) was approved by the Prime Minister of Vietnam on 15 May 2023 under Decision No. 500/QD-TTg (“8th Power Development Plan” or “PDP8”).
"For wind power specifically, the capacity connected to the national grid in 2030 is planned to be 28 GW."
Under the PDP8, the total installed capacity of the power system is planned to increase from 80 GW in 2023 to 150 GW in 2030. The capacity of renewable sources (including wind, solar, and biomass) is expected to double from 21 GW (accounting for around 26.9% of the system) in 2023 to 42 GW (accounting for around 28.5% of the system) in 2030.
For wind power specifically, the capacity connected to the national grid in 2030 is planned to be 28 GW, with:
PDP8 anticipates that grid-connected offshore wind power will further reach 15 GW by 2035 and 70-91.5 GW by 2050.
In addition, PDP8 provides for the development of offshore wind power not connected to the national grid. This includes for projects to export to other countries or from new energy sources such as hydrogen or ammonia, without imposing any limit on total capacity.
At a government level, the projected growth for offshore wind – in the short, medium, and long term – is anticipated to be rapid.
The plan for implementing PDP8 under Decision 262/QD-TTg dated 1 April 2024 (“PDP8 Implementation Plan”) allocates the 6 GW of offshore wind power to be developed from 2023 to 2030 and divides it up by region:
| No. | Region | Accumulated capacity from 2023 to 2030 |
|---|---|---|
| 1 | Northern region | 2,500 MW |
| 2 | North Central region | 0 MW |
| 3 | Mid Central region | 500 MW |
| 4 | Central Highland | 0 MW |
| 5 | South Central region | 2,000 MW |
| 6 | Southern region | 1,000 MW |
| Total capacity | 6,000 MW |
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"Most projects installed to date with accumulated capacity of just around 1 GW, are in inter-tidal zones."
The PDP8 Implementation Plan assigns major state-owned enterprises Vietnam Electricity (“EVN”) and Vietnam Oil and Gas Group (“PVN”) the obligation to survey conditions to develop offshore wind power projects. This also positions EVN and PVN to prepare to implement offshore wind projects once assigned by the competent authority.
The World Bank’s 2021 survey on Offshore Wind Technical Potential Analysis revealed that Vietnam has an aggregate offshore wind technical potential capacity of around 599 GW⁶. This significant potential arises from Vietnam’s 1800-mile-long coastline and winds averaging 13+ knots in certain coastal areas⁷. However, most projects installed to date with accumulated capacity of just around 1 GW, are in inter-tidal zones. From a technical perspective, such projects are normally classified as “nearshore wind power projects”, rather than “offshore wind power projects” which are constructed farther from shore. Although these two classifications are mentioned in PDP8, current legislation has not clarified the difference between them.
There is a nascent offshore wind industry in Vietnam, with certain projects making progress by obtaining survey licenses upon approval by the competent authorities. For instance, Enterprize Energy’s Thang Long Offshore Wind Power Project has been undertaking survey activities since 2019 and Mainstream Renewable Power’s Ben Tre Wind Farm Project installed LiDAR for wind measurement in 2022. Other investors have also engaged in the market through co-operation with local partners. This includes Corio Generation who signed a Memorandum of Understanding (“MoU”) with a subsidiary of EVN in March 2024 and Equinor who signed an MoU with PVN in March 2021 (and an extension of scope of cooperation in November 2023⁸. Additionally, in August 2023, PVN subsidiary PetroVietnam Technical Services Corporation (“PTSC”), became the first entity to obtain approval for conducting offshore wind surveys for its potential project to export power to Singapore in alliance with Sembcorp Utilities Pte. Ltd⁹.
However, despite all this potential, the development of offshore wind projects in Vietnam has largely come to a standstill. The Vietnamese authorities have not granted any investment or investor selection approval in the offshore wind market in recent years. This is primarily due to the insufficiency of the regulatory framework governing certain stages of the offshore wind development process.
Vietnamese law does establish the general procedure for developing wind power projects. This is provided under Circular 02/2019/TT-BCT dated 15 January 2019 (“Circular 02”) and includes the following stages:
However, in Report No. 9323/BCT-DL dated 29 December 2023 on resolving difficulties to implement offshore wind power projects under PDP8 (“Report 9323”), the Ministry of Industry and Trade (“MOIT”) identified the following key legal issues affecting the development of offshore wind power projects, including:
Details of these legal issues are analysed further in Section 3.
"Circular 02 requires developers to obtain survey results at the proposed project location in a survey period lasting at least 12 consecutive months."
Conducting offshore wind surveys is a critical step in assessing the feasibility of developing offshore wind power projects and represents a mandatory requirement under Circular 02. In particular, Circular 02 requires developers to obtain survey results at the proposed project location in a survey period lasting at least 12 consecutive months before formulating and appraising the feasibility study for the offshore wind project¹⁰.
