VietNamNet Bridge – Ten investors are seeking approval for biomass power projects with an average capacity of 10 MW each, according to the Vietnam Institute of Energy under the Ministry of Industry and Trade.

Forty-four sugar refineries in the country will have to invest in biomass power plants as an irreversible business trend if they are to survive, the representative told the seminar, co-organized by the German Agency for International Cooperation (GIZ) and the General Department of Energy of the Ministry of Industry and Trade.

“International competition in the sugar sector will be intense from next year, so sugar firms cannot depend on sugar as a single source of income,” he said. Sugar producers will have to switch to in-depth investment by using cane bagasse as a fuel to generate power.

“We are willing to build power plants of 5MW to 30MW each. There are 12 to 14 investors considering the possibility of getting involved in those projects. However, we need investment guidelines for this sector; otherwise, we don’t know where we can start.”

He said he had asked Tuyen Quang authorities for advice on how to implement a biomass power project but they had given an unsatisfactory answer and asked him to hire a consulting firm. Therefore, he has put the plan on hold.

In the past, there were some bagasse-fueled power plants selling to Vietnam Electricity Group (EVN) for as low as four cents per kWh. However, the price has now risen to 5.3 cents and EVN is required to buy biomass power in line with the Government’s Decision 24 issued this year.

Sharing his view, Pham Quang Vinh, deputy general director of Can Tho Sugar Joint Stock Company, said the remaining issue is the lack of a clear mechanism.

His company has sufficient funding to develop a 30MW bagasse-fueled power plant at a cost of US$1 million for each megawatt, a little bit lower than the wind power development cost, he said.

However, power pricing negotiations with EVN have proven to be tough, he said, and there are no policies supporting the import of equipment for environmentally friendly power generation and facilitating the cooperation between power transmission firms and power plant investors.

He said if things went as planned, his firm’s bagasse-fired power project would be up and running in September 2017.

Biomass power is one of seven kinds of renewable energy that can be developed in Vietnam. Among them are small-scale hydropower plants (less than 30MW each), which now number 300 projects.

But the massive development of small and medium hydropower projects has caused negative consequences, leading to the removal of many projects. By last June, 415 small hydropower projects had been cancelled.

Vietnam has seen a number of wind power projects getting underway in the past few years. This is an area with high growth potential as Vietnam has a 3,200-km coastline, as well as many islands and highlands.

The country has about 67 wind power projects registered with capacity of six to 150 MW each. However, most of them have remained in the preparatory stage or have been suspended due to a lack of mechanisms and large investment.

Vietnam Renewable Energy Joint Stock Company’s 30MW project in Binh Thuan Province and Cong Ly Joint Stock Company’s  20MW project in Bac Lieu Province are the only two wind power facilities connected to the national grid.

Nonetheless, no biomass power projects have been licensed or listed in the national electricity development plan.

Nguyen Duc Cuong, director of the Center for Renewable Energy and Clean Development Mechanism under the Institute of Energy, said the potential of biomass in Vietnam is estimated at 150 million tons a year, equivalent to 50 million tons of crude oil. In addition to bagasse and rice husk, all kinds of fiber and waste from agricultural and forestry activities after harvest could be used as fuels for electricity generation.

SGT/VNN