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Following the issuance of the new Electricity Law dated 30 November 2024 (“New Electricity Law”), in late December 2024, the Ministry of Industry and Trade of Vietnam (MOIT) released the first drafts of several decrees of the Government and MOIT’s circulars regulating in detail certain contents of the new Electricity Law for public comments.
They include: Draft Decree of the Government on power development plan, investment and construction of power projects, including both domestically exploited natural gas and liquefied natural gas (LNG) power projects, among other types of power projects (“Draft New Decree”).
In order to provide further detailed regulations for implementing the New Electricity Law’s policy of developing gas thermal power using LNG to gradually turn gas power into an important source of electricity supply, serving as a base-load power to back-up for increasing renewable energy sources, supporting the operations of the power system and power supply security, the Draft New Decree has proposed certain new mechanisms and regulations in relation to domestic gas and LNG to power projects, including: the principle of passing through fuel prices to electricity prices, minimum long-term contract power output.
This document of our legal updates focus on gas and LNG thermal power projects, covering key regulations of the Draft New Decree, together with relevant recent new regulations of the MOIT, including new Circular No. 27 related to bidding for greenfield projects and new Circular No. 21 related to Vietnam Wholesale Electricity Market (“VWEM”) operation regulations. These regulations have a significant impact on under-development gas and LNG to power projects, including 10 projects using domestically exploited natural gas (with a total capacity of 7,900 MW) and other 13 projects using LNG (with a total capacity of around 22,524 MW) under current PDP8 by 2030, among others.
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