Renewables
Vietnam urged to pivot from LNG to renewables for energy security
A new report from the Institute for Energy Economics and Financial Analysis advises Vietnam to prioritize domestic renewables over liquefied natural gas expansion.
Key points
- Vietnam's revised Power Development Plan VIII targets 22.5 gigawatts of LNG capacity by 2030.
- IEEFA reports that utility-scale solar and wind offer cheaper and faster alternatives to imported gas.
- Global supply chain disruptions and geopolitical events expose Vietnam's heavy reliance on imported fuels.
What happened
According to a report published by the Institute for Energy Economics and Financial Analysis (IEEFA), Vietnam faces rising energy security risks due to its heavy reliance on imported fuels. The country's revised Power Development Plan VIII (PDP8) aims to deploy 22.5 gigawatts of liquefied natural gas-fired capacity by 2030. However, IEEFA warns that this strategy could increase the national energy import bill by 66 to 106 percent.
Recent geopolitical tensions, including the 2026 Middle East conflict that disrupted shipping via the Strait of Hormuz, highlight the vulnerability of globally traded fuel supplies. Vietnam imports a significant share of its crude oil and propane from the Middle East, leaving its economy exposed to international price volatility.
Why it matters
Economic conditions for gas-fired power have worsened significantly. Higher construction expenses, extended equipment lead times, and fluctuating global LNG prices have pushed capital costs for combined-cycle gas turbine plants 60 to 100 percent above Vietnam's 2025 electricity tariff ceiling.
In contrast, domestic renewable energy provides a more economical path. IEEFA notes that utility-scale solar generation costs sit 51 to 60 percent below the LNG tariff ceiling, while onshore wind is 58 to 69 percent cheaper. With electricity consumption per person reaching 2,755.9 kWh in 2024, according to World Bank figures, securing affordable and reliable power remains vital for the country's manufacturing sector.
What comes next
To strengthen resilience, IEEFA recommends that policymakers reassess the 22.5 gigawatt LNG target and shift near-term investments toward domestic solar and wind. Achieving this transition will require updated feed-in tariffs, competitive auctions, direct power purchase agreements, and targeted upgrades to transmission infrastructure.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Renewables are the fastest-growing part of the world’s energy system. The COP28 goal is to triple capacity by 2030, and solar mini-grids are the fastest route to power for millions of people without electricity.
41.2% of electricity in Vietnam was renewable in 2021Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
