VIETNAM Trends and Developments Contributed by: Adam Moncrieff and Thuy Huynh, Orrick
The new PDP8 goal of 10 to 16.3 GW of BESS by 2030 is quite ambitious, and is trying to address curtailment in provinces with significant renewable energy genera- tion but where investment in transmission infrastruc- ture has lagged. Transmission is limited between the north and the south, and the fast growth of industrial demand throughout the country has led to a need for more flexibility. Circular No 62 of the MOIT in 2025 was important, set- ting Vietnam’s first pricing rules for standalone, grid- connected BESS projects. These rules apply to BESS systems on the national grid at 110 kV or higher, with at least 10 MW capacity, and in line with PDP8. They do not cover BESS paired with renewables or projects developed by EVN power companies. Other storage types are less defined. Solar-plus-stor- age gets pricing benefits under Decision No 988/QD- BCT dated 10 April 2025, while factory or data centre storage is mainly used for peak shaving, backup, tariff savings or internal energy needs. Some issues remain unclear. Developers still need details on project selection, price caps, dispatch rules, testing, performance standards and BESS PPA for- mats. BESS will become more important in Vietnam, but standalone grid storage, co-located renewable storage and behind-the-meter storage each need to be considered separately. Gas is needed, but bankability is not there yet Gas-fired power remains part of Vietnam’s reliability strategy. LNG and domestic gas are treated as transi- tion fuels and as sources of dispatchable capacity that can support a system with more solar and wind. The Revised PDP8 keeps both LNG and domestic gas as important parts of the planned electricity generating mix. A number of LNG-to-power projects are in the early implementation stages but still face issues around predictable cash flows, fuel cost recovery, foreign exchange protection and a support period long enough to support limited-recourse debt. Decree No 56 introduced a minimum contracted quantity mechanism for LNG-to-power projects. The
existing framework has referred to a 65% minimum contracted output for a period linked to loan repay- ment, capped at ten years from commercial operation. There have been some draft proposals to increase that figure to 75% and extend the support period to 15 years, which could be helpful but may still fall short for long-tenor project financing. Fuel pass-through also needs to be clarified. LNG price change, transportation, storage, regasifica- tion, terminal costs and foreign exchange exposure all need to be addressed in the tariff. If those costs are only partly recoverable, or if recovery depends on annual negotiation rather than a clear formula, lenders will price the risk heavily or decline to lend. Domestic gas projects are somewhat better posi- tioned because dispatch can be linked to gas sup- ply availability and upstream commitments. Even so, the PPA and gas supply arrangements need to work together. A project can be exposed if it must pay for gas it cannot convert into paid electricity or if the gas supply term does not match the PPA revenue period. Last year’s clarification that domestic gas-fired pro- jects can participate in the Vietnam Wholesale Elec- tricity Market indirectly is useful. It points towards a model where dispatch is linked to contractual com- mitments rather than price bidding. LNG-to-power project developers will be watching to see whether a similar approach can be used for gas-fired power projects using imported LNG, because direct market participation without some kind of minimum dispatch commitments will make it difficult to achieve commit- ted LNG supply and obtain finance. Offshore wind needs more than targets Offshore wind remains one of Vietnam’s largest long- term renewable opportunities. Vietnam has good wind resources, a long coastline and a clear policy interest in developing offshore wind as part of its industrial and energy strategy. The Revised PDP8 retains off- shore wind in the planning framework, although much of the larger capacity build-out is expected to fall into the 2030 to 2035 period rather than being delivered immediately.
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