Decree 100: New Mechanisms for Gas-fired Thermal Power Projects

Introduction

On 8 May 2025, the Vietnamese Government issued Decree No. 100/2025/ND-CP (“Decree 100“), amending Decree No. 56/2025/ND-CP dated 3 March 2025 (“Decree 56“). Decree 56 implements the provisions of the Electricity Law, including those relating to electricity development planning, power grid development, investment in electricity projects, and competitive bidding for investor selection in electricity business projects. For more information on the key features of Decree 56, please refer to our March 2025 Legal Update titled “Issuance of Decree 56 Implementing the 2024 Electricity Law: Power Development Plan and Investor Selection“.

Decree 100 amends Article 15 of Decree 56 to introduce mechanisms promoting gas-fired thermal power projects. Decree 100 came into effect immediately upon its issuance.

Key Features of Decree 100 

Revised Article Title

Decree 100 updates the title of Article 15 of Decree 56 from “Principles for Transferring Fuel Prices to Electricity Prices; Long-Term Minimum Contracted Electricity Output for Gas-Fired Thermal Power Projects” to “Mechanism for Promoting Consumption of Domestically Sourced Natural Gas; Principles for Transferring Fuel Prices to Electricity Prices and Long-Term Minimum Contracted Electricity Output for Gas-Fired Thermal Power Projects”.

This reflects the Government’s focus on advancing gas-fired and Liquefied Natural Gas (“LNG“) power development. 

Mechanism for Gas-Fired Power Projects Using Domestic Natural Gas

1. Operation and Mobilisation: Projects using domestic natural gas will operate at maximum capacity based on gas supply, meeting fuel, capacity, and output requirements while aligning with national power system needs and technical constraints.

2. Applicability: This applies to projects with state-approved completion and electricity generation using domestic gas before 1 January 2036. The mechanism continues until the project stops using domestic gas.

3. Fuel Shortages: If domestic gas supply is insufficient, the electricity seller and buyer will negotiate fuel usage and electricity pricing in the power purchase agreement per current regulations. 

Mechanism for Gas-Fired Power Projects Using Imported LNG

1. Contractual Framework: The long-term minimum contracted electricity output is agreed upon by the electricity seller and buyer, ensuring the following:
   1. • a minimum of 65% of the project’s multi-year average annual output during the principal and interest repayment period, up to 10 years from generation start;
      • post-period output or rates negotiated per applicable regulations; and
      • multi-year average output calculated per Ministry of Industry and Trade (“MOIT“) regulations on pricing and power purchase agreements.

2. Applicability: This applies to projects with state-approved completion and electricity generation using imported LNG before 1 January 2031. 

Responsibilities of Stakeholders

Decree 100 amends Decree 56 to set out the responsibilities of the following stakeholders to align with the above mechanisms for gas-fired power projects using domestic natural gas and imported LNG (“mechanisms“):

1. Electricity buyers and sellers: Negotiate power purchase agreements that are compliant with the mechanisms and relevant laws.

2. National Power System Dispatch and Electricity Market Transaction Units: Plan and manage power system operations and competitive market transactions, ensuring compliance with the mechanisms and MOIT regulations on market and dispatch operations. 

Conclusion

Decree 100 establishes targeted mechanisms to support gas-fired thermal power projects using domestic natural gas and imported LNG. By prioritising dispatch and ensuring long-term contracted output, these provisions enhance investment certainty and facilitate the efficient integration of gas-fired power into Vietnam’s energy mix.

If you have any queries on the above, please feel free to contact any of our team members.