Under Vietnamese law, the allocation of sea areas to entities for the exploitation and utilisation of marine resources is regulated under Decree 11/2021/ND-CP dated 10 February 2021 (“Decree 11”). However, Decree 11 does not contain regulations tailored to allocating sea areas for survey activities using non-public funds, including offshore wind survey activities. This means Vietnamese authorities do not have legal standing to grant approval to private entities carrying out their survey campaigns. This is a clear block to the progress of offshore wind projects. In October 2022, the Ministry of Natural Resources and Environment (“MONRE”) proposed to the Prime Minister to suspend the processing of applications for offshore wind surveys from investors until the government completely resolve[s] legal and technical challenges, including the inadequate legal basis as mentioned above¹¹.
To address this issue, Decree 11 is being amended to include provisions tailored to facilitate survey activities. These include the authority and procedure of handling requests for survey activities, approval for multiple entities to carry out surveys in a single area, limitations on the period of survey activities and utilisation of the results of survey activities.
Under Vietnamese Law on Investment No. 61/2020/QH14 dated 17 June 2020 (“Law on Investment”), an investment project needs to obtain in principle approval from the competent authority before any investment can take place. Depending on the sector, location, technical characteristics, land use and relocation requirements and other relevant features, the authority responsible for granting such approval will either be the National Assembly, Prime Minister or the provincial people’s committee¹².
Under the Law on Investment, the selection of investors is carried out according to one of the following methods: (i) auction of land use rights in accordance with the land law, (ii) bidding for the selection of investors in accordance with the bidding law, or (iii) the approval of investors in the limited circumstances provided under the Law on Investment¹³.
As reported by MOIT under Report 9323, the current regulations are unclear on both issues of:
Under the PDP8 Implementation Plan, the Prime Minister assigned the responsibility of addressing these issues to the Ministry of Planning and Investment (“MPI”). Specifically, the MPI was assigned the tasks of (i) researching and proposing relevant amendments or supplements to clarify the competent authority for approving the projects and (ii) coordinating with relevant entities in formulating the bidding mechanism to select investors.
Under Decree 31/2021/ND-CP dated 26 March 2021 guiding the implementation of the Law on Investment (“Decree 31”), offshore wind power is listed as a sector with market entry conditions applicable to foreign investors (“Conditional Sector”)¹⁴. As offshore wind is a Conditional Sector, foreign investors are required to comply with market entry conditions published on the national portal on investment by the MPI¹⁵. These conditions may include: (i) a limit on the ownership ratio of foreign investors, (ii) the method of investment, (iii) the scope of investment, (iv) the capability of the foreign investor or investment partner, or (v) other conditions as prescribed under relevant legal documents¹⁶.
So far, the market entry conditions for offshore wind power have not been published on the national portal on investment. This lack of guidance creates difficulties for authorities handling proposals for implementation of offshore wind projects by foreign investors.
As per the Law on Investment, compliance with national master plans is one of the criteria for issuance of in principle approval of investment projects by the relevant authorities¹⁷. Offshore wind power projects are required to comply with relevant national master plans under the Law on Planning, including the national general master plan, national sea area master plan, national land use master plan and national sectoral master plan¹⁸.
To date, all four national master plans for the period from 2021 to 2030 have been approved by the competent authorities¹⁹, including the national sea area master plan which has just been passed by the National Assembly on 28 June 2024²⁰. However, relevant stakeholders, including offshore wind developers, are waiting for the issuance of subordinate guiding documents to provide sufficient basis for implementing the national master plans in accordance with the Law on Planning, including the plan for implementation of the national master plan, as well as the regional and provincial master plans.
For offshore wind power projects selling to EVN, developers are required to negotiate a specific tariff and PPA. The negotiation must follow the method and procedure provided under Circular 07/2024/TT-BCT dated 12 April 2024 (“Circular 07”).
The negotiated tariff will not exceed the maximum tariff annually calculated by EVN and approved by the MOIT in accordance with Circular 19/2023/TT-BCT dated 1 November 2023 (“Circular 19”). The PPA with EVN must follow the standard PPA as provided under Circular 02. However, in case the project opts to participate in the competitive electricity merchant market, the PPA shall follow the standard PPA as provided under Annex III of Circular 07.
Whilst sponsors and EVN are entitled to negotiate and tailor the PPA for their projects subject to MOIT’s approval, both the standard PPAs under Circular 02 and Circular 07 contain certain provisions which raise bankability concerns for sponsors and lenders (tabulated at the end of this article).
"There is uncertainty regarding the conditions and selection criteria for foreign investors entering the offshore wind sector in Vietnam."
Given the regulatory issues analysed above, we set out below key considerations for investors contemplating to enter the Vietnamese offshore wind market:
As a general comment, consenting for offshore wind development will be time-consuming and may take several years, especially when no market precedent has been established.
