Harnessing the Power of Distributed Energy Resources in Vietnam

This week, Future of Electricity Vietnam (FE-V) launches its latest brief on Vietnam’s energy transition: Harnessing the power of distributed energy resources in Vietnam.  

This latest technical brief provides concrete solutions and suggestions to Vietnamese stakeholders to reform the national energy orientation in line with the challenges and opportunities presented by energy transition. It outlines opportunities for investment, market and structural reforms to unlock distributed energy in support of Vietnam’s short-term energy security agenda.

In Vietnam, the journey toward clean energy has been more complex. Slower-than-expected deployment of new generation capacity and climate change-driven impacts on hydropower are creating a risk of regular power shortages by 2026, particularly during the dry season.  

In response, the Vietnamese government is revising its 8th National Power Development Plan (PDP8) to address these challenges. One of the most promising solutions is harnessing the potential of Distributed Energy Resources (DERs), including utility-scale solar, rooftop solar (RTS), and battery energy storage systems (BESS). These technologies offer Vietnam a faster, more sustainable path to energy security and resilience.

Vietnam is at a crossroads in its energy transition. While PDP8 initially emphasised fossil fuel expansion, the country has an opportunity to pivot toward DERs, leveraging their rapid deployment potential, strong investor appeal, and resilience benefits. With the right policies and international partnerships, Vietnam can accelerate its shift to a sustainable, secure, and competitive energy future—positioning itself as a regional leader in clean energy transformation.

The technical brief outlines the following case for DER in Vietnam:

1. Rapid Deployment and Cost-Effectiveness: Globally, solar energy has emerged as the fastest deploying and most cost-effective form of electricity generation. Since 2020, solar has consistently been the cheapest energy source, averaging 29% lower costs than the cheapest fossil fuel alternative. Vietnam’s own experience between 2017 and 2020 demonstrated that gigawatts of solar capacity can be rapidly added to the grid. Given the urgency of Vietnam’s energy needs, accelerating DER deployment could help bridge the looming supply gap.
2. Strong Investor Appetite for Clean Energy: The private sector is increasingly prioritising renewable energy investments. In 2023, 63% of total global energy investments went to clean energy. With international climate finance initiatives, such as those discussed at COP29, Vietnam has an opportunity to unlock concessional funding for DERs, reducing reliance on public finance while accelerating the transition to renewables.
3. Unlocking Foreign Investment Through Policy Enhancements: To attract more private investment, Vietnam could implement policy measures including, financial instruments and market incentives, modernising the electricity market, and safe integration of distributed energy resources.
4. Enhancing Energy Resilience: Climate change poses increasing risks to Vietnam’s energy system. By embedding resilience principles—such as flexibility, redundancy, and modularity—into planning, Vietnam can ensure long-term energy security while transitioning to renewables.

Australia-Vietnam Collaboration on DER Integration

Launched in 2022, FE-V is a science-to-policy program comprised of policy dialogues to leverage the Australian experience in the energy transition to support Vietnam in exploring practical and feasible interventions for a decarbonised, reliable and affordable power system. Vietnam and Australia have partnered through Partnerships for Infrastructure to exchange knowledge between energy sector stakeholders. In 2025, P4I will continue to collaborate with Vietnam on renewable energy technology to support its energy transition.  

Download and read the technical brief: Harnessing the power of distributed energy resources in Vietnam