Vietnam’s emergence as a clean energy powerhouse is not a story of catch-up it is a deliberate pivot, forged at the intersection of industrial policy, geopolitical positioning, and climate urgency. As Southeast Asia’s energy landscape evolves in 2025, renewable energy in Vietnam is more than a sector it’s a national strategy reshaping everything from rural livelihoods to global supply chain resilience.
Vietnam’s Energy Pivot: Policy, Strategy, and Timing
At the heart of this transformation is Power Development Plan 8 (PDP8), ratified in 2023. It marks a structural shift, capping coal expansion and prioritizing renewables to reach nearly 50% of the energy mix by 2045.
For the first time, Vietnam is moving away from a state-dominated model to a more market-enabled one, with mechanisms like direct power purchase agreements (DPPAs) opening doors for private and foreign investment. The plan’s significance lies not just in its targets, but in how it resets the balance of energy governance.
The Evolution of Solar Power
Vietnam’s solar boom is entering a new chapter. While generous feed-in tariffs once drove rapid utility-scale development, today’s momentum is driven by urban demand, industrial compliance, and export pressures.
Rooftop solar in cities like Ho Chi Minh City is no longer niche; it’s a strategic asset for manufacturers aiming to meet ESG requirements from global buyers. Solar is being integrated directly into Vietnam’s export competitiveness, not just its electricity grid.
Offshore Wind: Vietnam’s Geopolitical Energy Asset
Vietnam holds one of the region’s largest offshore wind potentials, and it’s leveraging this not just for energy needs, but for geopolitical influence. In contrast to other Southeast Asian nations, Vietnam has actively engaged European and Japanese investors to co-develop offshore wind in provinces like Binh Thuan and Soc Trang.
These projects bring technology transfer, supply chain localization, and skilled job creation to coastal regions, while signaling Vietnam’s shift toward being a green industrial hub.
Transmission Bottlenecks and the Grid’s Race to Catch Up
Despite explosive growth in renewable capacity, Vietnam’s grid infrastructure is struggling to keep pace. Congestion in the south and central regions has led to energy curtailments, frustrating both investors and local authorities.
But 2025 marks a critical turn: with support from the World Bank and Asian Development Bank, smart grid upgrades and storage pilots are under way. These investments are essential to integrate renewables at scale, improve stability, and reduce economic losses from underutilized generation.
Waste-to-Energy: Fueling a Circular Economy
Often overlooked, biomass and waste-to-energy are gaining traction as part of a broader energy diversification strategy. In the Mekong Delta, agricultural residues are now powering co-firing plants, reducing pollution while adding rural income streams.
Urban centers like Hanoi are investing in waste-to-energy facilities that tackle landfill overflow while feeding the grid. These developments are modest in capacity but outsized in impact, especially for local economies and public health.
Clean Energy as Diplomacy: Vietnam’s Regional Leverage
Vietnam is using its clean energy momentum to strengthen its position within ASEAN and global climate diplomacy. Through initiatives like the Just Energy Transition Partnership (JETP), it’s securing concessional financing tied to coal phase-out and social safeguards.
Vietnam’s performance is raising the bar regionally, pushing ASEAN peers toward more ambitious energy targets while positioning itself as a leader in cross-border power trade and policy harmonization.
Homegrown Clean Tech: Boosting Innovation and Exports
Vietnam is no longer just a site for foreign energy projects, it’s becoming a producer of clean tech solutions. Startups focusing on smart energy management, AI forecasting, and low-cost storage are growing quickly, supported by government-backed incubators and international investors.
This marks a pivotal shift from energy importer to technology exporter, reflecting Vietnam’s deeper integration into the global green economy.
Solar Energy Strengthens: Viet Nam Leads Southeast Asia
Vietnam’s clean energy pivot is no longer a policy experiment, it’s a full-scale national transition. With smart planning, targeted investment, and regional collaboration, renewable energy in Vietnam is transforming how the country powers its economy, engages with the world, and builds long-term resilience. For Southeast Asia and beyond, Vietnam offers a powerful case study in climate leadership with economic dividends.
