Giz2013 en-identification-of-biomass-market-opportunities-in-vietnam 2

IDENTIFICATION OF BIOMASS MARKET
OPPORTUNITIES IN VIETNAM

www.renewables-made-in-germany.com

IDENTIFICATION OF BIOMASS
MARKET OPPORTUNITIES IN VIETNAM

Authors
Nguyen Duc Cuong et al
November 2011
Editor
Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH
On behalf of the
German Federal Ministry
of Economics and Technology (BMWi)
Contact
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Köthener Str. 2, 10963 Berlin, Germany
Fax: +49 (0)30 408 190 22 253
Email: pep-southeastasia@giz.de
Web: www.giz.de/projektentwicklungsprogramm
Web: www.exportinitiative.bmwi.de

This report is part of the Project Development Programme (PDP) South-East Asia. PDP South-East Asia is implemented by the Deutsche
Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry of Economics and Technology (BMWi)
under the “renewables – Made in Germany” initiative. More information about PDP and about renewable energy markets in South-East Asia:
www.giz.de/projektentwicklungsprogramm

This publication, including all its information, is protected by copyright. GIZ cannot be liable for any material or immaterial damages
caused directly indirectly by the use or disuse of parts. Any use that is not expressly permitted under copyright legislation requires
the prior consent of GIZ.
All contents were created with the utmost care and in good faith. GIZ assumes no responsibility for the accuracy, timeliness,
completeness or quality of the information provided.

Identification of Biomass Market Opportunities in Vietnam

I

Content
PREFACE

1

1

3

REVIEW AND ANALYSIS OF VIETNAMESE POWER INDUSTRY

1.1. Demand and growth of power in period 2001-2010

3

1.2. Current sale rates

5

1.5. Players in the power market

8

1.6. Roadmap to competitive power market

9

1.7. Grid

9

2 IDENTIFICATION AND EVALUATION OF BIOMASS ENERGY MARKET IN
VIETNAM

10

2.1

Identification and Evaluation of Biomass Energy Market in Vietnam Biomass sources

10

2.2

Use of Biomass in Vietnam

15

2.3
Status and prospects of projects using biomass for energy production in Vietnam
17
2.3.1 Status
17
2.3.2 Potential and uses of biomass for energy production (heat only, power only or combined heat and power at
industrial scale in Vietnam)
25
2.4
A number of information on the current situation of cooperation projects between Vietnam and
international biomass organizations

27

2.5
Economical nature of biomass projects
2.5.1 Investment costs
2.5.2 Operation & maintenance costs
2.5.3 Revenue of biomass power project

30
30
31
32

2.6
The actual state of biomass energy technologies in Vietnam (lists of domestic and overseas technology
suppliers)
36
2.7

Transportation of biomass, raw biomass price and transport cost in Vietnam

2.8
Information on potential companies which may become partners of German companies in the
development of biomass energy in Vietnam

3 REVIEW, STUDY AND DEFINITION OF POLICY FRAMEWORK FOR
BIOMASS/RENEWABLE ENERGY DEVELOPMENT IN VIETNAM

39

41

44


II

4 PROPOSAL ON DEVELOPMENT OF POTENTIAL PROJECTS IN THE BIOMASS
ENERGY TECHNOLOGY MARKET
61
4.1.
Identifying needs for technologies, services, specific products and opportunities for Vietnam-German
business cooperation
61
4.2.
Information on market entry possibilities and procedures for interested German companies who might
join in business (import/export) or investment (license, joint venture) activities in the area of biomass energy 65
4.3.
Information of Vietnam’s related organisations and their contact details – information on roles and
responsibilities of related bodies and various organisations in the biomass field
68

REFERENCES

71

ANNEX 1 LISTED CAPACITIES OF POWER PLANTS IN 2010 BY OWERSHIP

72

ANNEX 2 - RETAIL RATES OF POWER IN 2011

75

ANNEX 3 – ROADMAP TO COMPETITIVE POWER MARKET

78


III

List of Tables
Table 1-1. Harvestable amount of wood energy
Table 2-2. Wood waste usable for energy production
Table 2-3. Agricultural waste
Table 2-4. Listed consumptions of biomass by type and user (ktoe in 2010)
Table 2-5. Summarized information on husk-fuelled power plants
Table 2-6. Brief information on bagasse-based heat and power cogeneration factories at sugar mills
Table 2-7. Overview of information on cooperation projects between Vietnam and International organizations
Table 2-8. Investment unit costs of biomass burning power plant (USD/kW)
Table 2-9. Fuel consumption rate and its opportunity cost
Table 2-10. Operating time, auxiliary electricity rate and electricity amount sold
Table 2-11. List of biomass technology and equipment suppliers
Table 2-12. Relevant information on potential investors who can cooperate in biomass power development
Table 3-1. Summary of legal frameworks for renewable energy development in Vietnam
Table 3-2. Groups of obstacles and explanations and illustrations
Table 3-3. Framework orientations biomass energy development
Table 4-1. Potentials and possibilities for exploiting biomass energies
Table 4-2. Summary of grid-connected renewable electricity sources in operations
Table 4-3. Information of key related organizations in biomass energies

6
12
12
15
17
20
22
28
31
32
33
36
42
45
53
58
63
63
68

List of Figures
Figure 1-1. Demand and growth of power in 2001-2010
Figure 1-2. Percentage of power supply by ownership
Figure 1-3. Percentage of power supply by feedstock and fuel
Figure 1-4. Power source structure by 2020
Figure 2-1. Rice husks in the Mekong Delta
Figure 2-2. The husk-burning combined heat and power project demonstrated in Long An province
Figure 2-3. A biomass briquetter in Tien Giang (photo by N.D.Cuong)
Figure 2-4. Biomass-based power development plan of Vietnam
Figure 2-5. Wood drying boiler of Vietnam Boiler Joint-Stock Company installed in Hanoi
Figure 2-6. Diagram of transportation of biomass
Figure 2-7. Transporting rice husk to power plant from rice milling factory (photo by N.D.Cuong)
Figure 4-1. Balance between needs and exploitation capacities for primary energies
Figure 4-2. Biomass pellet compressing machine (source: Amadeus-Kahl)
Figure 4-3. Biomass briquette pressing, source: N.D.Cuong,IE

3
4
4
8
14
21
25
27
38
39
40
62
64
65


IV

Currency
1 USD =
1 EUR =

VND 20.83 (Sep 2011)
VND 28.384 (Sep 2011)

Measurement
W
kW
MW
GW

Watt
Kilowatt
Megawatt
Gigawatt

Wp
kWp
MWp
GWp

Watt peak
Kilowatt peak
Megawatt peak
Gigawatt peak

Wh
kWh
MWh
GWh

Watt hour
Kilowatt hour
Megawatt hour
Gigawatt hour


List of Acronyms
ADB

Asian Development Bank

BMWi

German Federal Ministry of Economics and Technology

CDM

Clean Development Mechanism

CERs

Certified Emission Reductions

CHP

Combined Heat and Power

EU

European Union

EVN

Electricity of Vietnam Corporation

FBC

Fluidized Bed Combustion

GDP

Gross Domestic Product

GHG

Greenhouse Gas

GIZ

German Agency for International Cooperation

GT

Gas Turbine

GW

Gigawatt

HCMC

Hochiminh City

IE

Institute of Energy

IP

Industrial Park

IPP

Independent Power Producer

JICA

Japanese International Cooperation Agency

JSC

Joint Stock Company

Kcal

Kilocalory

kWh

Kilowatts per hour

LNG

Liquefied Natural Gas

MARD

Ministry of Agriculture and Rural Development

MOIT

Ministry of Industry and Trade

MW

Megawatt

Mwe

Megawatt electrical

ODA

Official Development Assistance

PEP-SOA

Project Development Program for Southeast Asia

PPA

Power Purchase Agreement

PDD

Project Design Document

PVN

PetroVietnam

REAP

Renewable Energy Action Plan

SIDA

Swedish International Development Agency

ST

Steam Turbine

TKV

Vietnam Coal and Mineral Group

toe

Ton of Oil Equivalent

VCB

Vietcombank (Vietnam Foreign Trade Bank)

VND

Vietnam Dong

WB

World Bank

V


1

Preface
The targets and orientations for the development of Vietnam’s national electricity industry for the
coming period are set in Decision No.1208/QD-TTg issued by the Prime Minister on July 21st, 2011 to
approve the “Vietnam Power Development Plan in the Period 2011 – 2020 with vision to 2030”, in
which, the priority and incentives will be given to developing renewable resources to increase the
electricity production of renewable power from the neglect able to 5.6% and 9.4% by 2020 and 2030
respectively (based on their design capacity and inclusive only of small hydropower plants with the
capacity of up to 30MW). Of these targeted renewable resources, biomass-generated power will make up
0.6% and 1.1%, or 500 MW and 2000 MW, respectively of the total power supply by 2020 and 2030.
The developing country of Vietnam has the geological position, climate and agro-forestry powered
economy that give rise to the availability of renewable feedstock for energy production for both meeting
the domestic needs and helping protect the environment as fossil fuel substitutes (by reducing GHGs,
acid rain – inducing emissions, and dust).
The GIZ-implemented Project Development Programme (PDP) Southeast Asia, funded by the German
Federal Ministry of Economics and Technology (BMWi), is designed to enhance business cooperation
and experience exchange between Vietnamese and German companies. This study is part of the project.
The study aims to give an overview of production and use of biomass in Vietnam and identify the
potentiality and challenges faced by the local biomass technology market.
The specific contents are as follows:
■
■
■
■

Overview of the Vietnamese power industry;
Identification of the Vietnamese biomass market;
Review of legal framework for renewable energy development in Vietnam;
Proposed ways to develop the biomass energy technology and market.

As a result, the study is made up of 4 components:
■

■

■

Component 1 is “Overview of the Vietnamese power industry”. This part states the status of power use,
power sources, power demand, and targets for power sources in 10 years to 2020. Included in this part are
tables of power prices by user, covering those offered small hydropower plants of less than 30MW and
windmills. A roadmap towards a competitive power market and players in this market are also
incorporated.
Component 2 is “Identification of the biomass market in Vietnam”. This part is focused on the analysis
and evaluation of the production and use of biomass by type of biomass and status of on-going biomass
projects. Also included is a review of the viability and technological applications. There are updated
statistics on the business activity in the biomass sphere and presentations on prospects of technological
applications and biomass availability.

Component 3 is “Review of legal framework for renewable energy development in Vietnam”.
This part lists the brief summary of legal documents such as strategies/plans and policies related


■

2

to the development of renewable energy/biomass energy. Advantages and obstacles are
identified and justified.
Component 4 is “Proposed ways to develop the biomass energy technology and market”. The
identification of biomass demand, prospects of technology development, and Government’s
targets for biomass power are summarized and analyzed in this part. Investment opportunities
and information on markets and international partners involved in the Vietnamese biomass are
reviewed and commented on.

