Vietnam’s 2025 energy demand spike fuels renewable investment boom

As Vietnam braces for a significant surge in electricity demand, projected at 12%-13% by 2025, the country is simultaneously witnessing an influx of investments in the renewable energy sector.

Prime Minister Pham Minh Chinh recently highlighted the anticipated increase in electricity demand, emphasizing the government's commitment to bolstering energy development projects. This surge in energy usage is driven by rapid industrialization and urbanization, which are key components of Vietnam's economic development.

In response to this growing demand, foreign investments in Vietnam's clean energy sector have accelerated. Numerous international firms are entering the market, drawn by the country's favorable investment climate and commitment to renewable energy.

Companies from Japan and South Korea are at the forefront, partnering with local firms to phase out coal-fired power and enhance renewable energy capacities. Japan's Shizuoka Gas has acquired a stake in a solar power plant in Ninh Thuan province, while Tokyo Gas is set to commence construction of a $2 billion LNG power plant in Thai Binh.

UAE-based NMDC Group and Germany's PNE Group plan to develop large-scale wind projects. PNE Group's Hon Trau offshore wind project, with a capacity of 2,000 MW, exemplifies the scale of foreign investment flowing into Vietnam's renewable sector.

These projects are part of Vietnam's broader strategy to nearly double its power generation capacity by 2030 and significantly increase the share of renewables in its energy mix.

Moreover, the Vietnamese government is implementing policies to streamline the approval processes for renewable energy projects, making it easier for developers to bring their projects online. This includes financial incentives and regulatory support, which are essential for attracting both domestic and foreign investments in the renewable sector

Minister of Industry and Trade Nguyen Hong Dien underscored the necessity for streamlined policies that create a favorable environment for renewable energy investments. He stated, "The policy mechanism must be consistent, clear, and stable," adding, "[The] sudden changes of policies mean enterprises can't continue to mobilize capital to implement their projects."