Vietnam's renewable energy sector is poised for a major transformation with the approval of the new Electricity Law by the National Assembly. Taking effect from February 1, 2025, this comprehensive legislation replaces the existing framework that has governed the sector for nearly two decades.
The new law arrives as Vietnam aims to generate over 60% of its electricity from solar and wind by 2050. This regulatory update is a key step in Vietnam's shift to decarbonisation. The law sets clear guidelines for all renewable energy sources—solar, wind, ocean, geothermal, biomass, hydropower, and waste-to-energy. It also focuses on offshore wind power, offering investment incentives and specific project requirements to support its growth.
Key Regulatory Changes
Reflecting Vietnam's pledges to the issue of energy transition and energy security, the updated Electricity Law is in line with the Power Development Plan VIII and its implementation plan. The new law introduces a multi-component electricity price mechanism to eliminate cross-subsidies and implement market-based tariffs for different energy sources.
The law makes several important changes to help renewable energy grow:
Simplified approval processes for urgent energy projects
Incentives for small hydropower and offshore wind initiatives
Special mechanisms for Direct Power Purchase Agreements
Establishment of renewable energy industrial centers
The law provides guidelines for offshore wind power development, defining projects with turbines beyond six nautical miles from the coast. These projects will receive significant support, including sea area levy exemptions during construction and 50% reductions for 12 years after commercial operation. The Ministry of Industry and Trade will manage these changes. The framework aims to create a unified, competitive energy market and attract investment in renewables.
Vietnam's new Electricity Law marks a significant step toward sustainable energy development. With a comprehensive framework of 81 Articles across 9 Chapters, the legislation provides clear pathways for renewable energy growth. However, over 60 provisions require further guidance, which is expected to be detailed in approximately 7 Decrees and 3 Prime Ministerial Decisions, along with around 20 Ministerial Circulars.
Staying Ahead in Vietnam’s Evolving Energy Landscape
As Vietnam embarks on its ambitious renewable energy transformation with the new Electricity Law and its subsequent guidelines, it’s essential for businesses operating in the sector to stay ahead of regulatory requirements. ESC is here to support your compliance with the latest regulations, ensuring your operations are fully aligned with the new legal framework, effective from February 1, 2025.
Our EHS Legal Register subscription offers you an easy and efficient way to stay informed and compliant with Vietnam’s evolving energy regulations. With regularly updated content and a tailored approach to your industry’s specific needs, ESC provides the tools you need to navigate complex regulatory landscapes and contribute to the country’s decarbonisation goals.
Subscribe now to receive your tailored EHS Legal Register and ensure seamless compliance with Vietnam’s new Electricity Law!
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