Despite the great efforts put in the collection of information and data on biomass in Vietnam as presented
in this paper, there remain some limitations of expected data and information. These limitations have
been triggered by the unavailability of sources, data and statistics on resources, use and technology
biomass that is a new sphere in Vietnam1 (i.e., there is no agency responsible for making, updating and
reporting biomass statistics). The access to and collection of information on biomass is challenging, no
matter it is from domestic or international side. Biomass projects often come in small or medium size
(Category B or Category C projects2 like rice husk and bagasse power-generating projects. Under the
rule, they are licensed by local (provincial) governments to operate. It takes time to approach investors
and local authorities for information. In some cases, the approached are reluctant to provide information.

1
Biomass is the first type of renewable energy to be mentioned in the Government’s renewables development plan (Decision No.1208/QD-TTg
of July 21st, 2011).
2
Small and medium projects (Category B and Category C or smaller than Category C) have total investment of up to 1500 billion VND (73
million USD) each.


1

3

Review and Analysis of Vietnamese Power Industry

1.1. Demand and growth of power in period 2001-2010
In the 10 years from 2001 to 2010, commercial power provided to meet economic and domestic needs
increased constantly at the average annual growth of 14.5%. Commercial power rose from 31.1 billion
kWh in 2001 to 99.1 billion in 2010, almost a triple increase. The commercial power amount in 2010 of
99.1 billion kWh represented a 14.3% jump from the 2009 level and this growth rate was 2.5 times
higher than that of GDP. The following chart illustrates the demand and growth of power energy in
Vietnam between 2001 and 2010.
Power demand 2001 - 2010
120,000

18%
17.0%

14.4%

14.3% 14%

13.7%
12.9%

13.0% 12.8% 12.8%

80,000

12%
10%

60,000
8%
40,000

Growth rate (%)

Power demand (GWh)

16%

15.5%

100,000

6%
Power demand

20,000

4%

Growth rate
2%

0
2000

0%
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Figure 1-1. Demand and growth of power in 2001-2010
Statistical data of late 2010 put the total installed capacity of all power sources in Vietnam at 21,542
MW, of which EVN accounted for 11,848 MW (55%) and outside-EVN sources (inclusive of institutions
where EVN is a shareholder); 9,694 MW (45%). Power sources at the time of 2010 are shown in the
following tables and charts by ownership, feedstock and technology applied.


4

Classification by ownership

PVN
11%

Imported
5%

Others
1%

Foreign invested
10%

EVN
55%

TKV
5%
Joint stock
Private
11%
2%

Figure 1-2. Percentage of power supply by ownership

Classification by type of production

Imports
5%

Others
2%
Hydropower
38%

Gas turbine
32%

Oil thermal power
3%

Coal thermal power
18%

Coal thermal power
2%

Figure 1-3. Percentage of power supply by feedstock and fuel
Updated statistics show that in 2010, newly started sources of power supply totalled 2,546MW.
However, as most went into operation in late 2010, their contribution to the total supply of 2010 was
insignificant.


5

1.2. Current sale rates
Since the issue of Decision No. 26/2006/QD-TTg by the Prime Minister in December 2006 to marketise
power rates, there have been 5 increases. The first increase came on January 1st, 2007 when the price
climbed to 842 VND/kWh, an increase of 7.6% from the 2006 level. In each of the ensuing years, the
price went up steadily in the range of 5 -10%. The highest rise was recorded on March 1st, 2011 when it
surged 15.28% to 1,242 VND/kWh, equivalent to 6 US cents at the September 30th 2011 exchange rate
of VND/USD published by VCB.
On April 15th, 2011, the Prime Minister issued Decision No. 24/2001/QD – TTg, whereby, instead of
being changed once a year on March 1st every year, the price of power would be revised every 3 months.
On August 19th, 2001, the Ministry of Industry and Trade promulgated Circular 31/2011/TT-BCT to
provide guidance on how to revise the power rates, depending on the fluctuations of 3 parameters, i.e. i)
Fuel price; ii) VND-USD exchange rate; and iii) contribution by power suppliers to the national grid3.
The decision, which enables the pricing to change automatically, is effective on September 1st, 2011.
Following is a summary of what the April 15th, 2011 Prime Ministerial decision prescribes the revision
of power sale rates in open-market principles.
If the fuel prices or the VND-USD exchange rate increases from the parameters used to calculate the
current rates or the contribution by power suppliers changes from the plan approved by the MOIT as the
basis to calculate the current price, the current rate might be revised upwards:
a) by 5%, where the EVN reports to the MOIT and seeks its approval; or
b) by more than 5%, where the EVN reports to the MOIT and refers the new pricing scheme to the
Ministry of Finance for appraisal.
Fifteen days after the MOIT has submitted the new pricing scheme to the Prime Minister, if the
Government gives no feedback, the EVN can automatically raise the price by 5%.
Current power rate table for 2011 is described in detailed in Annex 2.
Table of wind power rates
The buyer of power must buy all the power produced by a wind mill with the price at the delivery point
of 1,614 VND/kWh (excluding VAT and equivalent to 7.8 UScent/kWh). The bid price is subject to
fluctuations in the exchange rate between VND and USD4.

3

Composition of power production is subject to change due to the difference in contributions by coal, hydro or gas power producers and their
price.
4
In Vietnamese law, the currency used in purchase and sale contracts on the Vietnamese territory is VND. So, the decision specifies that the
purchase price calculated for the investor must use VND. At the time of the decision making, 1 USD is equivalent to 20692 VND, so the
coefficient is 7.8%. The decision to allow the power purchase price to adjust to the VND-USD exchange rate favors the investor. It is understood
that any wind power projects selling power after the issue of this Decision can base on the current exchange rate to know the power purchase
price. For example, in June 2012 when a wind power plant sells power to the VND, the exchange rate is 22000 VND/USD, then the power price
stated in the contract will be 22000x7.8% = 1716 VND/kWh (not 1614 VND).


6

The Avoided cost Tariff table for 2011 (issued together with Decision 66/QĐ-ĐTĐL issued on
December 31st, 2010 by the Director of the Power Regulation Department).
(VCB-offered September 30th 2011 exchange rate: USD=20,830 VND)

Item

Dry season
MidOffOn-peak
peak
peak

Power rate (VND/kWh)
North
603
Middle
573
South
575
Capacity rate (apply to 3
1,772
regions) (VND/kWh)

590
567
568

561
563
555

Onpeak

Midpeak

529
481
511

498
468
501

Wet season
Offpeak
484
460
492

Residual
power
242
230
246

The average avoided cost tariff, according to this table, is 916 VND/kWh (equivalent to 4.43
UScents/kWh). However, such a low price can apply only to the small hydropower plants as renewable
energy projects that are near the road, connected to the national grid and have large availability of water
supply.

1.3. Power generation and potential to 2020 (next 10 years)
In terms of power generation, the Power Development Planning for the Period 2011 – 2020 and Vision to
2030 set the following targets:
■
■
■

To provide sufficient power for domestic use with the total of generated and imported power
ranging from 194 – 210 billion kWh by 2015 and range 330 - 362 billion kWh by 2020.
To develop renewable resources for power generation, increase the share of power generated
from this source from the insignificant to 5.6% of the total power production by 2020.
To achieve 330 billion kWh in generated and imported power by 2020 with hydropower
accounting for 19.6%; coal-burning thermal power, 46.8%; gas-burning thermal power, 24%
(LNG 19.6%); renewable energy power, 4.5%; nuclear power, 2.1%; and imported power, 3%.

1.4. Existing power generating sources and predictions in next 10 years
As mentioned in 1.1 about the power demand in the period 2001 – 2010, the installed capacity at the time
of December 31st 2010 of all power sources in Vietnam was 21,542MW, of which the usable capacity
was 19,735MW.


7

Vietnam’s demand for power is likely to increase 3.3fold in 10 years, from 100.071 billion kWh in 2010
to 194 billion kWh by 2015 and 330 billion kWh by 20205. To have sufficient power for national
development and backup, the Government offers to:
■
■
■
■
■
■
■
■
■
■

Achieve balanced development of power sources in terms of capacity in each of the 3
regions of North, Middle and South;
Increase the backup capacity by 6%-7% to take in account the often delay of 1-2 years in the
building of power plants;
Achieve the balanced supply of coal and natural gas by tapping more natural gas fields;
Increase the share of coal thermal power in the Middle and South;
Keep the coal thermal power under 60% of the total power supply;
Build more small hydropower plants and renewable energy plants to a proper proportion;
Introduce pumped-storage hydropower plants in the South to put the number of hydropower
plants on a level with thermal power plants;
Build nuclear power plants to reduce reliance on fossil fuels;
Increase the importation of power from Laos, Cambodia and China;
Carry out more BOT and BOO projects;

In light of those points of view, the roadmap for the development of power sources in Vietnam over the
next 10 years is set as follows (pursuant to Decision No. 1208/QD-TTg dated July 21st, 2011 by the
Prime Minister);
■
■
■

■
■
■

■
■

To develop biomass power as a source of burning and generating to achieve 500 MW by 2020;
To increase the wind power capacity from the neglectable to 1,000 MW by 2020;
To give priority to the development of hydropower plants, especially those have the double
functions of food protection, water supply and power generation to bring the total capacity of
hydropower plants from 9,200 MW now to 17,400 MW by 2020;
To put into operation pumped-storage hydropower plants to increase the efficiency of the power
system and achieve 1,800 MW to be generated by pumped-storage hydropower plants by 2020;
To reach 10,400 MW in natural gas thermal power by 2020;
To make good use of domestically produced coal to feed thermal plants and prioritize locally
made coal for Northern thermal plants to achieve 36,000 MW in coal – burning thermal power
by 2020.
To build nuclear power plants to offset the primary energy sources when they have been
exhausted and commission the first in 2020;
To build power plants feeding on LNG to diversify power feedstock for power and gas security
and achieve 2,000 MW in LNG-run power by 2020;

5
Decision No.1208/QD-TTg of July 21st, 2011 by the Prime Minister to approve the national power development planning for the period 2011
– 2020, taking into account a vision to 2030.


■

8

To achieve 75,000 MW in total power capacity by 2020, of which hydropower accounts for
23.1%; pumped-storage hydropower, 2.4%; coal-burning thermal power, 48%; gas-burning
thermal power, 16.5% (including LNG, 2.6%); renewables, 5.6%; nuclear power, 1.4%; and
imported power, 3.1%.

