On November 30, 2024, the National Assembly passed the Law on Electricity, which sets out a direction for the development of renewable and new energy sources to ensure national energy security and achieve the goal of net-zero emissions. To facilitate the implementation of renewable energy projects, the Ministry of Industry and Trade is drafting a Decree detailing several provisions of the Law on Electricity regarding renewable and new energy development (referred to as the Draft Decree on Renewable Energy), which sets forth mechanisms, incentive policies, and support measures to promote the development of these energy sources.
The Draft Decree consists of 5 Chapters and 39 Articles, aiming to: Elaborate on certain articles and clauses of Law No. 61 on Electricity, which takes effect on February 1, 2025; Address existing challenges and align with Decree No. 135/2024 of the Government on mechanisms encouraging rooftop solar power systems for self-generation and self-consumption; Introduce foundational provisions on offshore wind power development to attract investment and unlock resources in the sector.
Key provisions of the Draft Decree include: Mechanisms for sharing and providing primary energy resource data and power generation statistics; Regulations on the dismantling timeline for solar and wind power plants post-decommissioning; Clarification on which projects fall under the Prime Minister’s investment approval authority; General and specific regulations on self-produced, self-consumed power, especially rooftop solar.
Given that Vietnam currently has no operational offshore wind power projects, the Draft Decree includes initial legal frameworks for: Preferential policies and support mechanisms; Project survey implementation; Management and regulation of offshore wind projects. In alignment with Resolution No. 55, the Draft provides that offshore wind projects approved for investment before January 1, 2031, will receive key incentives: Exemption from sea area use fees during the construction phase; 50% reduction in sea area use fees for 12 years after commissioning; Land use fee exemptions; A minimum power purchase agreement (PPA) of 80% capacity over a 12-year loan repayment period (for projects connected to the national grid).
The Draft also outlines investor selection criteria, requiring: Compliance with investment laws; Proven experience and financial capacity to avoid delays that affect national power supply planning. The selection of offshore wind project investors will generally follow the Law on Bidding, except for cases where the Prime Minister approves both the project and the investor. To safeguard national defense and security, foreign investors must obtain unified consent from the Ministry of National Defense, Ministry of Public Security, and Ministry of Foreign Affairs. They must also partner with State-owned enterprises, and the foreign ownership in the project entity must not exceed 65%.
After gathering feedback from ministries and stakeholders, the Ministry of Industry and Trade submitted the Draft to the Ministry of Justice for appraisal in January 2025, with plans to present it to the National Assembly for formal adoption.
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FOREIGN CAPITAL CAPPED AT 65%
The Draft Decree will have significant impacts once passed. Vietnam Law Newspaper spoke with Mr. Nguyen Hung Quang, Founding and Managing Partner of NHQuang&Associates, to get his perspective.
Reporter: What is your opinion on the investor selection conditions and the incentives for offshore wind projects outlined in the Draft Decree?
Mr. Nguyen Hung Quang: I believe these conditions are appropriate at this time. Offshore wind projects have special requirements in terms of technical capacity, maritime safety, and national security—so we need investors with proven experience.
Secondly, these projects require substantial capital investment. Therefore, selected investors must be financially capable of executing the project once a sea area is allocated. Delays in implementation can negatively affect marine resource use and maritime navigation rights.
Given that Vietnam lacks experience in offshore wind development, the requirement for foreign investors to enter joint ventures with Vietnamese enterprises creates an opportunity for technology transfer, capacity building, and risk mitigation related to national defense and security.
The 65% foreign ownership cap offers sufficient flexibility for foreign investors to manage and govern the project while ensuring the Vietnamese side retains a meaningful stake in project oversight and operation within Vietnam’s territorial waters.
This Draft Decree establishes a completely new legal framework for promoting offshore wind power—something that Vietnam previously lacked.
Reporter: If adopted, which groups will be most affected by the Draft Decree?
Mr. Nguyen Hung Quang:The Draft Decree will affect three main stakeholder groups: Businesses and investors, both domestic and foreign; Citizens, particularly those in mountainous, coastal, or island regions where renewable energy projects are deployed; The State, which will benefit from increased budget revenues, enhanced energy security, and progress toward international climate commitments.
Reporter: Thank you very much for your insights.
By Hai Ha, VOV Giao Thong, February 24, 2025.