Experts are calling on the state to create more space for private sector investment in the national energy system, particularly within the competitive electricity market. Such a move is expected to ease the burden on the national budget while driving technological innovation and encouraging deeper corporate participation in the energy sector.

Three Major Opportunities for Businesses

At a recent forum titled “Building a Transparent and Competitive Energy Market: Challenges and Opportunities for Businesses,” participants highlighted that Vietnam’s legal framework for a competitive wholesale electricity market remains incomplete. This lack of clarity has historically limited private sector involvement.

Mr. Nguyen Quang Huan, a member of the National Assembly’s Committee on Science, Technology, and Environment, noted that while numerous energy regulations exist, there is significant overlap between the laws on electricity, planning, investment, bidding, land, and environmental protection. These regulatory intersections create legal gaps and procedural complexities that hinder both businesses and regulators.

Despite these hurdles, Dr. Nguyen Huy Hoach from the Scientific Council of Vietnam Energy Magazine identified three major opportunities emerging during this transition. First is the continuous surge in power demand, which is projected to grow by an average of 10% annually. This necessitates massive private investment in renewable energy, LNG, pumped-storage hydropower, transmission infrastructure, and battery storage.

Second is the rapid expansion of market mechanisms between 2025 and 2030. This timeline includes a pilot for two-component electricity pricing by late 2025, a fully operational competitive wholesale market after 2026, and a retail market expected after 2027. These milestones will create new business niches for energy firms and support services. Third is the trend toward green and digital operations, offering entry points into distributed renewables, smart grids, and carbon credits.

Regarding power sources, Mr. Nguyen Quoc Dung, Head of Sales at Vietnam Electricity (EVN), observed that traditional hydropower is nearly exhausted. Future growth will rely on LNG, nuclear power, and offshore wind—sectors requiring immense capital. He emphasized that the role of the state and state-owned enterprises remains vital due to their technical and operational expertise.

From an FDI perspective, Mr. Nguyen Anh Tuan, Chairman of the Association of Foreign Invested Enterprises, noted that international investors are closely monitoring energy policies, pricing, and market stability. Many are currently “waiting on the sidelines” for specific policy mechanisms before deploying capital. He warned that a lack of urgent action could lead to missed investment opportunities.

Strengthening Private Sector Participation

To lower barriers, Dr. Nguyen Huy Hoach recommended a synchronized and predictable legal framework. Key priorities include finalizing Direct Power Purchase Agreements (DPPA) for FDI and industrial firms and implementing a truly market-based pricing mechanism.

Experts also stressed the need for a legal corridor allowing private investment in transmission and energy infrastructure. This could involve public-private partnership (PPP) investment models under controlled conditions, such as BOO (Build-Own-Operate) or BOT (Build-Operate-Transfer) contracts for power lines and substations. Transparency in transmission planning and connection priorities is also essential.

“Removing barriers and reducing risks while expanding business opportunities will be the key to attracting domestic and foreign investors,” Dr. Hoach emphasized.

Mr. Nguyen Quang Huan added that the comprehensive amendment of the Electricity Law must be a top priority to push competitive power market in Vietnam.

He also urged the early issuance of guidance for DPPA implementation, which would allow FDI firms to purchase clean energy directly from renewable plants.

To ensure market integrity, experts called for a more independent energy regulator and the integration of digital technology in market monitoring. They argued that a sustainable market requires a transparent, fair, and stable environment.

Beyond legal reforms, the state could support businesses through green credits, tax incentives for clean energy, and transparent Public-Private Partnerships (PPP). Most importantly, ensuring equal access to the national grid and transmission infrastructure is vital to encourage deeper corporate investment.

Mr. Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), concluded that while restructuring the energy sector, state-owned enterprises should maintain their lead in key areas. However, production and business tasks must be clearly separated from political and public utility missions to allow the private sector to compete effectively in energy services and supply.