| Bankability issue | Standard PPA under Circular 02 | Standard PPA under Circular 07 |
|---|---|---|
| Tariffs | Tariffs will be determined monthly following the method set out under Circular 07. The total tariff includes (i) average fixed costs for the relevant year and (ii) average O&M costs for the relevant month. The calculation will consider, amongst other factors, the slippage rate of relevant costs. | |
| Offtake commitment | EVN commits to dispatch all electricity generated from the power plant, except in cases of (i) non-compliance of the power plant with regulations, standards of operation, (ii) installation, reparation, or examination of grid by EVN, (iii) grid-related incidents affecting dispatch of the power plants, and (iv) recovery after grid-related incidents. | Dispatch from power plants will follow the mechanism of the competitive electricity merchant market. |
| Step-in rights | There is no provision granting third party step-in rights to cure Seller’s default. | |
| EVN creditworthiness | There is no mechanism supporting EVN’s performance of PPA payment obligations. | |
| Termination payment | There is no mechanism for termination payment. In case of termination due to Purchaser’s breach, Seller may claim for actual, direct damages and direct loss of benefits, with burden of proof resting on Seller. Purchaser is exempted from liabilities in certain cases, including (i) in case(s) as agreed between the parties, (ii) where Purchaser’s breach is entirely attributed to Seller’s fault, (iii) where Purchaser’s breach is due to compliance with decision of state authority not anticipated by the parties at the time of conclusion of the PPA, and (iv) in the event of default. |
|
| Change in law | There is no change in law provision. | |
| Dispute resolution | Dispute under the PPA will be resolved through negotiation. In case the parties cannot settle within 60 days, the dispute will be referred to the Electricity Regulatory Authority of Vietnam (ERAV) under MOIT. We note that in recent PPAs with renewable power developers, EVN has accepted referring disputes to arbitration at the Vietnam International Arbitration Centre (VIAC). | Dispute under the PPA will be resolved through negotiation. In case the parties cannot settle within 60 days, the parties may refer the dispute to a dispute resolution body mutually selected (e.g., arbitration) or either party may initiate proceeding at the competent court in accordance with the law on civil procedure. |
| Governing law | Vietnamese law is the governing law. | |
Legal Trainee Quynh Nguyen also contributed to this article.
[1] Article 8 of the Vietnamese Law on Planning No. 21/2017/QH14 passed by the National Assembly on 24 November 2017 (“Law on Planning”)
[2] Vietnam Energy Magazine, ‘Vietnam Electricity in 2023 – Operation in turbulence’, 9 January 2024,
[3] The total installed capacity of wind power as of May 2024 is 5,714 MW of onshore and nearshore projects. National Load Dispatch Center, ‘Information on operation of renewable power plants’, 7 May 2024, https://www.nldc.evn.vn/NangLuongTaiTao
[4] Note that currently under Decision 37/2011/QD-TTg dated 29 June 2011 of the Prime Minister on incentives for development of wind power projects in Vietnam (as amended) (“Decision 37”), “offshore wind power project” is defined as “grid-connected project with wind turbine constructed and operated offshore beyond the average lowest sea level line for several years (18.6 years)”, without distinguishing between “nearshore wind power” and “offshore wind power”. It is anticipated that further legislation will be promulgated to clarify the difference between the two types of project.
[5] Table 1, Annex II of PDP8 Implementation Plan
[6] World Bank, ‘Offshore Wind Technical Potential in Vietnam’, January 2021,
[7] The Maritime Executive, ‘Foreign Investors Line Up for Vietnam’s Offshore Wind Boom’,
[8] PetroVietnam News Portal, ‘Petrovietnam and Equinor facilitate cooperation in the field of clean energy’, 3 November 2023,
[9] Government News Portal, ‘Consortium PTSC-Sembcorp granted license to conduct offshore survey for offshore wind power projects’, 30 August 2023,
[10] Article 5 of Circular 02
[11] Vietnam Energy Magazine, ‘Problems and solutions in handling proposals for offshore wind survey’, 6 October 2022,
[12] Article 30 to 32 of the Law on Investment
[13] Article 29 of the Law on Investment
[14] Item 12 Part B Annex 1 of Decree 31
[15] Article 17 of Decree 31
[16] Article 9 of the Law on Investment
[17] Article 33.3 of the Law on Investment
[18] Article 5.1 of the Law on Planning
[19] For the period from 2021 to 2030: (i) the national general master plan was passed by the National Assembly on 9 January 2023 under Resolution No. 81/2023/QH15; (ii) the national land use master plan was passed by the National Assembly on 13 November 2021 under Resolution No. 39/2021/QH15; (iii) the national master plan for the power sector (i.e., the 8th Power Development Plan) was approved by the Prime Minister on 15 May 2023 under Decision No. 500/QD-TTg; (iv) the national sea area master plan was passed by the National Assembly on 28 June 2024 under Resolution 193/2014/QH15).
[20] Notably, under the national sea area master plan passed by the National Assembly under Resolution 193/2024/QH15 dated 28 June 2024, in case of overlapping among sea areas allocated for different purposes, the order of priority for allocation will be (i) national defence and security; (ii) protection and conservation of marine ecology; and (iii) economic development. Among economic development purposes, the order of priority will be (i) marine tourism and services; (ii) maritime transportation; (ii) exploitation of petroleum other marine natural resources; (iv) aquaculture and seafood exploitation; and (v) renewable energy and other new marine sectors. However, in necessary circumstances, the provincial people’s committees and relevant ministries may propose to the Prime Minister to adjust the order of priority for specific sea areas based on analysis of economic, social, and environmental impacts and potential in enhancing protection of maritime border and national defence.
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Foreign Legal Consultant Hanoi
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