As for economic development, any country must depend on energy. In Vietnam, rural people are still reliant on biomass for cooking and heating, and hydroelectricity still accounts for most of the structure of the electricity system. However, the use of fossil fuels in the electricity sector, industry, transportation and household is growing rapidly. Although Vietnam has non-hydroelectricity renewable energy potential, these types of energy are just beginning to be used.
 

The Government of Vietnam has developed many policies to develop the energy sector. The Ministry of Industry and Trade maintains all policies related to energy, while other ministries take the lead in climate change and green growth policies.
 

The National Strategy for Green Growth 2011-2020 is sponsored by the Ministry of Planning and Investment to remove indirect subsidies on fossil fuels and encourage the production of renewable energy and efficient energy consumption. However, fossil fuel subsidies still exist for coal and gas in the electricity sector. The environmental tax of fossil fuel consumption is low. Vietnam's demand for energy is growing rapidly, and despite its large reserves of coal, gas and oil, Vietnam has become a net importer of fossil fuels. According to the Electricity Master Plan VII (adjusted), experts estimate that coal-based power will account for more than half of the electricity generated by 2030 (and half of the coal used is imported coal).
 

According to the Renewable Energy Development Strategy, by 2050, renewable sources-based electricity and large hydropower will account for more than 40% of the electricity structure. These forecasts are based on the assumption that the demand will increase, productivity enhancement is slow and there is growth in hydropower. The Ministry of Industry and Trade is currently drafting a Renewable Energy Action Plan, which implements the commitments in the Renewable Energy Development Strategy such as carbon pricing for the fossil fuel consumption and the revenue used for the Renewable Energy Fund. However, the preparation of this plan is being delayed.
 

This is partly due to low feed-in tariffs (FiT), and detailed administrative and technical regulations are still lacking, or weak. A number of government programs and subsidies facilitate the improvement of energy efficiency. Solar-based and biomass-based thermal and drying systems are being used in households and in industries. Household and industrial biogas digesters are used in cooking, heating, drying and electricity generation. In addition, biofuels are also being promoted in transportation. Some small and medium hydropower projects are underway (partly with private investment).
 

Viet Nam has a very high percentage of people with access to electricity, up to 99%. However, the supply of electricity in rural areas is often interrupted and expansion of the grid is a complex and costly process, which makes renewable power systems affordable, but is progressing slowly.
 

Half of the population is still dependent on biomass for cooking, but more and more people use biogas and electricity. 
 

Removal of subsidies for fossil fuels and the introduction of regulations on fees, or carbon taxes, could increase energy price. Studies have shown that the impact on the poor and near-poor can be minimized by applying a progressive tariff on the ladder, with the lowest prices for the first figure in the month and higher when the consumption figure increased. 
 

CPSI office