Vietnam – German Forum
Bioenergy in Vietnam
Biomass and biogas markets in Vietnam:
Status and Prospects
Hochiminh City, 16 September 2013
By: Nguyen Duc Cuong
Vietnam Institute of Energy
Contents
1
2
3
4
• Current status and prospects for biomass energy and biogas
development in Vietnam
• Market conditions and business opportunities for heat and
power from biomass and biogas
 NỘI DUNG TRÌNH BÀY
• Investment into biomass and biogas: issues to be dealt with
• Summary and Conclusion
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.1. Current Status
1.1.1. Vietnam Electricity system (up to 31st December 2012)

Total capacity: 26.47 GW

Total electricity volume produced: 120.2 TWh
 Renewable electricity: 4.5 TW (3.7%)
 4 types of renewable energy contributing to the electricity grid: Small hydropower,
biomass, solid waste and wind

Electrification in Vietnam: approximately 97%
140
Điện tái tạo (gồm TĐN)
120
Nhập khẩu
100
Nhiệt điện khí
80
60
40
Diezel
Tua bin khí chạy dầu
Tua bin khí+Đuôi hơi
Nhiệt điện dầu
20
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Nhiệt điện than
Thủy điện lớn
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.1. Current status (cont.)
1.1.2. Number of installed systems
Bagasse

40 CHP-cogeneration systems applying direct burning technology are in operation
 Total capacity: 150MWe
 Scale of the installed capacity: ranging from 1 to 25MWe
 Main purpose: production of heat and power for sugar production

5 plants are selling surplus electricity to national grid at the average price of 4UScents/kWh.
Husks

Currently there is only one thermo power plant applying fluidized bed combusion technology.
 Currently this plant has not produced electricity; it sells steam for neighbouring households
at 25 – 30USD/ton (saturated steam, 7 bar).
 Plant expansion is planned with the installment of turbine and power generator for selling
electricity to grid.
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.1. Current Status (cont.)
Wood processing residues

More than 30 wood processing plants have installed industrial boilers feeding
with wooden residues (low steam parameters)

Steam is used to dry wood at the plants
Biogas

Household scale:
 More than 200,000 systems have been installed
and operated
 Digester volume ranges from 5-20 m3
 Biogas ultility:
 Cooking, lighting and electricity production for
household use

Industrial scale:
 To produce electricity: 2MW (4 small plants x 0.5MW)
 To produce heat: from 5-12 ton of steam/hr.
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.1. Current status (cont.)
1.1.3. Applied technologies
 Biogas: Household scale (small scale)
 Anaerobic digestion
Materials: Bricks, nilong bags;
Composite
 Pig farm scale (medium scale)
 Connected by blocks
 Large scale: two main groups
 Pond and plug flow
 ACR; AF; DSFF; UASB; and FB.
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.1. Current Status (cont.)
 Small scale:
 Wood processing
 Boiler: direct buring, fixed grades, low steam parameters
 Medium and large scale:
 Sugar industry: cogeneration of heat and power
 Boiler: direct buring (fuel moisture: 50%)
 Turbine: back pressure, extraction
 Rice processing industry
 Boiler: Fluidized bed boiler
 Turbine: condensing
Boiler burning pellets
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.1. Current status (cont.)
 Biomass briquette & pellet
Briquetting machines: screw, heated die
 Capacity: 100kg/hr
Pellet press machines: imported from Japan, China;
 Capacity: 300-500kg/hr
 Products: domestic use and export
Mixed rice husk&bagasse pellets
Rice husk pellets
Bagasse pellets
Pellet press machine
Rice husk briquette and briquetting machine
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.2. Prospect
 Vietnam has great potential for biomass and biogas production
 Biomass: more than 118 millions tons is produced annually
 Biogas (from husbandry activities): ~4.8 billion m3/year can be recovered
Type of biomass
Natural forest
Planted forest
Bare lands, deforested hills
Perennial industrial trees
Fruit trees
Scattered planted trees
Wood and carton residues
Sawdust
Construction wooden waste
Husks and straw
Bagasse and sugar cane leaves
Energy production
(million tons/year)
14,07
9,07
2,47
2,00
0,41
7,79
5,58
1,12
0,80
40,8
15,6
Corn residues
9,2
Coffee residues
1,17
Others (coconut, peanut, cassava,
etc)
Total
6,37
118,21
Biogas produced from waste
Husbandry waste
Buffolo
Output
(million m3/year)
527.5
Cow
881
Pig
1875
Poultry
1540
Sub - total
Production and processing
waste
4823.5
Potential needs to be
evaluated
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.2. Prospect (cont.)
 Vietnam’s demand for energy and electricity for the next two decades is
huge
 Electricity demand (2030): 695 billion kWh, 5.8% increase against 2012
 Demand for electricity investment (2011-2030): VND1,554.6 thousand
billion, making an average annual demand of about VND3.7 billion US$
 Electricity price should be increased:
 To ensure the cost recovery and proper profit margin.
 Electricity tariff should be incrementally increased to meet marginal cost
in long run (PDP VII)
 Biomass and biogas development is encouraged and supported
 Formulate strategy and master plan for RE development in Vietnam
(submitted to the Government of Vietnam)
Climate change adaptation strategy: biomass and biogas is one of the
options targeting at GHG emission reduction.
 Green Growth Strategy: Promote green energy/industry and low carbon
technology development (conversing waste into energy)
1. Current status and prospects for
biomass energy and biogas development in Vietnam
1.2. Prospect
 Orientation to develop biomass and biogas in 2011 – 2030
 Renewable energy:
16000
biogas
Khí
sinh học
Account for 9,4% of the
14000
system capacity.
 Average: 600MW/year
Including:
 Biomass electricity
planning is under going
 Developing investment
supporting mechanism
Rác thảiincluding
SK
Waste
Small
trong
đó: TĐN
hydropower
10000
Sinh
khối (solid)
(rắn)
Biomass
8000
6000
4000
2000
0
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
From biogas: 100 MW
12000
windgió
Điện
MW
From biomass: 2000 MW
solar
Mặt
trời
Geothermal
Địa
nhiệt
2. Market conditions and business opportunities for
biomass thermo – electricity and biogas sector
2.1. Opportunities to take advantage of supporting mechanism
 Being given preferences in terms of investment credits (soft loan, etc)
 Import tax: not applied to products that Vietnam cannot manufacture
 Corporate income tax: reduced or exempted for projects under special
investment incentives:
 Exempted in the first 4 years, reduced to 50% in the next 9 years




