Vietnam’s electricity sector: Key regulatory developments : Allen & Gledhill

12 August 2026

Vietnam is seeking to promote the development of new energy projects, including renewable energy (“RE”), by streamlining and enhancing its legal an regulatory framework. A key milestone is the issuance of Resolution 253/2025/QH15 (“Resolution 253”), setting out key policies for national power development for the period 2026 - 2030 to expedite the implementation of the Power Development Plan VIII (“Plan”). Please read our articles “Vietnam issues implementation plan for National Power Development Plan VIII” and “Vietnam updates National Power Development Plan VIII” for more on the Plan.

This Alert provides an overview of the key changes introduced by Resolution 253 and its implementing decrees and circulars.

Resolution 253

Resolution 253 was issued on 11 December 2025 and will be in effect from 1 March 2026 to 1 January 2031. It provides the legal basis for implementing legislation pursuant to which the Vietnam Government and relevant authorities have issued a series of decrees and circulars to strengthen the legal and regulatory framework governing the Direct Power Purchase Agreement (“DPPA”) mechanism and the development of RE projects in Vietnam.

Planning adjustment and increased flexibility

Resolution 253 permits the relevant authorities to revise the national or local power development plan in specified circumstances without having to follow the formal planning revision procedures under planning laws, while requiring certain principles to be observed when making such revisions. These circumstances include replacing or removing projects that are no longer implemented, facilitating the deployment of battery energy storage system (BESS) projects, giving effect to international agreements, and ensuring the synchronisation and efficient capacity utilisation of grid-connected projects. Given that master plan approval represents one of the most significant roadblocks to project implementation, the flexibility afforded by this policy will likely be welcomed by project investors.

Accelerating power project development

Resolution 253 sets out policies to streamline investment in the power sector and promote the development of new power projects. In particular, it permits the direct approval of investors (i.e. without requiring the prescribed auction or tender procedures) for:

offshore wind projects implemented pursuant to Resolution 253 that commence during the 2025 - 2030 period; and
other power projects as provided under Resolution 253 (including projects where the developer already holds the relevant land use rights).

Resolution 253 also reduces the administrative burden by streamlining the conditions and procedures for offshore wind surveys and development and permits private sector participation in small modular nuclear reactor power projects, which were previously restricted to state owned entities.

Electricity pricing for competitive bidding projects

Save for thermal power, small modular nuclear power, and offshore wind power projects, all power projects are subject to competitive bidding for investor selection. The successful electricity tariff bid (which must not exceed the applicable regulated electricity price ceiling for the relevant generation type) will constitute the power purchase price for the project.

Expanding eligibility and enhanced pricing flexibility under DPPA scheme

Resolution 253 introduces several changes to the DPPA mechanism aimed at increasing commercial flexibility and broadening participation. In particular, it

permits electricity prices in DPPAs (whether physical or virtual) to be freely negotiated;
expands the categories of eligible participants to include electricity retailers operating in certain special zones and areas; and
provides that the threshold for qualifying as a large electricity consumer will be determined by the Ministry of Industry and Trade from time to time.

Investment in key oil and coal power projects

Resolution 253 sets out policies to reduce administrative bureaucracy and facilitate the timely development of key national oil- and coal-fired power projects, with the objective of balancing energy security with Vietnam’s net-zero commitments.

Decree 243/2026/ND-CP amending Decree 57/2025/ND-CP on DPPA and Decree 58/2025/ND-CP on RE and new energy development

Decree 243/2026/ND-CP (“Decree 243”) was issued on 26 June 2026 and came into effect on issuance. It amends certain provisions of (i) Decree 57/2025/ND-CP regulating the DPPA mechanism between renewable energy companies and large electricity consumers (“Decree 57”) and (ii) Decree 58/2025/ND-CP regulating the development of RE and new energy (“Decree 58”) and is intended to implement the general policies in Resolution 253.

Under Decree 57, the DPPA mechanism comprises two models: (i) a physical DPPA, under which RE is supplied to the customer through the national grid pursuant to a direct contractual arrangement; and (ii) a virtual DPPA, under which the generator and customer enter into a financial settlement arrangement while electricity continues to be bought and sold through the electricity market.

Addition of new eligible participants

Decree 243 broadens the categories of participants eligible to take part in both the physical and virtual DPPA regimes. In particular:

Physical DPPA regime: Decree 243 expressly includes licensed power retailers supplying electricity within zone- and cluster-based developments (such as industrial zones, economic zones, and hi-tech parks) as participants in the physical DPPA regime. These retailers may participate either as power purchasers or power generators.
Virtual DPPA regime: Decree 243 expressly includes data centre operators and electric vehicle charging business operators as eligible customers within the virtual DPPA regime. Licensed power retailers supplying electricity within zone- and cluster-based models (such as industrial zones, economic zones, and hi-tech parks, but excluding free trade zones and urban areas) may also participate either as power purchasers or as authorised representatives of large electricity consumers.

Sale of excess power output in physical DPPA regime

Rooftop solar power generators may now sell up to 50% of the actual electricity output to the grid, compared with the previous limit of 20% under Decree 57. This change provides greater commercial flexibility for rooftop solar projects and may improve their economic viability.

Streamlined procedures for virtual DPPA regime

Decree 243 simplifies the procedures for participation in the virtual DPPA regime compared with Decree 57, reducing the administrative burden on participants and facilitating implementation.

First case of virtual DPPA implementation in practice

Of note, on 1 June 2026, TTC Duc Hue 2 Solar Power Plant, operated by TTC Duc Hue - Long An JSC, became the first power generator to participate in the virtual DPPA mechanism and conduct transactions through the electricity market. Samsung Electronics Vietnam Thai Nguyen Company Limited became the first corporate customer to purchase renewable electricity via the virtual DPPA mechanism. This is a key milestone showcasing the viability of the virtual DPPA mechanism in practice.

