Việt Nam’s power sector stands on the brink of transformative growth, driven by an economy rebounding with ambitious targets. The government’s commitment to achieving a GDP growth rate of at least 8 percent by 2025 places electricity at the heart of sustaining industrial and economic activities. This urgency is reflected in the Ministry of Industry and Trade’s outlined scenarios for electricity supply in 2025, highlighting the critical need for an increase in power generation capacity.
Under the baseline scenario, the electricity sector must achieve growth rates of 11-12 percent, with dry-season months demanding an even steeper rise of at least 13 percent. The high-growth scenario anticipates a 12-13 percent increase overall and up to 14 percent during peak dry-season months. The extreme scenario pushes these demands even further, projecting a growth of 14-15 percent, with dry-season needs hitting 16 percent or more. This demand surge is fueled by industrial production, foreign direct investment, and accelerated public investment.
In response to this pressing need, the power sector is rapidly expanding its generation capacity. Recent projects, such as the Vân Phong 1 BOT Thermal Power Plant and the Ialy Hydropower Plant expansion, mark significant strides forward. However, the spotlight will shift to major projects in 2025, including the Nhơn Trạch 3 and 4 LNG power plants, which boast a combined capacity of 1,624 MW, along with the Vũng Áng II and Quảng Trạch I Thermal Power Plants. This ambitious expansion not only addresses immediate energy needs but also sets the stage for long-term sustainability.
Investment in the transmission grid is equally crucial, with an estimated $134.7 billion required between 2021 and 2030, and projections soaring to $523.1 billion for the period from 2031 to 2050, according to the National Power Development Plan VIII. The urgency for infrastructural development cannot be overstated, as the total installed power capacity in Việt Nam reached approximately 87,879.5 MW by early 2025, a 9 percent increase from the previous year. The energy mix remains heavily reliant on coal-fired power, which constitutes 33.6 percent of the total capacity, underscoring the challenges of transitioning to cleaner sources while meeting rising demand.
As peak load projections indicate a potential nationwide demand of 54.3 GW, with northern regions accounting for a significant 28.2 GW, the pressure on supply becomes evident. This scenario presents attractive opportunities for investors in power companies demonstrating strong operational performance and strategic positioning. Companies like PetroVietnam Power Corporation (PV Power) and the Refrigeration Electrical Engineering Corporation (REE) stand out due to their diverse portfolios that encompass both traditional and renewable energy projects.
However, the path forward is not without obstacles. Delays in project implementation, regulatory shifts, and fluctuating fuel prices pose risks to profitability. Moreover, the transition to cleaner energy sources, while essential, demands substantial capital investment and may encounter operational challenges. As the sector navigates these complexities, the focus on reliability and sustainability will be paramount, shaping the future of Việt Nam’s energy landscape in the years to come.
