Energy in Vietnam

While historically hydroelectric has been the dominate source of energy generation, coal has been the key power generation source since 2018. Coal accounted for about 30% of installed capacity and 47% of electricity generation in 2021. The high use of coal makes Vietnam an increasingly important emitter of carbon dioxide, contributing to climate change. Current energy policy predicts an increase in Natural gas in Vietnam to substitute for coal, but significant delays in deployment of gas infrastructure and disruptions like the 2026 war in Iran have slowed growth of the technology.

The energy infrastructure of Vietnam is highly centralized with centralized state planning, and national industries such as the state owned Petrovietnam controlling fossil fuel infrastructure. Current energy policy is dictated by the Power Development Plan 8, which had a revised version of the policy adopted in 2025.

Total primary energy supply (domestic, import) by type

Table 1: Progress of primary energy supply between 2000‑2015 in kilotonnes of oil equivalent (KTOE)

Coal

Vietnam had the fastest growth in coal use in Southeast Asia during 2011-2021, at an annual growth rate of 11%.

According to data of the Ministry of Industry and Trade (MOIT), 10 months of 2018 coal production was estimated at 34.35 million tons, up 10% over the same period in 2017, of which clean coal output of Vinacomin (TKV) was 29.6 million tons, up 10.9% over the same period last year. By the end of 2018, TKV's coal production reached 36.95 million tons. In 2019, TKV aimed to produce 40 million tons while consumption was up to 42 million tons, exceeding 2 million tons compared to production.

On 2019-04-09, the amount of raw coal produced by this group reached over 10.7 million tons (of which 10.5 million tons were exported). To meet the above figure, TKV had to import another 1.2 million tons of coal to mix, while reducing its inventory to 6.2 million tons of coal.

Table 2: Vietnam's coal import volume from 2014 to 2017 (tons)

The total volume of coal imported into Vietnam from 2014 to 2017 reached nearly 38 million tons and has an increasing trend. In terms of markets, Australia, Indonesia and China are the three largest coal supply markets for Vietnam. According to the statistics of the General Department of Vietnam Customs, in 2020, Vietnam imported 54,8 million tons of coal, worth US$3,7 billion.

Table 3: Vietnam's coal balance in 2017 (million tons)

It is forecasted that in the future, domestic coal resources will not meet the demand for consumption in general, electricity production in particular and must be imported in huge quantities ... (2020: 86 million tons, 2025: 121 million tons and 2030: 156 million tons). Mr. Sabyasachi Mishra, mineral sales manager at Tata International, predicts that Vietnam's annual coal imports will increase from 20 million tons to 30 million tons in the next one or several years, especially when domestic coal reserves are downward trend.

Vietnam has joined the Global Coal to Clean Power Transition Statement at COP26 in 2021. However, similar to other developing countries such as Indonesia, it faces significant challenges to realise the pledge.

Oil

Oil was discovered in Vietnam in the mid-1980s and oil production began in the 1990s.

According to the report of Petrovietnam (PVN), the total production of oil exploitation in 2017 reached 25.41 million tons, exceeding 1.60 million tons of oil equivalent compared to the Government plan assigned at the beginning of the year, but exploration increased reserves to only 4 million tons. In particular, oil exploitation reached 15.52 million tons, exceeding 1.32 million tons.

In 2018, the oil production reached nearly 14 million tons (of which, the domestic oil production was about 11.3 million tons), down from the level of over 15.52 million tons in 2017.

According to government statistics, in the period 2012–2017, crude oil exports were always more than imports, with an average export volume of 8.3 million tons/year, while imports averaged only about 750 thousand tons/year.

In 2018, the whole country exported 3.96 million tons of crude oil, down 41.8% from 2017 and less than half of the annual exports of crude oil in the period of 2012–2017. At the same time, imports reached 5.17 million tons, more than 4 times the figure of 1.18 million tons in 2017, and 7 times more than the annual import figure for the period 2012–2017.

In January and February 2019 the whole country imported more than 1.462 million tons of crude oil (worth US$635.4 million), an increase of more than 16 times in volume and 14 times in value from the same period in 2018. The reason for the sharp increase is the oil demand for production by the Nghi Sơn Refinery.

Oil production in many wells is declining naturally, due to exploitation for too long. In addition, the increase in reserves is so low that from 2018 to 2025, oil production will decrease steadily every year by 10% – equivalent to more than 2 million tons. Lack of capital is the main reason that PVN has not been able to boost oil and gas exploration activities in the past years to increase reserves. The increased output to compensate for the exploitation has reduced to a worrying level, affecting the sustainable development of Vietnam's oil and gas industry. Only a few years from 2018, the total oil and gas production will be only 1/3 of the current production.

Natural gas

Natural gas in Vietnam is a major feature of energy infrastructure and policy in Vietnam. Though Vietnam has limited domestic production of gas, Vietnam has not historically been a heavy user of natural gas, with limited reserves used for domestic applications such as heating, cooking and power. However, natural gas has been increasingly included in policy and energy mix alongside renewables as part of the phase out of coal. According to a 2023 estimate by the IEA, less than 6.3% of the total energy mix in Vietnam was provided by natural gas. Since 2020, this has been a 479% increase in total usage by volume.

