Vietnam proposes stronger government guarantees for LNG power plants to meet energy targets

The Ministry of Industry and Trade in VN VNis currently drafting a new decree intended to adjust government-guaranteed purchase rules for LNG-fired power plants. The proposed regulatory changes would raise the guaranteed offtake volume for such facilities from at least 65 percent to at least 75 percent. Additionally, the new decree would extend the guaranteed duration of these agreements from 10 years to 15 years. This move is designed to establish a formal legal framework that promotes the investment, construction, and commissioning of plants utilizing liquefied natural gas.

The development of this regulatory framework comes at a time when VNis striving to meet specific energy infrastructure development objectives. The country has set an ambitious target to achieve 22.5 gigawatts of LNG-fired power plant capacity by 2030. However, little progress has been seen recently in achieving this LNG capacity target. Currently, VNhas only two operational LNG-fired power plants, which provide a combined capacity of 1.62 GW. The significant difference between existing capacity and the end-of-decade goal has prompted the Ministry of Industry and Trade to reconsider the terms offered to the LNG-fired power plants sector.