The amended Electricity Law set to take effect on February 1, 2025, is a game-changer for Vietnam’s energy landscape. It’s not just a bureaucratic shuffle; it’s a strategic move aimed at turbocharging the renewable energy sector, especially for businesses that are already knee-deep in energy infrastructure and power generation. According to Saigon Securities, major players like REE Corporation, Ha Do Group, Bamboo Capital, PC1 Group, and Lizen are poised to reap significant benefits from the new regulations.
Take REE Corporation, for instance. This company is pivoting sharply towards renewable energy and hydropower, shedding its coal-fired assets. They’ve recently made headlines by acquiring the 48 MW Duyen Hai wind farm in Tra Vinh for a cool VND2.2 trillion ($86.7 million). With construction slated to kick off in Q2 2025, REE is clearly betting big on wind energy. Meanwhile, Ha Do Group, which derives a whopping 61% of its revenue from its energy segment, boasts seven wind power plants with a combined capacity of 748 MW. The company is waiting for new pricing mechanisms to greenlight its investments, including the Phuoc Huu wind power plant, which is set to start construction in January next year.
Bamboo Capital’s BCG Energy is no slouch either. With eight wind power projects totaling 925 MW in the pipeline, the company aims to hit a renewable energy capacity of 2 GW by 2026. They’re diversifying their portfolio, having recently acquired a waste-to-energy plant in Ho Chi Minh City. PC1 Group, with its fingers in various pies including hydropower and construction, is also gearing up for the new law to spur growth in electricity infrastructure investment.
The amended law doesn’t just benefit these established players; it also sets the stage for newcomers. Lizen, traditionally focused on transportation, is making a push into renewable energy with investments in solar and wind projects. This shift could position them as a key player in Vietnam’s energy transition.
One of the most significant aspects of the new law is the reform of electricity pricing, which could help the state utility, Vietnam Electricity (EVN), mitigate its losses. The proposed two-tier pricing model will charge based on both the capacity registered for use and actual energy consumption, rather than solely on consumption. This could encourage consumers to be more efficient with their electricity use, ultimately benefiting the entire system.
The law is also a cornerstone of Vietnam’s ambitious goal to achieve net-zero emissions by 2050. By simplifying procedures for urgent energy projects and incentivizing private investment in energy storage systems, the government is signaling a clear shift away from fossil fuels. The focus on developing renewable sources like wind, solar, hydrogen, and ammonia is crucial, especially as the country looks to establish a robust energy framework.
Additionally, the law emphasizes the development of gas-fired power plants, particularly those utilizing domestic gas and liquefied natural gas (LNG). This could pave the way for a more balanced energy mix, supporting the regulation of the electricity system.
With a high-level development policy for nuclear energy also on the horizon, Vietnam is laying the groundwork for a comprehensive energy strategy that includes all forms of clean energy. The amended Electricity Law is not just a legislative update; it’s a bold declaration of Vietnam’s commitment to a sustainable energy future. As these changes roll out, the ripple effects will undoubtedly shape the future of energy in Vietnam and beyond.