Foreseeing the potential future for the solar power sector in Vietnam, the Government has proposed policy and regulatory frameworks to encourage private enterprises to promote and create a better working environment and enhance the economy’s living standard.
The favorable weather and geographical location in Vietnam have benefited the renewable energy industry. According to Rapid Transition, Vietnam’s green energy sector was one of the 5 ASEAN countries in the ranking of the top 10 countries with the largest solar capacities in 2021 around the World. In addition, the growth rate has increased significantly from the top 196 to the top 9 in 11 years.
Grasp the opportunities, the governmental authorities have been determining, demonstrating, and nominating the energy strategies that comply with international standards, also supporting the foreign direct investment to choose Vietnam as their most considerable destination. Here are some of the critical policies and regulations:
1. Environmental Protection Law in 2020
Vietnam’s Environment Protection Law 2020 (LOEP 2020), enacted in 2020, governs various environmental issues. The law establishes rights, obligations, responsibilities, and principles for environmental protection, outlining requirements for ecological conservation in managing persistent organic pollutants (POPs), streamlining administrative processes, narrowing the entities required to carry out environment registration, and simplifying managerial procedures.
2. Investment Law in 2020
Vietnam’s Investment Law 2020, enacted in 2020, propulates several modifications to the investment environment. Among the most significant amendments is creating an adverse list identifying sectors and businesses where foreign investment is prohibited or limited. Besides, the repeal of Vietnam’s requirement that international investors first obtain an investment registration certificate. Additionally, the formation of an investing one-stop shop to simplify the procedure for investors.
3. Electricity Law in 2018
Electricity Law 2018, enacted in 2018, governs the electricity sector in Vietnam. The law lays out the legal requirements for planning and investing in the development of the electricity sector, as well as encourages and accelerates conservation in electricity production, transmission, distribution, and use. It also outlines the rights and responsibilities of businesses and individuals producing and utilizing electricity. The law also establishes a legal foundation for developing a competitive electric power market and strengthens the legal framework for activities in Vietnam connected to electricity.
4. The Prime Minster’s Decision No. 13/2020/QĐ-TTg
The Prime Minister’s Decision No. 13/2020/QD-TTg, enacted in 2020, establishes the feed-in tariffs and promotes the growth of solar energy in Vietnam. According to this policy, investors in rooftop solar power projects can enter into a private power purchasing agreement (PPA) or a model PPA with Vietnam Electricity Group (EVN) or its members to sell the energy produced by their rooftop power system.
5. The Prime Minister’s Decision No. 896/QĐ-TTg
The Prime Minister’s Decision No. 896/QD-TTg, enacted in 2022, develops a proactive and effective strategy to control climate change, mitigate greenhouse gas emissions to achieve zero carbon footprint, and allocate the preventions for risks and vulnerabilities due to climate change.
6. Power Development Plan VIII (PDP 8)
Power Development Plan VIII (PDP 8), enacted in 2022, is a national master plan for developing power sources and transmission grids. It intends to increase renewable energy production while phasing out coal-fired power stations. Additionally, it promotes the building of liquefied natural gas (LNG) facilities and links up its national grid with those of its neighbors. It aims to become carbon neutral by 2050 and calls for investments totaling US$134.7 billion USD by 2030.
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