The Politburo’s Resolution No. 70-NQ/TW sets forth a bold vision for Vietnam’s energy future — to complete institutional reforms, ensure transparent and market-driven pricing mechanisms under state oversight, eliminate cross-subsidies, foster a competitive electricity market, and ultimately grant consumers the right to choose their power suppliers.
A competitive electricity market is developed
According to Deputy General Director of the Southern Power Corporation (EVNSPC) Bui Quoc Hoan, the core element of a competitive electricity market lies in its pricing mechanism. However, Vietnam still faces a cross-subsidy situation between customer groups and across regions.
Assoc. Prof. Ngo Tri Long, former Deputy Director of the Price Market Research Institute, noted that a key innovation of the new resolution is the creation of a market-based energy pricing system which is managed by the state but determined by market principles, without cross-subsidization. He recommended a two-part pricing model with a clear roadmap to phase out cross-subsidies, ensuring that each customer group pays according to its actual costs.
Under this system, prices should distinguish between capacity charges (fixed costs) and consumption charges (variable costs), incorporating time-of-use and peak-demand pricing. He also suggested allowing greater flexibility in retail pricing, enabling suppliers and consumers to negotiate rates within the market’s regulatory framework.
Vice Chairman of the Vietnam Energy Association Nguyen Anh Tuan argued that while electricity users in urban, rural, or remote areas currently pay the same rates, a regional pricing mechanism should be studied to ensure fairness and cost accuracy. Energy expert Ha Dang Son, Director of the Center for Energy and Green Growth Research, added that Vietnam’s long-standing practice of using one customer group to subsidize another is now being phased out. Resolution 70 paves the way toward market-based electricity pricing, meaning both households and businesses will soon pay in accordance with their actual consumption and associated costs.
Consumers, in turn, are hoping for competitive pricing and improved service quality. To achieve this, experts recommend diversifying suppliers and granting Vietnam Electricity (EVN) more flexibility to adjust retail rates based on market signals. The emergence of multiple retail and distribution companies — including private and non-state entities — would allow customers to choose from a range of providers instead of relying solely on EVN, promoting competition and efficiency.
Attracting investment and expanding market participation
According to Director Pham Nguyen Hung of the Electricity and Renewable Energy Authority, the number of investors participating in Vietnam’s electricity market has increased significantly. In 2012, when the competitive generation market was first launched, there were only 31 power plants with a total capacity of 9,212 MW. By 2025, that number will have reached 118, with an installed capacity of approximately 34,080 MW — nearly a fourfold increase. Notably, private investors now account for nearly 51 percent of all participating power plants.
Despite this growth, several challenges persist. The share of generation capacity participating in the competitive market remains low, especially among renewable energy and BOT (Build-Operate-Transfer) projects. The wholesale electricity market also lacks sufficient diversity among bulk buyers, limiting its full operation.
Energy expert Ha Dang Son described Resolution 70 as a turning point for the competitive electricity market, opening space for greater private sector involvement. He emphasized that both domestic and international investors require a stable, low-risk environment with transparent procedures and enforceable contracts. The resolution addresses these needs while reinforcing national energy security through measurable targets, practical solutions, and concrete implementation mechanisms. A more flexible system will enable Vietnam to respond effectively to global market fluctuations, adjusting total power capacity as needed instead of maintaining rigid fixed quotas.
The Government also directs ministries and local authorities to restructure and promote energy-efficient industries, enforce mandatory energy-saving targets, and phase out low-efficiency, high-emission machinery and equipment. Enterprises are encouraged to invest in advanced, high-performance technologies to improve overall energy use.
Market mechanisms are refined for sustainable growth
According to Nguyen Anh Tuan, the current supply base remains too limited compared to total national capacity. Although Vietnam has established a competitive generation market, it is still incomplete and falls short of international standards. Currently, only about 38–40 percent of total generation capacity participates in price bidding. The National Electricity System and Market Operation Company (NSMO), under the Ministry of Industry and Trade, manages daily market operations and dispatches electricity based on these bids.
However, BOT projects, renewable energy plants under fixed FIT (feed-in-tariff) schemes, and smaller independent power producers are excluded from market participation due to fixed-price contracts with EVN. As long as these sources remain outside the competitive framework, market depth and liquidity will remain limited.
Vice Chairman Nguyen Anh Tuan of the Vietnam Energy Association warned that such an imbalance creates a shortage of sellers, distorting supply-demand signals and preventing electricity prices from reflecting actual costs. The association proposes that all power plants regardless of scale or ownership be required to enter the competitive market once their preferential periods end. Only with broader participation can electricity prices become more transparent, attract investment, and prevent monopolistic distortions.
Vietnam’s power market is currently in the early stage of its wholesale competition model. Delays in refining market mechanisms have led to several bottlenecks that must be addressed to transform challenges into opportunities, strengthen competitiveness, and establish a resilient foundation for the nation’s energy development.
To ensure national energy security, Vietnam aims to achieve a total power generation capacity of 183–236 GW and an annual output of 560–624 billion kWh by 2030. The country is also accelerating its green and modern energy transition, targeting renewable energy to account for 25–30 percent of total primary energy supply and reducing greenhouse gas emissions by 35 percent compared to business-as-usual projections.
Looking toward 2045, the resolution envisions a sustainable, intelligent, competitive, and modern Vietnamese energy sector — one with high self-sufficiency and reduced reliance on energy imports. Vietnam aspires to integrate deeply into regional and global energy markets and become a clean energy hub for Southeast Asia.