Details are illustrated in the following chart:
Power source structure by 2020
Coal-burning
Pumped storage

Thermal power

Hydropower

48.0%

2.4%

Hydropower

Gas-burning

23.1%

Thermal power
Imported
Power
3.1%

Renewables
5.6%

Nuclear
Power
1.3%

16.5%

Figure 1-4. Power source structure by 2020

1.5. Players in the power market
The EVN is holding equity in most power plants and the entire power transmission, operation,
distribution and retail system.
In power production, it is holding the controlling 70% equity in the power plant market. The rest is
shared by State corporations such as PVN, TKV, Song Da, etc.; international investors (in BOT and IPP
projects) and private Vietnamese investors as Independent Power Producers (IPPs). These plants sell
power to the EVN under longer-term Power Purchasing Agreement (PPA) (see further Table 1.1).
However, under the approved industry development roadmap, the Vietnamese power market will be
composed of three markets, as follows:
■

Power generation market

■

Power wholesale market; and

■

Power retail market


9

The competitive power generation market operates on the basis of a single power buyer. All power
producers will sell power to this only buyer under the PPA and offer their prices on the instant delivery
market. Power distributors under the EVN will be re-arranged to become financially interdependent
firms.
In the coming period, (see 1.6 below for further details), the competitive power generation market will
come into operation under a charted roadmap. Players in this market include:
■
■
■
■
■

Power producers: power plants with the capacity of 30 MW or higher, connected with the
national rid (except windmills and geothermal plants);
A single power buyer: EVN Power Purchasing Company;
Power system and power market regulator: National Power System Regulation Centre;
Provider of power measuring data collection and management services: Information Technology
Centre under the EVN Information-Telecommunication Company; and
Power transmission service provider: National Power Transmission Corporation.

1.6. Roadmap to competitive power market
Pursuant to Prime Minister Decision No. 26/2006 of January 26th, 2006 specifying the roadmap,
conditions and levels of a competitive power market in Vietnam, the Vietnamese power market will inch
toward a competitive market through 3 levels:
■
■
■

Level 1 (2005 - 2014): to make the power generation market competitive.
Level 2 (2015 - 2022): to make the power wholesale market competitive.
Level 3 (from 2022 on): to make the power retail market competitive.

Details of the roadmap to competitive power market are described in Annex 3.

1.7. Grid
The Vietnamese power transmission grid is operating at voltage 500kV, 220kV and 110/66kV. The
500kV lines link the North, Middle and South. The 220kV lines cover the whole nation with the total
length of 8,500 km (in 2010). The total length of the 110/66kV lines is about 12,500km.
A general assessment of the Vietnamese power grid development suggests that up to 2010, many
transmission grid projects had been carried out but able to meet just 50% of the plan6, specifically the
500kV grid meeting just 41% and 220kV grid, about 50%. Causes for this failure to fulfil the plan are
lack of funds, problems with site clearance, rising input material price and limited contractor ability, to
name a few.

6

Decision number 110 of the Prime Minister to approve the Power development planning of Vietnam to 2015 with vision to 2025 (Master Plan
VI)


10

2 Identification and Evaluation of biomass energy market in
Vietnam
In the coming period 2011-2020, the following tasks are set7 for the Vietnamese transmission grid:
■
■
■
■

To provide reliability in power delivery and transmission and reduce power loss in transmission;
To ensure that all power hubs across the nation connect to the unified grid;
To expand the 220 and 110kV grids to meet the transmission requirements when different power
plants have been commissioned and
To prepare a power plan complete with backup and flexibility to provide secure, stable and
quality power in terms of voltage and frequency.

2.1 Identification and Evaluation of Biomass Energy Market in Vietnam
Biomass sources
Being an agricultural country, Vietnam boasts a wide variety of biomass sources in large volumes that
are way usable to produce energy such as heat and power.
Primary solid biomass sources in Vietnam comprise: (i) Wood energy; (ii) Wood processing waste
(sawdust, butt ends, etc.); and iii) Agricultural waste. Agricultural waste includes post-harvest residues
such as rice straw, sugarcane leaves and buds and residues from other agricultural crops such as
groundnuts, beans, coconuts, etc., and food processing wastes such as rice husks, bagasse, coffee bean
shell, cashew nut shell, etc..
The term ‘wood energy’ (wood fuel) is understood as wood-based fuel, including fuel wood such as tree
trunk, tree branch, shrub, etc., that are collected by cutting or pruning trees. Wood fuel is harvested from
natural forest (deforestation, forest fires, etc.), production forest, forest plantation, bare land8 and through
the thinning and pruning of industrial perennials (tea, coffee, rubber, cashew, etc.), fruit trees (orange,
longan, etc.) and scattered trees.

i) Wood fuel/wood energy
Wood energy from natural forests, production forests and forest plantations: Up to the end of 2008,
the total area of forest in Vietnam was approximately 13.11 million ha, including 10.35 million ha of
natural forest, 2.76 million ha of forest plantations9. The rates of sustainable logging of fuel wood are
legally set at 1 ton/ha/year for natural forest and 2.5 tons/ha/year, for forest plantations. At such regulated

7

Decision number 1208 of the Prime Minister to approve the Power development planning of Vietnam to 2020, with vision to 2030 (Master
plan VII)
8
Bareland includes unused land and harvested forest. It is often covered with grass, shrub and small woody trees.
9
Decision No. 1267/QD-BNN-KL of May 4th, 2009 by the MARD.


11

rates, the total wood fuel harvested from natural forests and forest plantations amount respectively to
10.35 million and 6.9 million tons a year.
According to the Forest Development Strategy for the Period 2006 – 201010, the forest area is planned to
reach 14.07 million ha in 2010, including 10.45 million ha under natural forests and 3.63 million ha
under forest plantations. Using the sustainable logging rates, it is calculated that the wood amount in
2010 from natural forests is 14.07 million tons and 9.07 million tons from forest plantations.
Bare land: In 2005, the area of bare land was 6.41 million ha11. These tree-bare lands produce 3.21
million tons of fuel wood per year. With the afforestation program in place, the area of bare land is
planned to drop to 4.94 million ha by 2010. Using the regulated rate for sustainable harvesting of fuel
wood of 0.5 ton/ha/year, the total amount of fuel wood in 2010 is planned to be 2.47 million tons.
Industrial perennials: In 2005, the total area of industrial perennials was 1.63 million ha12, of which tea
accounted for 7.5%; coffee, 30.5%; rubber, 29.6%; pepper, 3%; cashew, 21.3%; and coconut, 8.1%.
Based on the sustainable fuel wood harvesting rate, the amount of fuel wood harvested in this year was
1.95 million toe and is planned to reach 2 million tons/year by 2010.
Fruit trees: In 2005, the area under fruit trees was 0.767 million13, producing 0.38 million tons of fuel
wood. Considering the expanding rate of fruit tree acreage of 10 ha/year, the fuel wood amount from
fruit trees might reach 0.41 million tons by 2010.
Scattered trees: In 2005, some 3.45 billion scattered trees were planted14, which is equivalent to 3.45
million ha planted at the density of 1,000 per ha. Scattered trees produced 6.04 million tons of fuel wood
in 2005. In the period 2006-2020, about 200 million trees are planned to be planted every year. As a
result, the amount of fuel wood to be harvested by 2010 is expected to reach 7.79 million tons.

10

Decision No. 18/2007/QD-TTg of July 5th, 2007.
Decision No. 1267//QD-BNN-KL of May 4th, 2009 by the MARD on the status of national forest land.
12
Vietnam Statistical Yearbook of 2010
13
14
Decision No. 1267//QD-BNN-KL of May 4th, 2009 by the MARD on the status of national forest land.
11


12

The amount of wood fuel from the above mentioned sources are shown in the following table.
Supply source of wood
energy
Natural forest
Forest plantation
Bare land
Industrial perennial
Fruit tree
Scattered tree
Total

Harvestable amount of wood energy
(million tons in 2010)
14.07
9.07
2.47
2.00
0.41
7.79
35.81

Note: The calculations result from using the formula: EF = A × CSE, where: EF – harvested wood amount
(ton/year); A – area of forested land or tree planted area (ha); CSE – sustainable wood harvesting rate (ton/ha/year).

ii) Wood waste
Wood waste at wood processors (sawmills and furniture makers) include wood chips, butt ends, bark and
sawdust. The amount of wood waste is calculated on the basis of domestic wood production and sawn
wood15 that includes also the annually imported. In 2010, about 16 million m3 was processed to produce
6.5 million m3 of sawn wood. The ratio between wood waste and processing wood is 0.616 (10% of
sawdust and 50% of other wood waste). The total amount of wood waste produced from sawmills in
2010 was 9.5 million m3, equivalent to 6.7 million tons, including 5.58 million tons of wood waste and
1.12 million tons of sawdust waste.
Table 2-2. Wood waste usable for energy production
Sources of wood waste
Wood processing
- Butt ends and tree bark
- Sawdust and shavings
Building (timber formwork and house repairs)
Total
Source: Study Team, Institute of Energy, 2011

15
16

Institute of Energy, 2009, Vietnam Renewable Energy Planning.

Wood waste useful for energy production
(million tons in 2010)
5.58
1.12
0.80
7.50


13

iii) Agricultural waste
Annual agricultural waste comes in 2 main types: i) postharvest residues such as rice straw, sugarcane
leaves and buds, corn leaves and stems and cobs, cassava stems, coconut shells and coir, etc., and ii) food
processing waste such as rice husks, bagasse, groundnuts shell and coffee bean shells, etc..
Rice straw: Postharvest rice residue is rice straw. The annual amount of rice straw depends on the
annual harvest of rice17. The amount of rice straw produced in 2010 was 40 million tons (ratio of rice
paddy/rice straw is 1:1).
Post-harvest residues of sugarcanes: Postharvest sugarcane residues are cane roots, leaves and buds.
The amount of sugarcane residues depends on the annual harvest of sugarcane18. The 2010 amount
totalled 7.8 million tons (cane/residue ratio is 1:0.3).
Post-harvest residues of corn: Postharvest corn residues are stems, leaves and cobs19. The kernel/corn
residues ratio is 2. The 2010 residue amount was 9.2 million tons.
Cassava stems: Postharvest cassava residue is stems. In rural areas, cassava stems are used to cook or
hedge. The cassava root harvest of 2010 was 8.5 million tons20. The amount of residues was 2.49 million
tons (ratio is 1:0.3).
Rice husks: Rice husks are produced from rice processing. Each ton of paddy produces 0.2 ton of husks.
The 40 million harvest in 201021 produced 8 million tons of husks.

