Vietnam’s energy system is being reshaped by one of Asia’s fastest industrial expansions. Electronics factories, steel plants, ports, cities and a growing middle class all need more electricity, while the government must prevent the power shortages that have previously disrupted production. Coal still provides the largest part of Vietnam’s electricity, but hydropower, solar, wind, natural gas and imported electricity are all important parts of the system.
By the end of 2025, Vietnam had about 87.6 gigawatts of installed power capacity, making its electricity system the second largest in Southeast Asia. Coal, hydropower and non-hydro renewable energy each represented more than one-quarter of this capacity. However, installed capacity does not show the full picture. Coal plants usually operate for more hours than solar and wind farms, so coal remains much more important in actual electricity generation.
Vietnam’s central energy challenge is therefore not simply to build more power plants. It must connect new generation to the grid, deliver electricity between distant regions and keep prices manageable for factories and households. At the same time, the country is trying to reduce emissions, improve energy security and prepare to introduce nuclear power.
Manufacturing Growth Keeps Vietnam’s Electricity Demand Rising
Vietnam has become an important production base for electronics, clothing, furniture, machinery, chemicals and other export industries. Industrial parks around Hanoi, Hai Phong, Ho Chi Minh City, Dong Nai and Binh Duong require large and reliable electricity supplies. New data centers, urban rail systems, electric vehicles and air conditioning are adding further demand.
The country’s electricity system must expand quickly enough to support this industrial strategy. By 2030, the government expects electricity production and imports to reach between approximately 560 and 625 billion kilowatt-hours. That would be far above the estimated 323 billion kilowatt-hours produced and imported in 2025.
Vietnam’s long and narrow geography makes this expansion difficult. Major demand centers are located in the north and south, while many hydropower, wind and solar resources are found in mountainous or central regions. Fuel must also move through ports, pipelines and rail networks before it reaches power stations.
Weather adds another layer of uncertainty. Hot periods increase cooling demand, while drought can reduce hydropower production. Typhoons and floods can damage transmission lines, substations, roads and local distribution systems. Vietnam therefore needs extra generating capacity, stronger networks and more flexible sources of power.
Coal Remains the Foundation of Vietnam’s Power Supply
Coal is still the largest single source of electricity in Vietnam. During the first ten months of 2025, coal-fired plants produced about 46% of the country’s electricity. By comparison, hydropower supplied around 33%, non-hydro renewables about 12%, natural gas approximately 6%, and imported electricity nearly 3%.
Many coal plants were built to provide continuous power for industrial growth. Important coal-generation areas include Quang Ninh in the northeast, the Red River Delta, the north-central coast and parts of southern Vietnam. Coal is also used by the cement, steel, chemical and building-material industries.
Vietnam has a domestic coal industry centered mainly in Quang Ninh, but local mines cannot supply all national demand. Some domestic coal also has characteristics that do not match the technical needs of newer power stations. As a result, Vietnam has become a major coal importer, buying large volumes from countries such as Indonesia and Australia. Total coal imports reached a record level in 2025.
This dependence creates a difficult policy problem. Coal provides reliable power and supports industrial production, but it also increases carbon emissions, air pollution and exposure to international fuel prices. The revised Power Development Plan still allows coal capacity to reach approximately 31 gigawatts by 2030, slightly above the level operating at the end of 2025. This means coal generation may remain high even as its percentage of the total power system gradually falls.
Vietnam has committed to ending coal use in electricity generation after 2050. Reaching that goal will require more than closing old plants. The country will need enough renewable generation, nuclear power, storage, natural gas and transmission capacity to replace coal without creating shortages.
Hydropower Connects Electricity, Rivers and Agriculture
Hydropower is the second major foundation of Vietnam’s electricity system. The country had approximately 24.6 gigawatts of hydropower capacity at the end of 2025. Major facilities include Hoa Binh, Son La and Lai Chau in the north, along with plants on river systems in the Central Highlands and southern regions.
Hydropower provides several advantages. It can generate large amounts of relatively low-cost electricity, respond quickly when demand rises and help balance variable solar and wind production. Reservoirs may also support flood control, irrigation and water supply.
These different roles can compete with one another. Water stored for electricity may also be needed for farms, cities or flood management. EVN regularly coordinates reservoir releases to supply water for rice cultivation and irrigation in the Red River Delta. During dry years, lower reservoir levels can reduce electricity generation at the same time that hot weather raises demand.
Climate change may make these conditions harder to manage. More extreme rainfall can increase flood risk, while longer dry periods can weaken hydropower output. Future investment is therefore moving toward plant expansions, improved water management and pumped-storage hydropower. Pumped storage can use electricity during low-demand periods to move water uphill, then release it to produce power when the grid needs additional supply.
Natural Gas Is Moving From Domestic Fields to Imported LNG
Natural gas has long supplied electricity and industry in southern Vietnam. Offshore fields have delivered gas through pipelines to power and fertilizer complexes in areas such as Ba Ria–Vung Tau, Dong Nai and Ca Mau. Gas-fired generation is useful because plants can adjust their output more easily than traditional coal stations.
