With the rising demand for energy consumption, especially amid strong economic growth, Vietnam's commitment to transitioning from fossil fuels to renewable and new energy sources is not only essential for boosting electricity production but also crucial for achieving its net-zero emissions target by 2050, as pledged at COP26. This commitment is strongly reflected in key legislation, including the Law on Electricity No. 61/2024/QH15 (“LOE”), Decision No. 500/QD-TTg dated May 15, 2023, on the National Power Development Plan for the 2021–2030 with a vision toward 2050 (“PDP VIII”), Decision No. 893/QD-TTg dated July 26, 2023, on the National Energy Master Plan, among others.

In recent years, renewable energy projects, particularly solar and wind power, have expanded rapidly. However, due to inadequate infrastructure, this rapid growth has put significant pressure on the existing power grid. Additionally, the intermittency of renewable energy caused by weather conditions and other natural factors poses challenges for the storage of electricity generated from renewable energy. New energy sources, such as green hydrogen, green ammonia, or other new energy forms can tackle this issue by storing surplus electricity generated from renewable energy and releasing it into the grid when needed. This not only helps balance supply and demand but also mitigates the risk of grid overload and enhances the flexibility of the power system.

For that reason, in PDP VIII, the Government sets a strong development direction for offshore wind power, alongside other renewable energy sources such as solar and onshore wind power, to produce new energy for both domestic consumption and export. Renewable energy sources generating new energy for domestic consumption and export are prioritized and allowed to develop without limitation, provided they uphold national defense and energy security while delivering high economic efficiency. This strategic approach positions new energy as a key economic sector for the country.

Following this direction, on March 03, 2025, the Government issued Decree No. 58/2025/ND-CP, detailing some Articles of the LOE on renewable and new energy electricity development. Article 6.1 of this Decree stipulates that new energy electricity projects are entitled to the support and incentive policies regulated in Article 23.2 of the LOE if they satisfy the following conditions:

• The project generates electricity exclusively from 100% green hydrogen, 100% green ammonia, or a 100% mixture of both;

• The project supplies electricity to the national power grid;

• The project is the first of its kind for each type of new energy electricity.

New energy electricity projects meeting these conditions will be entitled to the following incentive mechanisms¹:

(i) Exemption from sea area usage fees during the basic construction period but not exceeding three years from the commencement of construction. 

A 50% reduction in sea area usage fees in 09 years after the exemption period of basic construction.

(ii) Exemption from land use fees and land rent during the basic construction period but not exceeding 03 years from the commencement of construction.

After the exemption period of basic construction, the exemption and reduction of land use fees and land rent will be implemented by law on investment and land.

(iii) A minimum long-term contracted electricity production of 70% during the loan principal repayment period, but not exceeding 12 years, unless otherwise agreed between the investor and the electricity purchaser.

This mechanism does not apply if the project fails to generate the committed minimum production due to project-related issues, load demand, or technical constraints of the power system.

(iv) Upon the duration specified in points (i) and (iii), the application of incentive mechanisms shall comply with the provisions of law at the time of the duration termination.

With the vast potential of this emerging sector and attractive government incentives, new energy electricity projects present a promising investment landscape, offering numerous opportunities for both domestic and foreign investors.

1. [Article 6.2 Decree No. 58/2025/ND-CP]↩

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Dentons LuatViet acknowledges and thanks Trainee Associate Giang Nguyen for her contribution to the article.