Limited grid capacity is one of the major concerns for investors investing in Vietnam renewable energy market. For the past few years, there have been a significant number of solar and wind energy projects that have been forced to cut their electricity capacity due to grid constraints. To tackle this issue, Vietnam Government on the one hand, is projecting to improve its current electrical grid network. On the other hand, the Government, in a recent promulgated Law No. 03/2022/QH12 (“Law 03/2022”) permits private sector to:
- Invest in the construction of the electrical grid; and
- Operate the electrical grid which they have invested in constructing.
Prior to this amendment, the State held the monopoly over the electricity transmission activities precluding private investors from developing and operating their own electrical grid.
Even though it is now viable for private investors to build up electrical grid, these to-be-built private electrical grid systems must guarantee Vietnam national security. Having said that, there lacks clear guidance on what may constitute national security concerns.
Meanwhile, the State would retain its monopoly over the followings:
- Management of the national power grid system; and
- Construction and operation of large electricity plants of particular socio-economic importance and of significance in terms of national defense and security.
The above changes in Law 03/2022 are expected to open doors for private investors, including foreign investors to construct and operate their electrical grids in Vietnam. In addition, renewable energy investors are able to build up their own grid network to stabilize their net electrical output.
This Law 03/2022 came into effect on 01 March 2022. Detailed regulations enforcing this new Law 03/2022 are awaited.