Production from several mature domestic gas fields is declining, however. Vietnam is responding through two parallel strategies: developing new offshore resources and building an imported liquefied natural gas industry.
The Block B–O Mon project is central to the domestic strategy. It links offshore gas production in the southwest with a pipeline and a group of power stations near Can Tho in the Mekong Delta. The project is intended to provide a long-term domestic fuel source, with its first gas currently targeted for 2027. Its progress matters because delays would increase pressure to import more LNG or burn additional coal.
Vietnam received its first LNG cargo at the Thi Vai terminal in 2023. The terminal supplies the Nhon Trach 3 and 4 power plants, which entered commercial operation in late 2025. PetroVietnam Gas has also signed Vietnam’s first multi-year LNG supply contract, covering deliveries from 2027 through 2031.
The revised national plan targets about 22.5 gigawatts of LNG-fired capacity and nearly 15 gigawatts of domestic gas power by 2030. Reaching those numbers will be difficult. LNG power projects require terminals, storage tanks, pipelines, power-purchase agreements and long-term fuel contracts. Imported LNG can also be expensive, especially when Asian and European buyers compete for cargoes.
Natural gas may help Vietnam reduce its dependence on coal, but it creates another form of import exposure. The success of this strategy will depend on whether gas projects can receive financing and sell electricity at prices that cover their fuel costs.
Offshore Oil Still Matters, but Vietnam Now Imports More Crude
Vietnam developed an important offshore oil industry during the late twentieth century. Fields such as Bach Ho helped create PetroVietnam, support government revenue and establish a national network of drilling, shipping, engineering and refinery businesses.
Many of these older fields are now mature. New discoveries and additional drilling can slow the decline, but they may not return domestic production to its earlier peak. Offshore development is also becoming more technically difficult as exploration moves toward deeper water and more complex geology.
Vietnam operates two main refineries. Dung Quat in Quang Ngai Province can process about 148,000 barrels of crude oil per day, while Nghi Son in Thanh Hoa Province has a capacity of approximately 200,000 barrels per day. Nghi Son normally supplies around 35% of domestic fuel demand and mainly processes imported crude.
Together, the two refineries cover much of Vietnam’s demand for gasoline, diesel, jet fuel, liquefied petroleum gas and other products, but imports are still necessary. This leaves the country exposed to shipping disruption, refinery shutdowns, exchange-rate movements and global oil prices.
Transport is the largest everyday connection between oil and Vietnamese life. Motorcycles remain a major form of personal transport, while diesel supports trucks, buses, fishing vessels and construction equipment. Aviation and port activity add further demand.
On June 1, 2026, Vietnam introduced E10 gasoline nationwide. E10 contains up to 10% ethanol and is intended to reduce fossil-fuel use, support domestic agriculture and improve fuel security. The change will not end Vietnam’s oil dependence, but it shows how transport policy is becoming part of the wider energy transition.
Vietnam’s Renewable Boom Has Outrun Parts of the Grid
Vietnam experienced one of Southeast Asia’s fastest expansions of solar and wind power. Feed-in tariffs encouraged developers to build projects quickly, especially in sunny and windy central and southern provinces. Ninh Thuan and Binh Thuan became major renewable-energy centers, while rooftop solar spread across factories, commercial buildings and homes.
By the end of 2025, wind, solar and biomass provided approximately 24.5 gigawatts of installed capacity, or almost 28% of Vietnam’s total. Their share of actual generation was lower because solar panels produce only during daylight and wind output changes with weather conditions.
The speed of construction created serious grid problems. In several provinces, renewable projects were completed faster than transmission lines and substations. Grid operators sometimes had to limit output because local networks could not carry all available electricity to demand centers. This reduced project revenue and showed that adding generation without matching infrastructure can waste part of the investment.
Pricing has become another problem. Reviews of eligibility for older feed-in tariffs and reductions in payments to some projects have created disputes between EVN and investors. A stable renewable market will require clearer rules, reliable power-purchase agreements and confidence that approved pricing systems will be applied consistently.
Even with these difficulties, the revised power plan sets very large targets. By 2030, Vietnam aims for roughly 46 to 73 gigawatts of solar power and 26 to 38 gigawatts of onshore wind. Battery storage is expected to grow alongside them.
Offshore wind could become a major long-term industry. Vietnam has a long coastline, relatively shallow waters in several regions and strong wind resources near major population centers. The national plan targets between 6 and 17 gigawatts of offshore wind by 2030–2035, with much larger development possible by 2050.
Offshore wind could supply domestic factories, produce green hydrogen or support electricity exports to countries such as Singapore. However, commercial projects still need a clear system for marine surveys, site awards, pricing, grid connections and environmental approval.
The North–South Grid Is Vietnam’s Most Important Energy Project
Vietnam’s power system is tied together by a 500-kilovolt transmission network running along much of the country. This backbone allows electricity to move between the north, central coast and south, but regional differences continue to create pressure.
Northern Vietnam has heavy industrial demand, high summer loads and less solar capacity than the central and southern regions. Southern Vietnam contains major manufacturing zones, gas plants and growing urban demand. Central provinces have strong renewable resources but smaller local electricity markets.