17

19
20
21
18


14

Figure 2-1. Rice husks in the Mekong Delta
Bagasse: Bagasse is produced from sugarcane extraction. The sugarcane/bagasse ratio is 0.3. The 2010
amount of 24 million tons of crushed sugarcanes22 produced 7.8 million tons of bagasse.
Groundnut shells: The 2010 harvest of groundnuts amounted to 0.49 million tons23. Groundnut
processing by-product is ground nut shells. The groundnut/nutshells ratio is 0.3. The 2010 ground nut
shells amount was 0.15 million tons.
Coffee bean shells: The 2010 coffee bean harvest was 1.1 million tons24. Given the coffee bean
shell/coffee bean ratio of 0.15, the 2010 coffee bean shells was 0.165 million tons.
Cashew nut shells: The 2010 harvest of cashew nuts was 0.29 million tons25. With the cashew nut
shells/cashew nut ratio of 0.3, the 2010 amount of cashew nut shells was 0.089 million tons.
Coconut waste (coconut shells and coir) and other agricultural waste such as soybean plants, etc. ranges
4 – 5 million tons per year26.

22

24
25
26
Interpolation and estimation from Vietnamese renewables planning data, IE, 2009
23


15

Table 2-3. Agricultural waste
Agricultural waste
Rice straw
Postharvest sugarcane residues
Postharvest corn residues
Cassava stems
Rice husks
Bagasse
Groundnut shells
Coffee bean shells
Cashew nut shells
Others (coconut, soybeans, etc.)
Total

Usable agricultural waste (million tons in
2010)
40.00
7.80
9.20
2.49
8.00
7.80
0.15
0.17
0.09
4.00
74.90

Source: The calculations result from the formula: CR = CP × RCR, where CR –
agricultural crop residues (tons/year), CP – agricultural crop harvest (tons/year), RCR –
residues/harvest ratio (tons of residues/tons of harvest).

2.2 Use of Biomass in Vietnam
The biomass sources identified above are being used for energy or non-energy purposes or wasted by
burning, dumping into rivers and canals, etc. Below is a summary of use of biomass by biomass type and
by user.
i) Use of biomass by biomass type
Wood energy: Surveys and investigations by Vietnamese experts suggest that about 20% of the fuel
wood changes hand in the market while the rest is collected for self consumption. Fuel wood is used for
building material kilns, food processing and cooking. The total amount of fuel wood now stands at 22
million tons27.
Rice straw: Previously, rice straw is used for cooking in rural areas. However, improved living
conditions in the last 2 – 3 years have resulted in a switch to other fuels, encouraging farmers to leave
rice straw behind in the field and roads after threshing and burn it to cause smoke and dust pollution to
nearby urban population. The total amount of rice straw used as fuel reduced from 7.8 million tons in
2005 to 4 million in 2010, which is just 10% of the total rice straw produced.
Rice husks: Rice husks are partially used for brick burning, pottery burning and rice drying (in the
South). A small amount is used for cooking at farming households. The amount of rice husks as fuel now

27

Fuel wood has average humidity of 15% and heat value of as low as 3600 kcal/kg


16

accounts for 38% of the total 3 million tons produced annually. However, as brick kilns are planned to
phase out28, the use of rice husks for firing is to drop soon.
Bagasse: About 80% of bagasse at sugar mills is burned to feed boilers that produce electricity and heat
for sugar refining. However, not connecting with the grid for selling the redundant power, the mills just
burn the bagasse as a waste. Now, they are braining out ways to sell their redundant power to the grid.
The total amount of bagasse to this aim is nearly 4 million tons.
Other by-products: Coffee bean shells, peanut shells, corn stems and cobs, soybean plants, coconut
shells, sugarcane leaves and buds, sawdust and wood chips can also be used as fuel. It is estimated that
just 40% of the total amount of these biomass types is being used. The total amount for heat generation
from this source of biomass is 1.688 million toe.
ii) Use of biomass by user
There are two main users of biomass: households and small rural industrial users.
Household users: The household uses biomass as fuel for cooking human and animal meals and running
small processing machines. Investigation data combined with previous studies show that the total amount
of biomass used by these users is 10.6 million toe a year, or 76% of the total biomass consumption.
Small rural industrial users: The small rural industrial user uses biomass for food processing, such as
the making of rice noodles, cakes and tofu, liquor distilling, drying of tea, rubber and coffee, sugar
refining, and producing of building materials such as bricks, tiles, lime, pottery, etc. The total amount of
biomass used for heat generation by these users is 3.33 million toe per year, representing 24% of the total
biomass consumption.

28

The Ministry of Construction, Plan to replace intermittent brick kilns


17

Table 2-4. Listed consumptions of biomass by type and user (ktoe in 2010)
User

Fuel wood

Cooking
stove
(residential cooking)
Kiln
Burner

Heat

Husk

Biomass type
Straw
Bagasse

Others

Total

6552

395

990

88

890

8915

663
1145

405
100

130

100

100
698

1168
2173

Combined
Combined
energy
heat
and
552
552
generation
power
Total
8360
900
1120
740
1688
12808
Source: Vietnam Institute of Energy, 2010, study report on renewables planning in Vietnam and
estimation
Note: Heat values of:
+ Wood fuel: 3800 kcal/kg
+ Rice husks: 3000 kcal/kg
+ Straw: 2800 kcal/kg
+ Bagasse: 1850 kcal/kg

2.3 Status and prospects of projects using biomass for energy production in
Vietnam
2.3.1

Status

At project level, there are 4 types of technologies applied to use biomass for energy production in
Vietnam, namely: i) Heat generation only; ii) Power generation only; iii) Combined heat and power
(CHP); and iv) Biomass briquetting/biomass palletizing.
i) Biomass-based heat generation technologies
There is great demand for use of heat for drying by rice, coconut, coffee and cashew processors. A
primary survey of the use of biomass for wood processing in Dan Phuong, Hanoi and for coconut
processing in Chau Thanh, Ben Tre province29 shows that there are tens of biomass burning kilns in each
of these districts.
At these wood processors, the kiln is designed to burn raw biomass. The output heat can be water vapour
(steam) or hot air, which is used to dry wood products. Almost all the processors use butt ends produced
from wood processing as fuel. They are of small size, each with the capacity ranging from 5 – 10 tons of
saturated steam per hour and all made in Vietnam by the Vietnam Boilers Company.

29

Source: Institute of Energy, July 2011, Task Report 1, the project EEP Mekong


18

Likewise, the coconut processors use raw biomass as fuel, which includes rice husks and coconut
residues such as coconut shells and coir. The boilers are similar to those used at the mentioned wood
processors.
Besides, in the Mekong Delta, which is distant from coal mines in the Northern province of Quang Ninh,
hence using coal at a price 1.5-2 times higher than in the North, rice husks are used for brick kiln firing
in such provinces as Dong Thap, Vinh Long and Binh Duong and more investment is being poured into
building such husk-burning kilns.
Reports from the website ‘http://danviet.vn’30 say that one year into the use of the Hoffman kiln, a
German continuous husk-burning brick kiln, the Kim Thach Co., Ltd., at the Tan Duong industrial park
in Lai Vung, Dong Thap province has contributed to reducing the local pollution. The Hoffman kiln31,
designed to burn bricks with 2 tunnels each with 10 continuous burning chambers, can produce 20,000
bricks per day-night. The new brick burning technology is reported to be more energy-efficient than the
intermittent (traditional) kiln. The German-styled kiln consumes up to 0.35 kg of husks to burn 1 kg of
brick while the conventional kiln uses 0.5 kg of husks for 1 kg of burnt brick. The new-style brick kiln
helps save 30% of feedstock. Another plus is that the German kiln takes only 24 hours to complete the
firing of ware while the conventional, 20 days.
Another project is the study to improve the husk-burning brick kilns in the Mekong Delta, undertaken by
the Ministry of Science and Technology under the sponsorship of the Swedish International
Development Cooperation Agency (SIDA)32. The project aims to introduce the Thai-style continuous
husk-burning brick kiln in An Giang province to reduce environmental pollution and make use of
available rice husks and other agricultural by-products. The project’s success is being multiplied to other
provinces in the delta such as Tay Ninh, Soc Trang and Dong Thap. This kiln’s working principle is that
the firing temperature of the firing chamber is controlled to increase gradually until the ware is ripe.
Workers can monitor the temperature by looking through a flame watch hole or at a heat meter. While
the first chamber is working, the adjacent chamber starts its primary firing. The hot air passes through
the primary firing chamber to the drying chamber. Consequently, the emissions after going from the
firing chamber through the primary firing chamber and drying chamber become cooler and thus fuel has
been put to effective use. Furthermore, the emissions flowing through the brickworks of the next
chambers will be partially filtered, hence making the emissions spewed into the open air less polluting.
ii) Biomass-based power generation projects
To date, there is no operational biomass-burning power plant in Vietnam. However, data put together
from local reports suggest that about 10 investors have applied to build such plants each averaging 10
MW. They include eight Vietnamese investors and two partnerships with foreign investors. The reports
show that most are likely to use rice husk to generate power for sale to the national grid and employ the
fluidized bed combustion (FBC) technology.

30

Source: http://danviet.vn/54183p1c34/khac-phuc-o-nhiem-bang-lo-gach-dot-trau-hoffman.htm
Source: http://danviet.vn/54183p1c34/khac-phuc-o-nhiem-bang-lo-gach-dot-trau-hoffman.htm
32
Source: http://vaidiakythuat.net/nung-gach-bang-trau.html
31


19

These candidate projects concentrate in Mekong Delta provinces, specifically two in Tien Giang; three in
Dong Thap; three in Can Tho; and one in Kien Giang. The following is a brief introduction of these
projects. The reasons for their concentration in this region are: a) This region accounts for 55% of the
national total of rice husk; b) This region is distant from fossil fuel sources, especially coal; and c) there
is great demand for heat and power in this region, especially in the rice harvesting season.
The 9-MW husk-burning heat and power cogeneration plant in Cần Thơ. The investor is the
HCMC-based Dinh Hai Co., Ltd.. The plant produces 20 tons of steam per hour, which is sold to
other companies inside the Tra Noc industrial park. Construction started in 2007 and is
composed of three phases with Phase 1 installing a boiler of 20 tons of steam per hour serving
companies in the industrial park; Phase 2 to install a 2-MW steam-turbine generator; and Phase 3
to expand its capacity to 9 MW. Schedule by phase is detailed as follows:
– Phase 1: from 2007-2009; Capacity of 20 tons of steam/h; not generating power
– Phase 2: from 2011-2012; Capacity of 20 tons of steam/h; generating 2 MW
– Phase 3: from 2013-2014; Capacity of 70 tons of steam/h; generating 9 MW

■

■

The 10-MW husk-burning power plant in Tien Giang. The investor is the HCMC-based Tan Hiep Phuc
Power Installation and Construction JSC. The candidate site is Cai Be. The generated power will be sold
to the grid. The investment cost is 1,860 $US/kW (inclusive of bank loans for two years’ construction)
with the majority of equipment to be imported from Europe. A feasibility study was completed in 2007.
However, the project has been delayed due to problems with land rental, PPA, husk purchase contracts
and the recent rises in bank loan interest rates. The project is expecting a similar treatment in power
purchase price to wind power.

