Amended Electricity Law to benefit renewable energy, energy infrastructure firms: broker

The amended Electricity Law, effective from February 1, 2025, is expected to benefit businesses involved in the development of renewable energy, energy infrastructure, and power generation.

According to leading Vietnamese broker Saigon Securities, companies like REE Corporation (REE), Ha Do Group (HDG), Bamboo Capital (BCG), PC1 Group (PC1), and Lizen (LCG) stand to gain substantially from the new law.

It said electricity is currently the main source of revenue and profit for REE Corporation, which is focusing on renewable energy, hydropower, and divesting from coal-fired power.

In the first nine months of this year, REE completed acquiring the 48 MW Duyen Hai wind farm in the Mekong Delta province of Tra Vinh for VND2.2 trillion ($86.7 million). The company is making preparations to kick off the construction in Q2/2025.

Ha Do’s energy segment accounts for 61% of its revenue, and the group owns seven wind power plants with a combined capacity of 748 MW.

These projects are all part of Vietnam's Power Development Plan VIII and are awaiting new pricing mechanisms before proceeding with investments.

In April, Ha Do received an investment certification for the Phuoc Huu wind power plant, with total investment of VND1.7 trillion ($67 million). The facility is expected to start construction in January next year and begin operations in Q4/2025.

BCG Energy (BCE), a subsidiary of Bamboo Capital, has eight wind power projects with a total capacity of 925 MW, which are priority projects until 2030 under the PDP VIII.

The company also completed acquiring the Tam Sinh Nghia waste-to-energy plant in Ho Chi Minh City in 2023. BCG Energy aims to achieve a total renewable energy capacity of 2 GW by 2026, diversifying its renewable energy portfolio.

PC1 Group generates revenue from multiple sectors, including hydropower, industrial manufacturing, mining, real estate (industrial parks and residential areas), and construction. Construction alone accounts for about one-third of the group's annual revenue.

SSI Research said it expected the amended Electricity Law to open a new growth phase for electricity infrastructure investment, leading to more new contracts in electricity facility construction and steel pole supply.

Lizen has historically focused on transportation infrastructure, but its growing involvement in renewable energy projects is set to become a key growth driver.

The company has invested in two solar farms: Chu Ngoc in the Central Highlands province of Gia Lai and Nhon Hai in the central province of Ninh Thuan. It is also awaiting approval for two wind power projects in Gia Lai and the northern province of Lang Son.

Electricity giant PV Power (POW) is investing in the Nhon Trach 3 & 4 LNG power projects. The company expects Nhon Trach 3 to begin commercial operations in June and Nhon Trach 4 in September.

Although the project is expected to impact PV Power’s profits in 2025-2026, SSI Research believes that long-term LNG electricity production commitments will improve the project's operational efficiency and help increase POW’s long-term profitability.

A key aspect of the amended Electricity Law is reforms of electricity pricing, which could help state utility Vietnam Electricity (EVN) reduce its losses in the future and provide indirect benefits to all power plants.

In early November, EVN proposed the Ministry of Industry and Trade pilot a two-tier electricity pricing mechanism for some customer groups before it is expanded nationwide starting January 1, 2025.

The model would combine the cost of capacity registered for use and actual energy consumption. At present, charges are levied only on the basis of electricity consumed.

The new mechanism will more accurately reflect the costs consumers impose on the electricity system and prompt more efficient use, it added.

The Electricity Law 2024, adopted on November 30, focuses on accelerating the development of renewable energy sources, such as wind, solar, hydrogen, and ammonia, which are central to Vietnam's goal of achieving net-zero emissions by 2050.

Notably, the law simplifies procedures for urgent energy projects, such as streamlining investment approvals and the process for land use conversions which will speed up the construction of vital infrastructure.

Additionally, it incentivizes private investment in energy storage systems and encourages the gradual shift from fossil fuel-based power plants to low-emission alternatives.

Under the law, the state retains its monopoly over the dispatch of the national electricity system and operating the transmission grid, except for those built by non-state entities.

Compared to previous regulations, the new law clarifies procedures for master planning, investment approval, and investor selection.

It prioritizes the development of gas-fired power plants using domestic gas resources and liquefied natural gas (LNG) to gradually establish it as key energy sources, supporting the regulation of the electricity system.

The new law also outlines a high-level development policy for nuclear energy, and an amendment to the 2008 Law on Nuclear Power is expected soon to strengthen the legal framework for this sector.