This mismatch makes long-distance transmission essential. During the first ten months of 2025, EVN and its subsidiaries energized 172 grid projects between 110 and 500 kilovolts. These included the Lao Cai–Vinh Yen 500-kilovolt line and projects intended to strengthen supply in the north.
Grid development must now serve several goals at the same time. It must connect renewable projects, deliver power to new industrial parks, support nuclear and LNG plants, increase resilience against storms, and provide electricity to remote or island communities. The connection of Con Dao to the national grid illustrates how submarine cables and modern networks can reduce dependence on isolated diesel generation.
Regional electricity trade is also becoming more important. Vietnam already imports power from Laos and China and trades electricity with Cambodia. By 2030, the government aims to have the ability to import around 9.4 to 12.1 gigawatts from Laos. Hydropower imports can help Vietnam meet demand, but they also require cross-border lines and agreements on price, seasonal supply and water conditions.
Nuclear Power Has Returned to Vietnam’s Energy Strategy
Vietnam does not yet operate a commercial nuclear power plant. The country approved plans for nuclear development in 2009 but suspended the program in 2016 because of financing, safety and demand concerns.
That position has changed. The National Assembly approved the restart of the Ninh Thuan nuclear program in November 2024. The revised power plan now expects the Ninh Thuan 1 and Ninh Thuan 2 plants to enter operation during the 2030–2035 period, although the construction schedule remains extremely demanding.
In March 2026, Vietnam and Russia signed an intergovernmental agreement that created the legal framework for Ninh Thuan 1. The proposed station would use two Russian VVER-1200 reactors with a combined capacity of 2.4 gigawatts. EVN is responsible for Ninh Thuan 1, while Petrovietnam has been assigned responsibility for Ninh Thuan 2.
Nuclear power offers several attractions for Vietnam. Reactors can produce large amounts of electricity without the direct carbon emissions of coal or gas plants. They can operate day and night and provide stable power for industrial demand. A nuclear program could also support technical education, engineering services and a more advanced domestic supply chain.
The challenges are equally large. Vietnam must train operators, strengthen the independent regulator, arrange financing, manage radioactive waste, prepare emergency systems and complete major transmission infrastructure. It must also work with communities affected by land acquisition and resettlement.
Nuclear power will therefore not solve Vietnam’s immediate supply problems. Even under the official schedule, coal, gas, hydropower and renewable projects must carry most of the system through the rest of the 2020s. Nuclear becomes more important in the 2030s, when it may help replace older coal plants and provide low-carbon electricity alongside wind and solar.
Energy Policy Must Turn Ambition Into Completed Projects
Vietnam’s revised Power Development Plan VIII is one of the most ambitious electricity programs in Southeast Asia. It aims to increase total installed capacity to between approximately 183 and 236 gigawatts by 2030. The government estimates that power generation and grid development will require around $136 billion of investment by that date.
The plan combines coal, domestic gas, LNG, hydropower, solar, wind, storage, imported electricity and nuclear power. This diversity reduces reliance on any single source, but it also creates a major delivery challenge. Every project type has its own permits, contracts, fuel needs, grid connections and financing risks.
The structure of the power industry is also changing. EVN remains the central utility and controls much of the transmission and retail system, but independent and non-EVN producers generated the majority of Vietnam’s electricity in 2025. The country is gradually developing more competitive wholesale and retail arrangements, although electricity prices still include cross-subsidies and government controls.
Foreign investors will be essential because domestic public finance cannot fund the entire expansion. Vietnam’s Just Energy Transition Partnership was announced with an international financing goal of $15.5 billion, but the transition will need much more private capital. Investors are looking for clearer procurement rules, bankable power contracts, predictable pricing and faster approval processes.
Vietnam’s policy goal is not an immediate end to fossil fuels. The near-term strategy is to build enough power for economic growth while preparing cleaner technologies for a larger role. Coal may remain strong through 2030. LNG and domestic gas are expected to grow. Solar and wind will expand further, while nuclear power is prepared for the following decade.
Vietnam’s Energy Future Depends on Delivery, Not Targets
Vietnam has the resources to build a broader energy system. It has coal infrastructure, offshore oil and gas knowledge, major rivers, strong solar conditions, a long windy coastline and growing technical capacity. It also has access to electricity imports and international investment.
The harder problem is coordination. Power plants must be matched with transmission lines. LNG stations need terminals and contracts. Renewable projects need storage and stable pricing. Nuclear plants require skilled workers, regulation and public confidence. Hydropower must balance electricity generation with agriculture and flood control.
Vietnam’s industrial economy cannot wait for one perfect energy source. Through the 2020s, the country will continue using coal while expanding gas, renewables, storage and cross-border connections. During the 2030s, nuclear power and offshore wind could change the balance more significantly.
The success of Vietnam’s energy strategy will be measured not by the size of its official targets, but by whether new infrastructure reaches operation on time. Reliable electricity will remain essential to the country’s manufacturing growth, export economy and rising standard of living.
