VIETNAM Trends and Developments Contributed by: Justin Gisz, Minh Duong and Phong Nguyen, Asia Counsel Vietnam Law Company Limited
RTS systems to EVN (or relevant Power Corpora - tions), capped at 20% of the RTS system’s gener - ated output. • Simplified regulations: Off-Grid Projects of any capacity, and Grid-Connected Projects with capacity of less than 1 MW or not selling excess electricity to EVN (or any Power Corporation) are exempt from registration procedures (although they are subject to notification requirements) with the relevant DOIT, thereby streamlining project imple - mentation. Electricity Operating Licences are only required for Grid-Connected Projects with a capac - ity of 1 MW or greater that choose to sell surplus electricity to EVN (or relevant Power Corporations). • Quota exemptions: Off-Grid Projects are not sub - ject to provincial or municipal quotas. Certain Grid- Connected Projects, such as those developed by residential consumers with a capacity below 100 kW or those equipped with zero-export devices, are also exempt. Developers still have available to them various alterna - tive contract models which can lawfully be deployed in circumstances where (before the introduction of Decree 58) they would previously have applied the tra - ditional power purchase agreement model in respect of RTS projects in Vietnam. The key example is an equipment lease model. Equipment lease models ena - ble developers to lease RTS systems to power con - sumers, allowing them to self-consume the electricity that they self-generate using leased RTS systems. Amended law on electricity On 30 November 2024, the National Assembly of Viet - nam adopted the Amended Law on Electricity, which took effect from 1 February 2025 (“Law on Electricity 2024”). The Law on Electricity 2024 provides for compre - hensive reform in respect of Vietnam’s power sector and aims to support the country’s transition toward a cleaner, more efficient, and competitive electricity market. For the first time, the Law on Electricity 2024 introduc - es a dedicated chapter on the development of renew - able and new-energy electricity, covering resource surveys, investment approval, project implementa -
tion, upgrading, and decommissioning. In particular, it expressly includes offshore wind projects, provid - ing a clear framework for survey licensing, investment policy approval, and investor selection, marking a sig - nificant policy milestone. The Law on Electricity 2024 further develops the elec - tricity market model initiated under the previous legis - lation. It explicitly introduces new market instruments, including forward contracts, options, and futures con - tracts, supplementing existing spot-market mecha - nisms. A new two-component electricity tariff, which comprises a capacity charge and an energy charge, is introduced for large consumers, reflecting interna - tional practice and enabling more transparent cost allocation. EVN has carried out a pilot calculation of the two-component electricity tariff since October 2025 as a basis for its official implementation in the future. Investment procedures have also been revised, one aim being to provide a platform on which urgent or essential power projects may follow simplified approval procedures, while investor selection for a project must be conducted through competitive bid - ding where two or more potential investors are iden - tified. The objective of such changes is to enhance transparency and accelerate project deployment. The Law on Electricity 2024 dedicates a chapter to protection of power works and facilities. It enhances obligations regarding maintenance, operational safe - ty, and coordination between power enterprises and local authorities to ensure reliable and secure electric - ity supply. It also clarifies the roles and responsibili - ties of electricity market participants from generators and transmission operators to distributors and con - sumers under a unified regulatory framework. Finally, it explicitly links electricity development to national energy transition policies, encouraging innovation, technology localisation, and investment in rural, bor - der, and island regions to ensure equitable access to electricity. GHG emission reduction and carbon market Vietnam is strengthening its commitment to combat - ting climate change, with Decree 119/2025/ND-CP, effective from 9 June 2025, amending Decree No 06/2022/ND-CP on greenhouse gas (“GHG”) emis - sions reduction and ozone layer protection (“Decree
743 CHAMBERS.COM
Powered by FlippingBook