■

The 10-MW husk-burning power plant in Can Tho. A feasibility study was conducted by the Dutch
company TOPEC BV in 2007. The selection of investors is underway. The project is unlikely to start
before 2011 for in the initial negotiations after the feasibility study, the bid price for power was offered
at as low as 5 UScent/kWh by the EVN. Like the husk-burning power project by the Tan Hiep Phuc
Power Installation and Construction Company, this project is pinning hope on special treatment in
buying its power at a price higher than 5 UScent/kWh.

■

The 10-MW husk-burning power plant by HCMC-based Duy Phat Power JSC in Đồng Tháp. This
project is still under study.

■

The 6-MW husk-burning power plant at the Ba Sao industrial park in Cao Lanh, Dong Thap. Formed in
2009 by the Korea Power Consulting Company, this plant is designed to burn husk to generate power,
using the FBC technology with one boiler, one turbine and one generator. The selection of the project
investor is underway. This project is also unlikely to start before 2011 for the same reasons above.

■

There are 5 – 6 husk-burning power plants each of 10 MW in An Giang, Kien Giang, Hau Giang and
Long An now in the process of site selection and application for licensing from respective local
authorities. However, no progress has been seen. A possible cause is the absence of a pricing system for
biomass power. If the Time-of-Use price table for small hydropower plants applies to biomass-based
power plants, it is discouraging to investors. Worse still, the high loan interest rates of over 20%, even
30% a year, make these projects hardly viable.


20

Table 2-5. Summarized information on husk-fuelled power plants
No

Project

Capacity

Expected
technology

Investor or investment report
maker

Status

Fluidized Bed
Combustion
(FBC)

Dinh Hai
Thermal Power JSC Address:
Lot 2.9A5, Road 10, Tra Noc 2
IP, Can Tho
Tel: 0710 3744 295 # Fax:
0710.3744 296 – Tax code :
1800 646 683
Email: cogen@dinhhai.com Website: www.dinhhai.com

Expected to expand
capacity to 15-20MW
on bank loans

Investment Report
completed on Dec
21st, 2009

1

Husk-burning heat and
power cogeneration
plant in Can Tho

2

Husk-burning heat and
power cogeneration
plant in Can Tho

10MW

FBC

J-Power (Electricity Power
Development Co., Ltd and
Chubu Electric Power Company
Inc

3

10-MW husk-burning
power plant in Can
Tho

10

FBC

TOPEC BV, the Netherlands

NA

4

Husk-burning power
plant in Cai Lay, Tien
Giang

10

FBC

HCMC-based Duy Phat Power
JSC

Investment Report
completed in Jan
2009

10

FBC

HCMC-based Duy Phát Power
JSC

6

FBC

Korea Power Corporation
(KEPCO)

5

6

Husk-burning power
plant in Cai Be, Tien
Giang
Husk-burning power
plant at the Ba Sao IP,
Cao Lanh, Dong Thap

9MW (3
phases)

Investment Report
completed in Nov
2010
Investment Report
completed in Jan
2009

7

Proposed husk-burning
power plant in Cho
Gao, An Giang

10

FBC

NA

8

Husk-burning power
plant in Kien Giang

10

FBC

NA

9

Husk-burning power
plant in Long An

10

FBC

NA

NA

10

Husk-burning power
plant in An Giang

NA

In the process of
applying for
permission to invest

Note: NA, not available

10

FBC

In the process of
making an investment
report
In the process of
applying for
permission to invest


21

iii) Energy cogeneration
Bagasse from sugar mills and black liquor from paper production are the key biomass feedstock for
energy cogeneration plants. There are now 39 energy cogeneration plants (38 sugar mills and 1 paper
mill) with the total installed capacity of 150MWe. Their capacity ranges from 1.5 to 24 Mwe. The power
and steam generated from these plants is used to feed these very plants. The majority of energy produced
is used to crush sugarcane and refine sugar.
There are only 3 plants selling their redundant power to the national grid at the price of 4-5
UScents/kWh. Other plants are keen to sell their power on their expansion. However, the bid price for
their power is discouraging. To make the matter worse, the vast majority of these plants are using the
outdated technology, hence low efficiency. Renewing technology and improving capacity now top their
concerns.
In May 2011, the Vietnam Sugarcane and Sugar Association sent an official letter to the Government,
MOIT and Ministry of Agriculture and Rural Development, asking that there be policy to buy power
from the expanding sugar mills to take advantage of bagasse, and sugarcane leaves and buds, which are
being wasted. The amount the association asks to be purchased is nearly 2000MW. Following is an
illustration of a failing energy cogeneration project, which comprises an FBC boiler of 2.5 tons/h, a
turbine-generator of 50 kW, a heat exchanger and 3 rice driers, and was commissioned in Long An in
1999 but has ceased to operate for not being viable.

Figure 2-2. The husk-burning combined heat and power project
demonstrated in Long An province
Some sugar mills in the provinces of Phu Yen and Thanh Hoa are working against the clock to invest in
expanding their bagasse-burning factories. Some key details are as follows:
•

A 16-MW bagasse-burning combined heat and power factory in Phu Yen. The investor is KCP
Vietnam Industries (India), which is owning KCP Phu Yen sugar mill. Its investment report was
completed in 2009. The expected power output for sale is 65,840 MWh/year. The energy
equipment is to be imported from India.


•

22

A 12.5-MW bagasse-burning combined heat and power factory expansion in Thanh Hóa. In
August 2011, the investor – the Lam Son Sugarcane and Sugar JSC applied to the MOIT to
expand its combined heat and power factory by 12.5MW. The expansion includes a boiler with the
steam capacity of 80 tons/h and turbine-generator of 12.5 MW. The expected power output for sale
is 81,900 MWh/year. The proposed offer price is 916 VND/kWh.

The following is brief information on bagasse-burning combined heat and power factories at sugar mills.
Table 2-6. Brief information on bagasse-based heat and power
cogeneration factories at sugar mills33

No

Factory/Plant

Capacity

Pho Phong sugar mill
in Quảng Ngãi
Nagarjuna sugar mill
in Long An
Vietnam – Taiwan
sugar mill in Thanh
Hoa
Son Duong sugar mill
in Tuyen Quang

1500 tons of
sugarcane/day
3500 tons of
sugarcane/day

5

To Hieu sugar mill in
Son La

6

Hoa Binh sugar mill

7

Binh Dinh sugar mill

8

Bourbon sugar mill in
Gia Lai

9

Kon Tum sugar mill

10

Dac Nong sugar mill

11

Binh Thuan sugar mill

1
2
3
4

Origin of
equipment
China
India

6000 tons of
sugarcane/day

Taiwan and
Australia

1000 tons of
sugarcane/day

China

1000 tons of
sugarcane/day

China

700 tons of
sugarcane/day
1500 tons of
sugarcane/day
1000 tons of
sugarcane/day
1000 tons of
sugarcane/day
1000 tons of
sugarcane/day
1000 tons of
sugarcane/day

China
China
China
China
China
China

Output
Heat and power for self
consumption by the plant
Having sold power to the
grid at the price of 4
UScent/kWh

33
Sources from the Vietnam Sugarcane and Sugar Association say that all the listed sugar mills are keen to sell their redundant
power to the grid from their expanded production processes (Official Letter 529/HHMĐ addressed to the Prime Minister, MOIT and MARD to
request purchase of 1950 MW of bagasse-based power)


No

Factory/Plant

Capacity

Origin of
equipment

12

Tri An sugar mill in
Dong Nai

1000 tons of
sugarcane/day

China

13

Bourbon sugar mill in
Tay Ninh

8000 tons of
sugarcane/day

France

14

Cao Bang sugar mill

15

Quảng Nam sugar mill

16
17

Tay Ninh raw sugar
mill
Vi Thanh sugar mill in
Hau Giang

18

Soc Trang sugar mill

19

Kien Giang sugar mill

20

Tra Vinh sugar mill

21

Quang Binh sugar mill

22

Nghe An-Tate&Lyle
sugar mill in Nghe An

23

Ben Tre sugar mill

24

Phung Hiep sugar mill

25
26
27
28
29

KCP sugar mill in Phu
Yen
Thoi Binh sugar mill in
Ca Mau
Cam Ranh sugar mill
in Khanh Hoa
Nong Cong sugar mill
in Thanh Hoa
An Khe sugar mill in
Gia Lai

700 tons of
sugarcane/day
1000 tons of
sugarcane/day
2500 tons of
sugarcane/day
1500 tons of
sugarcane/day
1500 tons of
sugarcane/day
1000 tons of
sugarcane/day
1500 tons of
sugarcane/day
2000 tons of
sugarcane/day
6000 tons of
sugarcane/day
2000 tons of
sugarcane/day
1250 tons of
sugarcane/day
4000 tons of
sugarcane/day
1000 tons of
sugarcane/day
6000 tons of
sugarcane/day
1500 tons of
sugarcane/day
2000 tons of
sugarcane/day

China
Australia
Australia
China
China
China
China
China
The UK
China
India
India
Australia
The US
Poland and India
China

23

Output
grid at the price of 4.5
UScent/kWh
Working on the project to
sell 16MW to the grid


No

Factory/Plant

Capacity

Quang Phu sugar mill
in Quang Ngai
Song Con sugar mill in
Nghệ An
Lam Son sugar mill in
Thanh Hoa
333 sugar mill in Dac
Lac
Tuy Hoa sugar mill in
Phu Yen
Ninh Hoa sugar mill in
Khanh Hoa
Tuyen Quang sugar
mill in Tuyen Quang

2500 tons of
sugarcane/day
1250 tons of
sugarcane/day
6000 tons of
sugarcane/day
500 tons of
sugarcane/day
1250 tons of
sugarcane/day
1250 tons of
sugarcane/day
700 tons of
sugarcane/day

37

La Nga sugar mill in
Dong Nai

2000 tons of
sugarcane/day

38

Hiep Hoa sugar mill in
Long An

39

Bai Bang paper mill

2000 tons of
sugarcane/day
Black liquor
boiler

30
31
32
33
34
35
36

Origin of
equipment
France
China
France and Japan
China
India
China
China
Denmark
France
France

24

Output
Still working on the
project to sell 12.5MW
grid at the price of 4
UScent/kWh

Biomass gasification: In Vietnam, biomass gasification came into the spotlight in the early 1980s when
there were shortages of petroleum and power at that time. Gas compounds from wood liquefaction were
then used for buses. The rice husk gasification combined with power generation developed in the South
in 1980s with 15 systems of 75 MW in total installed in the Mekong Delta and HCMC. However, this
technology was then neglected on the improvements in petroleum and power supply and the use of rice
for other purposes such as the firing of brick and pottery kilns) that has brought in higher economic
benefits. The Post Harvest Institute has designed and manufactured some rice husk gasification facilities
on a trial basis. The gas compounds from these facilities are used to feed rice driers. Generally, biomass
gasification remains strange to Vietnam and Vietnam has little experience in this respect.

iv) Biomass pelletising/briquetting
The briquetting/pelletising of biomass such as rice husk and sawdust, though helping solve the low
relative-density problem, has so far attracted little attention. In Vietnam, biomass is briquetted for limited
uses, mainly heat generation (cooking) in the family. Efforts are being made in the field of research and
development to make biomass briquettes more viable and popular among users.


