The Vietnam energy sector is undergoing a significant transformation to meet the demands of its rapidly growing economy and to align with global sustainability goals. This article provides an overview of Vietnam’s current energy landscape, recent developments, and future directions.
Early Developments of the Vietnam energy sector
The Vietnam energy sector has undergone significant transformation from its colonial-era origins to its current rapid expansion. Under French rule, the country’s first power plants primarily served urban centers. During the mid-20th century, the energy infrastructure developed separately in the North and South, influenced by Soviet and American technologies, respectively. Following reunification in 1975, Vietnam worked to integrate its fragmented power system, leading to the establishment of Vietnam Electricity (EVN) in 1995. Over the past two decades, the country has shifted from state-controlled energy production to market-oriented reforms, fostering private investment and accelerating the growth of renewable energy.
Read more: The Rise of Renewable Energy in Vietnam: Opportunities and Challenges
Current Energy Landscape
As of 2023, Vietnam’s power generation capacity is dominated by coal-fired plants, accounting for approximately 44% of the total capacity. Hydropower contributes around 29%, while renewable sources like solar and wind have seen substantial growth, with the two now making up about 13% of the energy mix. This shift towards renewables has been particularly notable since 2017, with solar and wind capacity expanding from nearly zero to significant levels in just a few years.

Renewable Energy Initiatives
In recent years, Vietnam has made significant strides in renewable energy, particularly in solar and wind power. The government has implemented policies to encourage the development of these clean energy sources, aiming to increase the share of renewables in the national energy mix. The new Electricity Law, effective from February 1, 2025, establishes a robust legal framework to support renewable energy development, including mechanisms for direct power purchase agreements (DPPAs) between private developers and consumers.
Read more: What ASEAN Member Countries Can Learn from Vietnam’s Renewable Energy Boom
Nuclear Energy Prospects
Vietnam is also revisiting nuclear energy as a potential component of its energy strategy. After shelving earlier nuclear projects in 2016 due to cost and safety concerns, the government has renewed discussions with international partners, including Russia, Japan, South Korea, France, and the United States, to explore the development of nuclear power plants. The goal is to enhance energy security and meet environmental commitments by incorporating nuclear energy into the power mix by 2030. So far, the government is in talks to construct two nuclear power plants.
Challenges and Future Directions
Despite these initiatives, Vietnam faces challenges in its energy transition, including the need for substantial investments, technological advancements, and the development of a skilled workforce. The government is addressing these issues through supportive policies, international cooperation, and efforts to attract foreign investment in the energy sector. The recently approved Power Development Plan VIII outlines a comprehensive strategy to balance energy security with environmental sustainability, emphasizing the development of renewable energy sources and the gradual reduction of coal dependency.
Read more: Manufacturing in Vietnam: An Unexplored Goldmine for Global Investors
Partner with Us for Seamless Expansion into the Vietnam Energy Sector
Navigating Vietnam’s evolving energy landscape requires local expertise and compliance with regulatory frameworks. Our Employer of Record (EOR) services provide comprehensive support for businesses looking to establish or expand operations in Vietnam. We handle all employment-related responsibilities, ensuring compliance with local labor laws and allowing you to focus on your core business activities.
Contact us today to learn how our EOR services can facilitate your successful entry into Vietnam’s dynamic energy sector. Check our services here or book a free consultation now.
Featured photo: USAID Vietnam, Public domain, via Wikimedia Commons