Power Grid

Equinor's operations in Vietnam have been significantly impacted by the country's uncertain regulatory environment. The Norwegian company has exited the offshore wind market, closing its representative office in Hanoi. This move threatens Vietnam's ambitious green transition plans, which include increasing offshore wind capacity to 6 GW by 2030. The decision underscores how regulatory instability can derail energy projects, especially in a rapidly growing market like Vietnam, where electricity demand has more than doubled over the past decade.

The exit of Equinor is a considerable setback for Vietnam's renewable energy goals. The company cited regulatory uncertainties as the primary reason for halting its offshore wind projects. With electricity demand soaring due to economic expansion, urbanization, and industrial growth, Equinor's withdrawal could impact the country’s ability to meet its power needs. The Specialized Energy Platform reports that, under the current regulatory framework, Vietnam may only achieve 1 GW of offshore wind capacity by 2030, far short of its target.

Equinor's departure follows similar moves by other major energy firms, such as Denmark's Ørsted, which also postponed its investment plans in Vietnam due to regulatory hurdles. The political instability and delays in necessary reforms have hindered the progress of renewable energy projects. Additionally, the sensitive nature of offshore wind projects in the contested South China Sea adds another layer of complexity to their development.

Despite these challenges, Vietnam continues to make strides in diversifying its energy mix. Between 2015 and 2023, the country saw a tenfold increase in solar and wind capacity, and it is working towards adding 6 GW of offshore wind capacity by 2030 and 70 GW by 2050. While the exit of major players poses a challenge, Vietnam's focus on renewable energy and its existing progress in the sector position it well for a future transition to cleaner energy.