25

The Institute of Energy has pioneered to introduce the advanced briquetting technology into Vietnam34.
Under a renewable energy project funded by the SIDA and the Bangkok-based Asian Institute of
Technology (AIT), the institute has imported from Thailand a fuel briquetter to try on the domestic
feedstock of rice husks, sawdust, coffee bean shells and bagasse). After that, it recognized the need to
improve this screw-model briquetter and offered some improved versions of it. Research was made to
lengthen the longevity of the screws. The improved version was then demonstrated at different places
nationwide for widespread promotion to people. Training was also provided to business and technicians.
Accompanying the briquetter, the institute and AIT also promoted stoves specifically designed to burn
briquettes. A small investigation conducted by the institute shows that in some Mekong Delta provinces
such as Tien Giang and Can Tho, private sector businesses have embraced this rice-husk briquetter, each
installing 1-2 units. Some install up to 10 units. The pressing capacity is 70-100kg of rice husks/h. The
investment cost for a briquette ranges from 35-40 million VND. Briquette products are sold locally at
800-1000 VND/kg for small businesses that make cakes, rice noodles or confectionary or for families for
cooking. There are reports that some traders have started to collect these briquettes for export to Japan or
South Korea. Still, production scale remains small and domestically made briquetters often break down,
interrupting the briquetting process.

Figure 2-3. A biomass briquetter in Tien Giang (photo by N.D.Cuong)

2.3.2

Potential and uses of biomass for energy production (heat only, power only or combined heat
and power at industrial scale in Vietnam)

In Vietnam, the amount of rice husks produced from rice processing is about 8 million tons annually.
There is about 40 million tons of rice straw annually, of which only 3 million tons is utilized. A survey
conducted by the Institute of Research and Development in the Mekong Delta at 108 rice mills (selected

34
Activities and Achievements of a Biomass Briquetting Project in Vietnam. Pham Khanh Toan, Nguyen Duc Cuong, and M. Augustus Leon.
Downloadable at: http://www.retsasia.ait.ac.th/Publications/WRERC%202005/IE%20paper-final.pdf


26

at random) in the provinces of Can Tho, An Giang, Kien Giang, Hau Giang and Soc Trang shows that
about 50% of the rice husks produced by rice mills is sold as residential fuel or fertilizer. The offer price
ranges from 50-300 VND/kg, depending on the area and time of the year. These mills have large
redundant amounts of rice husks, which total 232,000 tons/year. The redundancy concentrates in the
peak months of harvest (from February to July) at small and medium mills. The harvestable amount of
rice husks for power generation in the Mekong Delta can reach 2 million tons each year in the period to
2015 and 4 million tons to 2020. In the large rice producing provinces of An Giang, Dong Thap, Tien
Giang, Long An, Kien Giang and Can Tho, if an average rice-husk burning power plant run by a rice mill
to make use of its residual rice husks consumes between 65,000 -80,000 tons of husks to generate 10
MW a year, it is possible to build 100 such plants with the capacity ranging from 500 KW to 20 MW.
The use of rice husks for power generation is also helpful to reducing pollution caused by its dumping
into rivers and canals.
The Dinh Hai Power JSC, the first rice husk-burning thermal power plant to run in Vietnam, reports that
there are about 10 projects like it in the Mekong Delta now. However, some causes such as low bid price
and high loan interest have hindered them from starting.
Sharing the same problems faced by rice mills, sugar mills are also discouraged from running bagassefuelled power plants (including boilers, turbines and generators). On April 8th, 2011, the Vietnam
Sugarcane and Sugar Association sent Official Dispatch No. 529/HHMD to the Prime Minister, MOIT
and MARD to ask for the financing of 1950 MW to be generated from sugarcane residues.
In light of the country’s ever rising demand for energy, limited reserves of energy sources (coal imports
expected after 2015) and great prospects of biomass supply, it is highly feasible technologically,
economically and environmentally to use the available biomass supply for power-only generation and
combined heat and power cogeneration. Prime Minister Decision 1208 to approve the general plan for
power development in the period 2011-2020 with a vision 2030 (General Plan 7) serves as the legal
framework for biomass development in Vietnam. The decision on biomass development sets the specific
targets of:
■
■

generating 500 MW of biomass power by 2020;
generating 2,000 MW of biomass power by 2030 (annual growth of 100MW).


27

The following is an illustrative figure of development of renewables in general and biomass in particular
in Vietnam in the period 2011-2030.
16000

Biogas
Solar (PV)

14000
12000

MW

10000

Geothermal pow er
MSW
SHP
Biomass (solid)

8000

Wind Pow er

6000
4000
2000

20
29

20
27

20
25

20
23

20
21

20
19

20
17

20
15

20
13

20
11

0

Figure 2-4. Biomass-based power development plan of Vietnam
The potential biomass thermal power plants in Vietnam in the coming period will be rice husk, bagasse,
coffee bean shell, wood waste and rice straw-based. The more viable economically and environmentally
are bagasse, rice husk and wood waste-based projects.

2.4 A number of information on the current situation of cooperation projects
between Vietnam and international biomass organizations
In spite of being considered as one of the countries with significant potential of biomass energy (being
the world leading rice exporter, the world second largest coffee exporter, leading exporter in other
products such as cashew, coconut and wooden products, etc), the exploitation of available biomass
sources to provide fuel of medium and large energy production projects is insignificant (compared to
Thailand, Malaysia, etc). The reason is probably that Vietnam is still a major coal exporter, the price of
domestic fossil fuel is still subsidized (the domestic price of coal used for electricity production is only
35-40% the price of imported coal). Low electricity price (average electricity selling price from EVN to
clients is only approximately US$ 6.2 cent/kWh) limited the opportunities for purchasing electricity from
renewable energy projects in general and biomass projects in particular (as analyzed and mentioned
above). In this context, so far there have not been many cooperation projects between Vietnam and
international biomass organizations. The following table summarizes a number of cooperation projects in
the biomass field in Vietnam to date.


28

Table 2-7. Overview of information on cooperation projects between
Vietnam and International organizations
Project name

“Multi benefit solution
to minimize climate
change in Vietnam and
South East Asian
nations by development
of biomass energy”.
Project duration: 5 years
since October 2011 to
2016

Greater Mekong
Subregion (GMS)
technical support
project for increasing
the usage of biomass
waste sources
since December 2011 to
Dec 2015

Feasibility study on
energy production for
Phu Quoc island district
by biogas technology
and biomass power
plant

Three phases of
COGEN programme

Project objectives

To develop a transcendent
biomass energy process in
both economic and
environmental factors
(planting trees for fuel –
production – consumption)
and aiming toward
promotion of worldwide
usage of this process.

Project parties

Japan International
Cooperation Agency
(JICA) and Vietnam
National University

Scope and contents

Japan contributes 5 million USD for
the project. The project shall be
carried out in 5 years (from October
2011 to 2016) with the contents such
as: Planting trees for oil (Jatropha)
and other plants on fallow and
polluted areas; development of green
technology in order to produce
biological diesel

ADB contributes US$ 4 million from
Nordic Development Fund (NDF),
the remaining US$ 600.000 is
contributing fund from Cambodia,
Laos and Vietnam Governments.
Preparation for implementation of the
project is carried out with items on
sustainable biomass exploitation and
usage

Increase the rate of
biomass waste usage in
agriculture in order to meet
the increasing demand for
clean energy and food
security for poor
households in rural areas.

The project is funded
by Asian Development
Bank (ADB) with US$
4 million. Partners: 3
countries including
Cambodia, Laos,
Vietnam

Preparation of a feasibility
study on establishment of a
biomass power plant and
development of the
technology for dry
composition of residential
waste used for electricity
production

Project is funded by
EC-ASEAN Facilities.
Partners: Can Tho
University, Institution
of Energy and a
German agency

Carried out in 2004 – 2005. Contents:
Preparation of a feasibility study
report on biomass power plant and
the technology for dry composition
of residential waste used for
electricity production in Phu Quoc

To promote the
implementation of projects
on Cogeneration–
Combined Heat and Power
technology in South East

COGEN programme is
initiated and funded by
the European
Commission and
ASEAN. The project is

Cogen 1: 1991-1994: including all
kinds of fuel
Cogen 2: 1995-1998, including all
kinds of fuel
Cogen 3: 2000-2004, only focusing


Project name

29

Project objectives

Project parties

Scope and contents

Asian nations

coordinated in South
East Asia by Asian
Institute of Technology
AIT located in
Bangkok, Thailand and
the Research Center for
Energy and
Environment is the
partner carrying out
Cogen 3 in Vietnam.

on biomass

To study, select and
popularize the improved
biomass compression
system and cooking stoves
using torrefyer biomass
pellets in Vietnam

Funded by SIDA –
Sweden, Coordinated
by Asian Institute of
Technology AIT –
Bangkok. Partner:
Vietnam: Institute of
Energy

Funding: approximately US$ 150000.
Contents:
- Importing compressing machine;
- Testing compressing machine
- Improving compressing machine
according to Vietnam conditions
- Designing forms of cooking stoves
using high-productivity torrefyer
biomass
pellets
- Popularizing the technology

“Studying the supply
chain of biomass fuel to
power plants and
industrial boilers in
Vietnam” project
from 2011 to 2012

Developing and
establishing stable biomass
supply chain (from sellers,
transporters, purchasers)
for power plants and
industrial boilers in
Vietnam

Funded by the Ministry
for Foreign Affairs of
Finland and Nordic
Development Fund.
Partners: coordinated
by Vietnam Institute of
Energy, participated by
Technical Research
Centre VTT of Finland

Carried out in 2 years 2011 – 2012.
Contents include:
- Evaluating the current situation on
biomass supply chain
- Proposing sample researches
- Presenting sample researches for 2
factories
- Popularizing the results

Small biomass projects
such as improved
biomass cooking stoves,
survey on biomass
energy usage of
residential households,
survey on types of fire
wood, etc carried out
before 2000

Promoting effective usage
of biomass and
environmental protection
in household rural areas
and small-scale home craft

World Bank, Food and
Agriculture
Organization of the
United Nations (FAO),
and a number of other
organizations

Key contents:
- Studying the real situation (samples
used, firing technology, supply
sources, biomass prices)
- Popularizing biomass equipment –
high productivity cooking stoves
replacing traditional stoves

