Building a Competitive, Sustainable Electricity Market for Vietnam

Vietnam’s electricity market has reached a critical turning point. Despite major progress — from launching the Wholesale Electricity Market (VWEM) to expanding renewable capacity to nearly 54% of installed generation — the market still faces structural constraints that limit private investment and slow the energy transition.

Partnerships for Infrastructure (P4I) has completed a technical report in collaboration with Electricity Authority of Vietnam (EAV) “Enhancing electricity market competitiveness in Vietnam” which highlights both the impressive progress Vietnam has already made and the structural barriers that still limit competition and private-sector investment. Over the past decade, Vietnam has opened the door to private generation, expanded renewable capacity, introduced the wholesale market, and established an independent system and market operator. Yet challenges remain: electricity prices are still below cost recovery, the single-buyer model continues to dominate, retail competition has not started, and planning processes remain too rigid to keep up with the pace of the energy transition. Further increasing competition and private sector participation can help support integration of greater renewable energy sources into the Vietnam network.

The activity has:

• provided a current state assessment of Vietnam’s electricity market and the impacts of the energy transition;
• identified potential solutions for Vietnam’s context to progress the implementation of a competitive electricity market, drawing from the Australian experience; and
• identified pathways and strategies for Vietnam to practically implement these solutions. 

The collaboration outlines a clear and practical path forward. Vietnam will need to update its market reform roadmap, move toward market-based pricing, gradually shift away from the single-buyer structure, modernise information and communication technology systems, and increase transparency to build investor confidence. These reforms will take time, but they are essential for building a competitive, secure, and sustainable electricity market—one that can support both national energy security and Vietnam’s net-zero ambitions. It will likely take a number of years to deliver the actions required to implement competitive electricity markets. Planning and stakeholder buy-in will be key to ensure the success of ongoing reform.

According to the Deputy Director of Electricity Department of EAV Mr Vu, the collaboration has been “an opportunity to review and adjust current policies and regulations to suit reality, towards building a more transparent, fair and efficient electricity market.”¹

With clear direction, strong governance, and international collaboration — including lessons from Australia’s National Electricity Market — Vietnam can build an electricity market that is competitive, financially sustainable, and fully ready for the green energy future.

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