Overview of DPPA regimes following issuance of Decree 243

Criteria		Physical DPPA	Virtual DPPA
Power retailer added as new participants under Decree 243		Power retailer licensed to retail electricity in relevant zone and cluster models can act as purchaser or RE generator. For virtual DPPA, power retailers exclude those operating in urban areas and free trade zones.
RE generators	Type of RE technologies	Solar, wind, small hydro, biomass, geothermal, sea waves, tides, ocean currents, other renewable forms, and rooftop solar power systems	Only wind and solar
	Limitation on capacity of RE generators	No	At least 10MW
	Connect to the national electricity system	No	Yes
	Electricity generation licence (or exempted)	Yes	Yes
	Suitable with Plan / provincial master plan	Yes	Yes
	Participation in the Vietnam Wholesale Electricity Market (“VWEM”)	Not required	Yes
Large consumers	Purpose of electricity usage	All uses without re-selling	· Production / manufacturing purposes · Data centre operations · Electric vehicle charging stations and battery swapping stations
	Voltage level	Not specified	22kV or higher
	Purchase output	20,000 kWh/month (amended via Circular 29/2026/TT-BCT effective from 20 July 2026)	200,000kWh/month
PPA template provided by Decree 57		No. But key matters as set out in Decree 57 to be included	No. But key matters as set out in Decree 57 to be included
Price		Mutual agreement (amended by Decree 243)	Sums payable by consumers to Vietnam Electricity (“EVN”) Power Corporation based on specified factors such as: · the adjusted capacity of the RE generator (taking into account transmission loss); and · the DPPA service charge, VWEM clearing costs, and the retail electricity price (where the electricity consumption of the consumer / authorised electricity retailer exceeds the output of the RE generator) Consumers to pay RE generator difference where the contract for differences (CfD) strike price exceeds the full market price
Procedures		· RE generator/ investors to implement relevant procedures in relation to master plan, investment, construction, and electricity operation license · RE generator and large consumer to negotiate and execute DPPA · Large consumers or power retailer (acting as purchaser) to submit report on execution of DPPA to provincial People’s Committee, Ministry of Industry and Trade, National System and Market Operator Company	· RE generator/ investors to implement relevant procedures in relation to master plan, investment, construction, and electricity operation licence · Relevant parties to negotiate and execute VWEM Spot PPA, Electricity Retail Agreement, and Forward Contract · RE generators and large consumers to submit documents to National System and Market Operator Company · National System and Market Operator Company notify RE generators, power corporations, EVN, and large consumers on official time of operation of the DPPA mechanism

Decree 272/2026/ND-CP guiding implementation of Resolution 253

Decree 272/2026/ND-CP (“Decree 272”) was issued on 4 July 2026 and came into effect on issuance.

Offshore wind surveyor requirements

Offshore wind surveyors (being entities that conduct surveys for offshore wind project development) (“Surveyors”) must satisfy the following requirements:

Minimum equity capital: A Surveyor must have equity capital of at least VND1 billion per MW of the project’s proposed wind power capacity. The equity capital must be evidenced by the Surveyor’s audited financial statements for the two most recent financial years. Decree 272 also provides that a parent company’s guarantee (presumably guaranteeing the injection of the equity capital into the Surveyor) and other documents can also be used to evidence financial capacity.
Non-refund undertaking: A Surveyor must undertake to bear all survey costs without seeking reimbursement under any circumstances. This appears intended to preclude claims for cost recovery where the survey results indicate that the relevant sea area is unsuitable for offshore wind development.
Other requirements: Surveyors must have a clear, appropriate, and feasible survey plan, undertake to use local staff, goods and services on a competitive basis, obtain the written consent of the relevant ministries, and undertake to comply with relevant regulations.

Offshore wind developer requirements and approval process

Decree 272 prescribes different approval processes for offshore wind projects depending on when the project is expected to commence operations.

Offshore wind projects selling electricity to the national grid and operating during 2025 - 2030

Prospective developers must satisfy the following requirements:

Owner’s equity must account for at least 20% of the total project investment capital, with loan commitments from banks or credit institutions covering the balance. However, where the developer is a Vietnam company without foreign investors or shareholders, the minimum capital contribution to the project is 5%.
Where the developer is a foreign investor or foreign-invested enterprise, foreign ownership is capped at 95% with at least 5% of the charter capital or voting shares to be held by Vietnam companies that are wholly state-owned or majority-owned by state-owned companies. In addition, the developer must contribute at least 15% of the project investment capital, among other requirements.

For these projects, the Prime Minister may grant in-principle investment approval (“IIA”) concurrently with investor approval, without requiring a land use rights auction or project bidding process, provided that the project meets national defense, security, sovereignty, marine and island resources and environment, maritime, oil and gas requirements under the relevant laws.

Following the grant of the IIA, the Ministry of Agriculture and Environment (“MAE”) processes applications for, and approves, the allocation of sea areas for project surveys.

Competing applications for the same project will be processed on a first-come, first-served basis.

Offshore wind projects selling electricity to national grid and operating during 2031 - 2035

Developers of projects expected to commence operations during the 2031 - 2035 period are subject to the same eligibility requirements as set out above.

During the 2031 - 2035 period, the MAE appraises applications for the allocation of sea areas for project surveys in accordance with the relevant laws relating to marine and island resources and the environment. Following completion of the site survey, the People’s Committee of the locality in which the project’s capacity aggregation point is situated appraises the IIA application. Investor selection is then conducted in accordance with applicable laws.