“Study and presentation
of improved biomass
compression system”
project within the scope
of regional study on
renewable energy
technologies in Asia
since 1997 to 2003


30

2.5 Economical nature of biomass projects
Any project, such as building a power plant or co-generator for biomass burning, must be feasible in
economic factor in order for investment to be carried out. Therefore it is vital to develop and analyze
information on costs (including investment costs and costs for operation and maintenance) and revenues
for such a project. The below are preliminary analysis on the economical nature of biomass projects in
Vietnam. It should be noted that information on costs and revenue mentioned hereinafter is for reference
purposes when review for investment decisions only. Exact information can only be obtained based on
practical data such as suppliers, construction costs, biomass resource prices, selling price for thermal and
rice husk, etc in the field.
2.5.1

Investment costs

Investment costs for the Project (capital cost or initial cost) including equipment cost, cost for
installation, project development and management costs, and other costs.
Equipment costs: include cost for purchasing equipment, including cost for transporting such equipment
to the project site. These costs depend on components of the power plant system, their technical
characteristics as well as quality and productivity of the equipment.
Costs for construction and equipment installation: include land rental, costs for land clearance,
human resources, equipment installation, etc
Project development and management costs: include costs for preparing of feasibility study, costs for
technical design and construction design, costs for construction management, costs for environmental
impact assessment and application of permits, services fees for construction supervision and
examination, training costs, regulatory fees.
Other costs: include taxes, insurances during the construction period, costs related to funding
arrangement (for example, interests during the constructions period, banking fees, and insurance for
loans).
As discussed above, investment costs of a power generation or power-thermal co-generation project from
biomass will depend on many factors that are typical for each kind of projects such as scale, location,
type of biomass, form of transport, etc. The generalized costs below may not be used for a particular
project, but can be used for preliminary estimation. For this purpose, the above data on investment costs
are summarized based on reports from a number of projects to be carried out in Vietnam.
Table 2.8 illustrates investment unit costs of power generation or power-thermal generation plants
burning bagasse and rice husk in Vietnam. These costs exclude taxes and insurances during the
construction period and the costs for funding arrangement.


31

Table 2-8. Investment unit costs of biomass burning power plant (USD/kW)
Type of biomass/Capacity

Only generating
power

Power-thermal
generating

1-5 MW

-

1,600 – 1,800

5-15 MW

-

1,300 – 1,600

15-30 MW

-

1,200 – 1,300

1-5 MW

1,800 – 2,000

2,000 – 2,200

5-15 MW

1,600 – 1,800

1,800 – 2,000

15-30 MW

1,400 – 1,600

1,600 – 1,800

Bagasse

Rice husk

Source: Institute of Energy, 2010, report on comprehensive planning of renewable energy for
Vietnam, 2011-2020 period, with a vision to 2030, “schedules volume”

With regard to small-scale steam turbine power plant burning biomass (1-5 MW), equipment costs often
account for 75-80% total cost of investment. Installation costs account for 15-20% and the remaining 5%
is project development and management.
With regard to major project (> 5 MW), equipment costs make up 70-75%, installation costs account for
20-25%, and project development and management costs account for 5%.

2.5.2

Operation & maintenance costs

Operation & maintenance costs (O&M): include fixed costs and variable costs. Fixed costs (like workers
salary, land or premises rental, depreciation, loan interest, etc) are costs payable regardless of the fact
that the power plant operates or not. Variable costs (including costs for fuel, materials for manufacturing)
will depend on operating additional charge and operating schedule of the power plant.
Fuel costs: are the costs making up largest part in operation costs, of approximately 70-80%, except in
the case where fuel is secondary results from production or made from waste (bagasse in sugar factories).
The particular prices of fuel or agreement between investors of biomass power project and fuel suppliers
must be taken into consideration when calculating the fuel costs. The fuel costs may be calculated by


32

multiplying investment unit cost (kg/kWh or m3/kWh) with opportunity costs 35of biomass fuel (VND/kg
or VND/m3). Table 2.9 illustrates fuel consumption rate and opportunity costs of biomass fuel with
regard to power generating technologies and various types of biomass.
Table 2-9. Fuel consumption rate and its opportunity cost
Bagasse
Opportunity cost, VND/kg (or m3)

Rice
husk

0

200-450

-

1,2-1,8

2,5-3,036

1,8-2,537

Fuel consumption rate, kg /kWh
Steam turbine power plant
Steam turbine power-thermal generating plant (> 35 bar)

Source: Institute of Energy, 2010, report on comprehensive planning of renewable energy for Vietnam, 2011-2020
period, with a vision to 2030, “schedules volume”

Not counting fuel cost, O&M costs of a biomass power plant often account for 2-5% total investment
costs. However, due to the annual increase in costs for equipment maintenance and repair, O&M costs in
the last years of the project’s life will be higher than those in the beginning of the project. Usually, it is
assumed that O&M costs are equal to 3% of total investment costs during the first to fifth year of
operation, 3.5% during the sixth to tenth year and 4% from the eleventh year onward.
2.5.3

Revenue of biomass power project

Annual revenue from operating biomass power project includes (i) selling electricity, (ii) selling
thermal/steam (in case of power-thermal co-generation), (iii) selling ash (in case of burning rice husk),
and (i) selling certified emission reduction.

35
Opportunity cost: if biomass is not used it must be burnt out (in the field or on the street) or throw to the river. Consequently, there will be a
negative impact to the society (environmental, health and other social impacts). Furthermore, the replacement of biomass for fossil fuel should
be taken into consideration (for example import price of coal is 30-40% higher the the local price)
36
This is the volume of bagasse consumed in order to meet the demand of power from sugar factory and generating 1kWh of electricity
37
These data cannot be determined as they are largely subject to power-thermal ratio which varies for each particular project.


33

(i) Revenue from selling electricity
Revenue from selling electricity depends on the amount of electricity sold to grid and electricity price.
Avoided cost tariff issued annually by the Ministry of Industry and Trade can be used as reference for
calculation of revenue from selling electricity. However this price level can only be applicable to small
hydropower projects. Biomass power tariff is being proposed to develop in the form of feed-in tariff.
The amount of electricity sold to grid depends on the rate of auxiliary electricity and the operating time
of biomass power plant. Table 2.10 illustrates the typical elements of operating time, auxiliary electricity
rate and amount of electricity sold to grid of various power plants and power-thermal generating plants in
Vietnam.
Table 2-10. Operating time, auxiliary electricity rate and electricity
amount sold
Operating time (hour/year)
Biomass
type

Installed
capacity
(MW)

Rainy season

Dry season

Total

(July to
October)

1

4,000

5

Auxiliary electricity (%)

360

3.640

-

15

4,000

360

3.640

-

12

4,000

360

3.640

-

10

15

4,000

360

3.640

-

7

20

4,000

360

3.640

-

6

30

4,000

360

3.640

-

5

1

4,800

1.920

2.880

12

15

5

4,800

1.920

2.880

10

12

10

4,800

1.920

2.880

8

10

15

4,800

1.920

2.880

5

7

20

4,800

1.920

2.880

4

6

30

Rice husk

Thermalpower cogenerating

10

Bagasse

(November
to June)

Only
generating
power

4,800

1.920

2.880

4

5

Source: Institute of Energy, 2010, report on comprehensive planning of renewable energy for Vietnam,
2011-2020 period, with a vision to 2030, “schedules volume”


34

(ii) Revenue from selling thermal/steam
The thermal-power co-generating plants selling thermal/steam to nearby plants (for example plants in the
same industrial zone) can earn a considerable amount from these transactions. However, in Vietnam, this
option still faces with many difficulties due to the fact that the customers are still worried about the
credibility of such thermal/steam provision from the thermal-power co-generating plants.
In case the sale of thermal/steam can be carried out, its price will be determined by negotiation between
thermal-power co-generating plant investors and customers.
At present there is an entity which installed rice husk burning boiler with steam generating capacity of 20
tons/hour and is currently selling steam to consumers in Tra Noc industrial zone, Can Tho for a price of
approximately VND 600,000/a ton of steam.
(iii) Revenue from selling ash
In case of burning rice husk in modern power plants, shapeless ashes with a small extra level of carbon
may be created. Depending on the quality of rice husk ashes, it can be used in production of steel,
building materials, fertilizer, refractory materials, moulds, transistors, rubber and oil recycling industry.
Geography-wise, countries with highest demand for use of rice husk ashes are Japan, North America,
Northern Europe, South Korea, China, Taiwan, Australia, etc
The amount of rice husk ashes depends on the content of ashes in rice husk. According to analysis, the
ashes account for 18-22% rice husk amount (20% in average). The quality of ashes depends a great deal
on rice husk burning conditions, meaning depending on the technology of the rice husk burning boiler.
In Vietnam the market for rice husk ashes has been established with the selling price at approximately
VND 200/kg. The selling price for rice husk ashes in the international market is currently from USD
20/ton to USD 100/ton, depending on quality of ashes. It should be noted that there is an increasing trend
in the selling price for rice husk ashes, with a possibility of such price going up to USD 200-400/ton in
the future.
(iv) Revenue from selling greenhouse emission reduction certificate
Vietnam is a developing country, not in Appendix I (in the KYOTO Protocol) and a country which
signed and ratified this Protocol, so the greenhouse emission reduction projects can apply for CDM.


35

Greenhouse gas emission coefficient of Vietnam grid is 0.574kg CO2/kWh38. If all the biomass power
plants sold electricity to national grid, and the price of a ton of CO2 was USD 15 then the revenue gained
from selling greenhouse emission reduction certificate will be US cent 1/kWh. In addition to this amount
of the greenhouse gas emission (replacing an amount of electricity with renewable energy), the biomass
projects can be accounted for an additional amount of CH4 emission reduction from the dispersal of such
gas due to lack of usage. The revenue from this option accounts for 20-25% revenue from CO2 emission
reduction.
Summary on the economic nature of the biomass projects in Vietnam:
■

■
■

■

38

As mentioned above, most biomass projects in Vietnam have and are being established of small
scale (1-30MW) due to: a) the nature of biomass with its small density (kg/m3) so far-distance
transport is not economical, b) The supplying sources for biomass are dispersal (which limits
collecting with huge amount).
Investment into small-scale projects often requires cost 1.1 – 1.5 times higher than large-scale
projects. This issue also has certain impact on investors’ perspective.
Besides, the biggest concern of investors in biomass projects is the capacity of stable supply of
raw biomass to power plants (in terms of quantity and price) and more importantly, the selling
price of biomass products such as thermal and electricity. In the current circumstance, the
projects of thermal-power co-generating from bagasse burning is economically feasible. There
are currently 2 sugar factories expanding their capacity namely KCP, Phu Yen and Lam Son
Sugar, Thanh Hoa, whose electricity price offered to EVN is only about US cent 5/kWh. The
reason for such a low price is because in these factories there are available premises and
supporting equipment such as supplying sources of electricity, water and bagasse – which is
considered as waste of the factories. More than 30 existing sugar factories wish to expand their
power generating capacity. The only shortcomings for them are capital, loan interests and current
complicated procedures to access capital resources as well as the electricity price mechanism not
yet encouraging biomass power.
With regard to projects of rice husk electricity and other types of biomass wastes, because of the
requirement for collection and transport, biomass price, type of biomass, transporting distance
and transporting vehicle are one of the two key factors having significant impact on investment
decision. The second factor is selling price of electricity. The current selling price is only
UScent5 – 5.5/kWh which is not economically feasible. Preliminary calculation indicates that, in
case of a rice husk power project with a capacity of 10MW, stable rice husk price of VND
400/kg (to the factory), operating time of more than 6,000 hours/year, the electricity price
acceptable to investors must be more than US cent 6/kWh. For straw burning power projects, the
electricity price must be above US cent 9/kWh to be feasible for investors.

