Vietnam Needs $18 Billion Grid Investment To Support Rapid Renewable Energy Expansion – Report

Ember has highlighted that Vietnam needs around $18 billion in investment to upgrade its power grid in order to support the country’s fast-growing renewable energy sector and meet its climate targets. The report notes that while Vietnam has made impressive progress in expanding renewable energy capacity, the development of transmission infrastructure has not kept pace with this growth.

Between 2017 and 2022, Vietnam experienced a rapid rise in renewable energy installations. Solar and wind capacity increased from almost zero to more than 20 gigawatts within just a few years. This rapid expansion placed Vietnam among the leading renewable energy adopters in Southeast Asia. However, the national grid was originally designed to handle traditional power sources and is now struggling to manage the variable output from solar and wind energy.

Because of these limitations, many renewable energy projects in Vietnam have faced curtailment. This means that electricity generated by solar and wind plants cannot always be delivered to the grid because transmission lines are already operating at full capacity. As a result, a portion of the clean energy produced by these projects goes unused.

The report stresses that strengthening the power grid is just as important as building new renewable energy plants. The proposed $18 billion investment, expected to be implemented by 2030, would focus on expanding high-voltage transmission networks and introducing smart grid technologies. These upgrades would help transport electricity from the sunny and windy southern regions of the country to major industrial centers in the north, where power demand is higher.

According to the report, failing to modernize the grid could threaten Vietnam’s energy security and slow its shift away from coal-based power generation. It also highlights the need for policy reforms to encourage private sector participation in transmission infrastructure, which has traditionally been controlled by the state.

By improving grid flexibility and investing in storage solutions, Vietnam can ensure that the renewable energy it produces is efficiently delivered to consumers. Strengthening the grid will be essential for maintaining a reliable, affordable, and sustainable energy system in the coming years.