Electricity Law 2024 passed by Vietnam’s National Assembly

 The main points are:

(i) Renewable Energy Development: The New Electricity Law defines renewable energy electricity for the first time, including solar, wind, hydropower, biomass, geothermal, and waste-to-energy. The law encourages energy storage systems to be integrated with renewable energy projects, enhancing stability and efficiency in the energy sector.
(ii) Power Development Planning: All power projects must align with the National Power Development Plan (PDP). However, small-scale projects like rooftop solar and off-grid systems are exempt from some planning requirements, supporting the growth of decentralized energy solutions.
(iii) Investor Selection Framework: The law requires bidding or land-use rights auctions for investor selection when multiple investors are interested in a project. Electricity price will be the primary criterion. Exceptions apply to state-owned, urgent, and offshore wind projects.
(iv) Offshore Wind Power: The law introduces regulations for offshore wind projects, divided into nearshore (within 6 nautical miles) and offshore (beyond 6 nautical miles). The development process includes a wind survey phase followed by project implementation.
(v) Electricity Pricing and Investment Incentives: Electricity prices will be set under a market-based mechanism with government oversight. Renewable energy projects may qualify for tax reductions, land-use fee exemptions, and long-term power purchase agreements to encourage investment.

Electricity Law 2024 establishes a clearer, more transparent framework for renewable energy and offshore wind power projects, improving investment conditions and supporting Vietnam’s sustainable energy goals.

----------

For more information, please contact:

Hoang Pham (James) / Managing Partner at: hoang.pham@vselawyers.com

© 2023 VSE LAWYERS LIMITED LIABILITY LAW COMPANY – All rights reserved.

Attention: This legal update is not an advice and should not be treated as such.