Nguyen Duc Cuong, 2009, Calculating the greenhouse emission coefficient for Vietnam’s DNA for application announcement


36

2.6 The actual state of biomass energy technologies in Vietnam (lists of domestic
and overseas technology suppliers)
As mentioned in section 2.2 of this report, there are currently 4 main types of technology being applied
in Vietnam, which are:
■
■
■
■

Burning biomass for electricity production to dry agricultural products (mostly at wood
processing factories)
Burning biomass for energy co-generating (mostly at sugar or paper factories)
Burning biomass for electricity production (scheduled for construction or being carried out)
Biomass compressing machines (briquettes or pellets)

Although there is no official list made on types of biomass technologies as well as biomass technology
suppliers, the following list of technology and equipment suppliers separated by the types of technology
is compiled from reports, workshops and available information from the Institute of Energy:

Table 2-11. List of biomass technology and equipment suppliers
Type of technology,
equipment

Domestic

Overseas

1. Burning biomass in thermal production for drying
- Boilers burning
- Vietnam Boiler
NA
wooden waste at
Joint-Stock Company
wood processing
- Dong Anh Pressure
factories
Equipment Company
- Bach Khoa Hanoi
Boiler Joint-Stock
Company
- Rice husk burning
boiler
Wuxi Company,
Huaguang, China

Note

Most of the boilers
domestically
manufactured have
low boiler parameter
(pressure temperature)
and small capacity


Type of technology,
equipment

Domestic

Overseas

37

Note

2. Biomass burning for energy co-generating (electricity and thermal), with a total capacity of
150MW, installed at 39 factories, including 38 sugar factories and 1 paper factory
- Bagasse, wooden
No supplier
100% imported from
Capacity of
waste burning boiler
countries such as
approximately 20 – 70
China, France, India,
tons of steam per
Japan
hour, pressure of 20 –
40 bar, temperature of
350 – 500oC
- Turbine
No supplier
100% imported from
Mostly back-pressure
China, France, India,
turbine with capacity
Japan
of 1 to 20MW
3. Biomass burning for electricity production (no factory at present)
Boiler
At the moment
Scheduled to import
The need to develop
Vietnam has not yet
100% from developed biomass power in
manufactured any
countries and some
accordance with
high-capacity boiler
other countries such
Decision No. 1208 of
for electricity
as China, India
the Prime Minister
production
approving the power
master plan 7:
Turbine
At the moment
Scheduled to import
Vietnam has not yet
100% from developed - Up to 2020,
developing 500MW
been able to
countries and some
of biomass power
manufacture
other countries such
- To 2030, developing
as China, India
2000MW of biomass
power


Type of technology,
equipment

Domestic

4. Gasification of Biomass (NA)
5. Biomass compressing (briquettes/pellets)
Biomass Briquette
Vietnam medium size
Machine
mechanical factories
are capable of
manufacturing this
type of machine
(designs from Taiwan,
Japan and the Institute
of Energy)
Biomass Pellet
Machine

38

Overseas

Note

Some entities in
Mekong Delta
imported
approximately 10
machines from China
and Japan

- Type of machine:
worm
- Compressing
capacity:
approximately 70100kg/hour
- Electrical engine
power: 11KW
Type of machine: reel
- Compressing
capacity: 250-400
kg/hour
- Electrical engine
power: 20-35kW

Note: NA: not available

Source: Research team –Institute of Energy, 2011

Figure 2-5. Wood drying boiler of Vietnam Boiler Joint-Stock
Company installed in Hanoi


39

2.7 Transportation of biomass, raw biomass price and transport cost in Vietnam
The below are general diagram describing the path of biomass from manufactory to consumers’ place.

Rice/sugarcan
e

Milling
factory/sugar
mill

Raw biomass
(rice husk)

Raw biomass
(bagasse)

Thermal-electricity
co-generating
plant

Transport by boat

Power plant

Thermal – electricity
Or both

Ashes
Figure 2-6. Diagram of transportation of biomass
Description of the supply and transport procedure of rice husk to Dinh Ha thermal power plant in
Can Tho:
Dinh Hai thermal power company is the first company investing and installing the first industrial-scale
rice husk burning boiler in Mekong delta region, Vietnam. The steam produced from factory of Dinh Hai
Company is currently being supplied to 8 processing companies in Tra Noc industrial zone, Can Tho.
The pipeline system’s length is approximately 5km. The parameters of the boiler are as follows: steam
output 20 tons/hour, steam pressure 45 bars and superheat temperature is 4500C. The total rice husk
amount consumed annually is approximately 37 500 tons.
Rice husk is bought by the company from traders and carried to the power plant by boat with the
capacity of approximately 20 tons/one boat. The rice husk price at the plant (in October 2011) is VND
400/kg (calories of approximately 3000 kcal/kg rice husk) including the purchasing price for rice husk at
milling factories and costs of rice husk transport and loading and unloading. The below are images of
transporting rice husk by boat in interlacing rivers of Mekong Delta region.


Figure 2-7. Transporting rice husk to power plant from rice milling
factory (photo by N.D.Cuong)

40


41

2.8 Information on potential companies which may become partners of German
companies in the development of biomass energy in Vietnam
There are currently about 10 domestic investors considering the choices of location, capacity size in
order to develop rice husk burning thermal power plants in key provinces for rice growing of Mekong
Delta such as An Giang, Tien Giang, Dong Thap, Can Tho, etc
Beside rice husk, Vietnam Sugar and Sugarcane Association proposes to develop nearly 200MW
electricity from waste of sugarcane. Existing sugar mills are the basis for expanding and increasing
electrical power at these mills. Bagasse at sugar factories is currently not used or not used effectively.
Leaves and sugarcane tops are not exploited and used, jute is also considered a potential source of waste.
According to Vietnam Sugar and Sugarcane Association, sugar factories want to exercise self-control a
part of the power used for production but they are facing with obstacles with regard to capital due to the
fact that investment unit costs for initial equipment and machinery are significant, in which the most
expensive equipment is boiler and turbine + electric generator. The Association requested authorities for
prompt promulgation of supporting policies for this kind of energy, considering it as renewable energy
and permitting it to be generated to national grid system, subsidizing in order to achieve a stable price
ensuring effect during investment, especially for modern technology. In order to promote the strength of
this renewable energy source, the Government has recently promulgated the Official Dispatch No.
2553/VPCP – KTN assigning the Ministry of Industry and Trade to bring the power generated from
bagasse of sugar mills into the Strategy on Planning of Vietnam new and renewable energy development,
submitting for the Prime Minister’s approval.
In addition to rice husk and sugarcane trash, projects using waste in the course of their processing and
production like wood, coffee, cashew and coconut also have great potential for biomass technology
development thanks to the huge demand of energy of those processing establishments, the increasing
price of energy and waste available on the premises, etc.


42

The below are relevant information on potential investors who can cooperate in biomass power
development.
Table 2-12. Relevant information on potential investors who can
cooperate in biomass power development
No.

Company name

1

Tan Hiep Phuc Investment
Joint-Stock Company

105A, Nguyen Van Quy, Tan Thuan
Dong, District 7, Ho Chi Minh City.
Tel: 84-08-22131012

Dinh Hai Thermal Power
Joint-Stock Company

Dinh Hai Thermal Power Joint-Stock
Company
Address: Road 10, Tra Noc 2 Industrial
Zone, Can Tho City
Tel: 0710 3744 295
Email: cogen@dinhhai.com

Rice husk power of
30MW for 03 projects in
Can Tho

Duy Phat Power Joint-Stock Company
(Ho Chi Minh City)

Rice husk power of
approximately 20MW
for 02 projects in Lap
Vo district, Dong Thap,
Tien Giang

2

3

4

5

6

39

Duy Phat Thermal Power
Joint-Stock Company

Thermal power plant
burning rice husk with
capacity of 10 MW
Thermal power plant
capacity of 10 MW
Thermal power plant
capacity of 3 MW

Address

Dong Thanh – Song Hong Joint-Stock
Company
Environmental Investment and
Regeneration 1 Company
Mekong Delta Agricultural and Rural
Development Joint-Stock Company

Field
Rice husk power
project: 02 projects with
capacity of each is
10MW at Tan Phuoc
district, Tien Giang

10 MW located at An
Hoa industrial zone,
Cho Moi, An Giang
10 MW located at Vong
Dong, Thoai Son
district, An Giang
3MW, located at Tan
Trung industrial
cluster39. An Giang

Information available at:
http://socongthuong.angiang.gov.vn/wps/portal/!ut/p/c4/04_SB8K8xLLM9MSSzPy8xBz9CP0os3j3oBBLczdTEwN_XydzA0__MD8vd9dQQ_
8wc_2CbEdFAEj9B54!/?PC_7_GRT97F540O0E90IOVFU9M40F66_WCM_CONTEXT=/wps/wcm/connect/socongthuong/congthongtinsocon
gthuong/tintucsukien/antoancongnghiep/angianguudaidautuphattriencongnghiepnangluongmoi


No.

7

8

Company name

Address

43

Field

Thermal power plant
capacity of 11 MW

Vietnam China International Trade and
Investment Joint-Stock Company

Choosing location for
building a rice husk
power plant with
capacity of 11MW in
Kien Giang

Vietnam Sugar and
Sugarcane Association *

Vietnam Sugar and Sugarcane
Association, Chairman: Nguyen Thanh
Long, 172/3A Nguyen Tat Thanh,
Ward 13, District 4, Ho Chi Minh
Tel/Fax: 08.39432570

Sugarcane trash power

Note: (*): Vietnam Sugar and Sugarcane Association has 38 sugar factories and such sugar factories need for
capacity expansion, installing and expanding thermal power plants burning waste from sugarcane (official letter
529/HHMD to the Prime Minister, the Ministry of Agriculture & Rural Development petitioning related to
investment for development of 1950MW of power from sugarcane waste

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