Being allowed to apply quick amortization approach
Land incentives: reduced or exempted
Environmental protection fee: exempted
Price subsidy:
Biomass electricity tariff and mechanism are being drafted and expected to be
approved late 2013 and come into force earl 2014.
 Tariff shall be included in a contract template, nonnegotiable.
Price: 3 options (FIT 1 component; 2 components and avoidable costs)
 Applied for electricity produced from bagasse and other biomass.
2. Market conditions and business opportunities for
biomass thermo – electricity and biogas sector
2.2. Regulations: restrictive condition(*)
 Biomass power investment project must follow the approved regional
biomass electricity plan and electricity master plan.
 Investor must submit report to Ministry of Technology and Trade for
approval if the investment project is not included in these plan.
 Connection points are determined by two parties in negotiation
process.
 Investor is responsible for the investment, operation and maintenance
of the grid connecting biomass power plant to the connection point.
 The construction of investment project can be implemented if it meet
the following requirements:
Investment certificated granted
Electricity purchasing documents established
Connection agreement made
Technical designs appraised
Note (*). According Draft
version No. 4
3. Investment into biomass and biogas:
Issues to consider
3.1. Regulations and procedures
 Investment certificate procedure: depends on
Project models (BOT, BOO, BT, IPP, PPP, etc.)
 Project scale (below or above VND1,500 billion)
 Connection or not connection to electricity grid
 Produce electricity or heat or both (CHP)
 Apply current incentive and supports to reduce investment cost and
improve cash flow
 Income and import tax reduction/ exemption
 Land and environmental protection fee reduction/ exemption
 Subsidy for CDM products
 Other supports (soft loans, investment contribution, funding the
formulation of investment project, etc.)
 Selection of local partners for project implementation
3. . Investment into biomass and biogas:
Issues to consider
3.2. Obstacles
Low price
• Energy price is still subsidied
(e.g. coal, electricity)
• Only financial cost has been
included, not external costs (eg,
environment, social cost)
Lack of planning
• Statistic data unavailable
• Inadequate data reliability
• Currently no provincial electricity
plan has been made. List of
investment project has not been
developed.
Inattractive electricity
tariff
• The current tariff is not attractive
in investor’s viewpoint
• New tariff is being drafted
• Is the tariff meeting with
investor’s expectation?
Fuel cost and fuel
provision reliability?
• How to ensure the adequate and
stable provision of biomass
throughout the project lifetime
(20 years)
• Seasonal and depends on other
enterprises
• Collectrion and transportation
3. Summary and conclusion
 Vietnam has great potential to develop biomass and biogas; however
the exploitation is limited and not correspondent to the nation’s
potential.
 The Government of Vietnam set target for renewable energy
development, including biomass development in a proper roadmap
to 2020 and 2030.
 Investment support and incentive mechanisms have been issued and
improved. This is solid basis to promote the development of biomass
and biogas markets in Vietnam.
 Price subsidy, new tariff and planning of biomass electricity
development is being implemented to facilitate the decisions of
investor in terms of making direct investment, joint venture, facility
provision and technology transfer.
Thank you for your attention!
Contact: Mr. Nguyen Duc Cuong
Director of Center for Renewable Energy and CDM
Institute of Energy
Tel: 84-4-38527085; Mobi: 84 (0) 912009700
Fax: 84-4-38523311
Email: cuongnd.re@gmail.com or cuongnd_ie@fpt.vn