The increase in usage of natural gas has primarily been as part of a policy of using liquefied natural gas to substitute for coal, with the goal of reducing overall emissions of the energy sector. However, despite a goal to reduce coal imports, they have continued to increase coal imports while natural gas use expands resulting in increased overall carbon emissions and fossil fuel use, preventing implementation of policy goals of reducing emissions. Changes in the energy mix and policy are dictated in Vietnam by the national, revised as the 2025 Power Development Plan 8 (2025 PDP8) and the 2024 Electricity Law both which favor renewables, but also include an increase from 0.8 GW to 22.5 GW of imported LNG capacity by 2030.

Energy analysts evaluating the enthusiasm for LNG in policy note that there has not been support for long-term financially viable natural gas markets; it could be more cost effective to install the capacity with renewables, like solar, wind and batteries. Additionally climate policy tracking organizations, have described the policy framework as insufficient for the Nationally Determined Contribution, and increasing the risks of stranded asset and locking in fossil fuel infrastructure for more than 30 years.

In the short term, the implementation of the revised plan implies a significant expansion of natural gas infrastructure, including gas power plants, LNG terminals and gas pipelines. However, as of late 2025, delays in building infrastructure, and global shortages of gas turbines had led to significant delays in installed capacity for generating energy from the gas, likely leading to further delays in meeting 2030 LNG-fired gas plant activation goals. Shortages caused by the closure of the Strait of Hormuz during the 2026 War in Iran will likely further increase the cost of LNG import in Vietnam.

Renewables

Vietnam utilizes four main sources of renewable energy: hydroelectricity, wind power, solar power and biomass. At the end of 2018, hydropower was the largest source of renewable energy, contributing about 40% to the total national electricity capacity. In 2020, wind and solar had a combined share of 10% of the country's electrical generation, already meeting the government's 2030 goal, suggesting future displacement of growth of coal capacity. By the end of 2020, the total installed capacity of solar and wind power had reached over 17 GW. Over 25% of total power capacity is from variable renewable energy sources (wind, solar). The commercial biomass electricity generation is currently slow and limited to valorizing bagasse only, but the stream of forest products, agricultural and municipal waste is increasing. The government is studying a renewable portfolio standard that could promote this energy source.

While wind and solar investment remains attractive in Vietnam, existing capacity is under-utilized due to lack of electric transmission capacity and lack of a replacement for the expired feed-in tariff.

The lead-up to the expiration of the initial solar feed-in tariff (FIT) of US$93.5/MWh saw a large increase in Vietnam's installed capacity of solar photovoltaic (PV), from 86 MW in 2018 to about 4.5 GW by the end of June 2019. The number reached about 16.5 GW as of the end of 2020. This represents an annualized installation rate of about 90 W per capita per annum, placing Vietnam among world leaders. As of 2019, Vietnam has the highest installed capacity in Southeast Asia. In 2020, there are 102 solar power plants operating in the country with a total capacity of 6.3 GW. As of 2021, Vietnam has become one of the most successful ASEAN countries in attracting investment in renewable energy and promoting various types of renewables within the country.

Vietnam has the largest offshore wind power potential amount ASEAN countries, with over 470 GW technical potential within 200 km of the coast. This is equivalent to about 6 times the country's total installed capacity of any energy source as of 2022. This offers opportunities for meeting domestic demand as well as exporting to other countries such as Singapore.

Vietnam has the ASEAN largest offshore wind power potential, with over 470 GW technical potential in 200 km of the coast, about 6 times of the country's installed capacity of 2022. This offers huge opportunities for meeting domestic demand as well as exporting other countries such as Singapore.

Hydro-power

According to theoretical calculations, the total hydro-power capacity of the country is about 35,000 MW, of which 60% is concentrated in the North, 27% is distributed in the Central and 13% in the South. Technical potential (potentially feasible to exploit) is about 26,000 MW, equivalent to nearly 970 planned projects, can annually produce more than 100 billion kWh, of which small hydroelectricity comes in particular 800 projects, with a total power of about 15–20 billion kWh/year.

In 2017, reports said that large hydro-power power plants with capacity of over 100 MW were almost fully exploited. Plants with favorable locations and low investment costs have also been constructed. Remaining in the near future, small capacity hydro-power projects will be invested for exploitation.

According to the assessment, Vietnam's small hydro-power potential is about 4,000 MW, of which the source with a capacity of 100 kW-30 MW accounts for 93–95%, while the type of source with a capacity of under 100 kW only accounts for 5 – 7%, with total capacity over 200 MW.

As of 2018, there were 818 hydro-power project power plants in the whole country with total installed capacity of 23,182 MW. In which, 385 plants with the total installed capacity of 18,564 MW have been put into operation, 143 projects were being constructed with a total installed capacity of 1,848 MW and 290 investment projects with a total installed capacity of 2,770 MW. There are many dams and hydro-power stations in Vietnam.