1. Policies and regulatory framework promoting the
application of biomass and biogas for power
generation in Vietnam
27 June 2013

2. Contents
1.
Biomass and biogas resources and development
in Vietnam
2.
Law and regulatory framework
3.
Institutions and stakeholders
4.
Economic regulations and Financial incentives
5.
RE Standards
6.
Procedures for application for power
generation
7.
Future prospects

3. Biomass and biogas development in Vietnam
Biomass and biogas consumption : 14,710 ktoe (2010) for heat,
cooking, lighting…, account for 21.1% of total energy consumption
in Vietnam
For power generation : 150 MW from Biomass; and < 1 MW from
Biogas (21,500 MW total installed capacity in 2010 in Vietnam).
The GOV target:
• 2020 : 500 MW from biomass; no specific target for biogas generation
• 2030 : 2000 MW from biomass; no specific target for biogas generation
Most suitable biomass for power generation are:
• Bagasse; Rice husk; Wood; Rice straw
Solid biomass
• Rice husk & rice
straw
• Corn cob& maize
streak
• Coffee husk&
fiber and
• Bagasse, sugar
cane
• Peanut and bean
shells
• Elephant grass
• Cassava
• Energy crops
• Wood and wood
products
Liquid biomass
Biogas

4. Biomass and biogas resources summaries in Vietnam (source: NL agency)
Type
#Ha
Yield/ha
% of resource is
residue or waste
Theoretical
Availability (ton)
Bamboo
800,000 plus
600,000 mixed
forest
10-13 t/ha
50-70%
Around 7 million ton/year
Cassava
560.400
17t/ha
Stem is 30% of the cassava harvest
The peel: 3%
The cassava root: 40%(moisture 50%)
Waste water: 31%
Coconut
130.000
13t/ha
305 weight is husk, plus leaves and bark
it is 6.5 tons/ha of fuel wood
975 tons only husk+ 1.6 million
tons fuel wood+ 1 million tons pith
Coffee
500,000
1.8 ton/ha
15% of the dried cherry weight
135,000 tons
Corn
Cobb
1,125,000 ha
4.0 t/ha
20-50%
1,066,500 tons
Corn Stob
1,125,000 ha
4.0 t/ha
200%
9 million tons
Jatropha
> 2,000 ha
1-5 t/ha
Seed 30% oil; 70% cake
Seed: 780t-1,200t
oil: 1,820t-2,800t cake
Manure
-
±30,000 million
heads; manure
2kg/head
n.a
Almost 1
million ton
Rice husk
7,500,000 ha
5.32 t/ha
20%
8 million ton
Rice
straw
7,500,000 ha
5.32 t/ha
85% (on average)
23 million ton
Sugar
Cane
266,000ha
51.7 ton/ha
Top:30%, Leaves: 10%,
Bagasse: 9%, Fructose: 1.8%, Others:
1.2%
Top: 4,110,150 ton; Leaves:
1,370,050 ton; Fructose: 246,609
ton; Others: 164,406 ton
residues: 5 million
40% Logging, Saw-milling
11 million ton residues;
Wood
13 million ha
3 million tons of cassava stem

5. Price of some biomass products
Type
Rice husk
Bagasse (sugar cane)
Wood and its residues
Rice straw
Corn cob and stob
These prices are at local prices
VND/kg
100-500
0 – 250
400 – 600
400 – 600
0 – 250
$/t
4.7 – 24
0 – 12
18.8 – 28.2
18.8 – 28.2
0 – 12

6. Law and regulatory framework for RE power generation
Electricity Law was passed in 2005 and amended in 2012.
• Promote the exploitation and use of new and renewable energy sources to generate
electricity : Invest in power plants using new and renewable energy sources ; Encourage
organizations and individuals to invest in grid or building power stations using on-site
energy, new and renewable energy to provide electricity to rural, mountainous and island
areas; Investment in power development in rural, mountainous and island areas
• The support of the State policy include: + Support on investment; + Support for
investment loan interest rates;
National Energy Development Strategies for Vietnam up to 2020 and
outlook to 2050:
• The share of renewable energy was set at 3% of total primary energy supply by 2010, 5% by
2020, and 11% by 2050.
National Power Development Master Plan (2011-2020) with outlook to
2030, highlighted needs for development of RE, particularly biomass.
Green growth (9/2012): Reduce intensity of GHG emissions per unit of
GDP by 8-10% in 2020, then 1.5-2%/y up to 2030

7. Biomass and biogas Stakeholders in Vietnam
Institutional agencies
+ MOIT
+ MONRE
+ MOC
+ MARD…..
R&D and consultants
+ Bioseed Vietnam
+ Hanoi University of
Agriculture
+ Agro-Forestry University
+ Institute of Agricultural
science of South Vietnam
+ IPP, IPSARD, ISPONRE,
IEVN, RCEE.
Stakeholders
Developers and
suppliers
+ Delta Energy Corp
+ Dinh Hai Cogen JSC
+ Hung Viet composite
+ Kim Nghia
+ Bourbon Tay Ninh JSC
+ Bien Hoa JSC
State owned
companies
+ CASUCO
+ EVN; + PVN; + PV Oil
+ URENCO
+ VINACAFE,
VINAFOOD…
Others (Donors and
Financial Inst.)
+ UNIDO
+ GIZ
+ USAID
+ WB
+ ADB
+ International & Local
Banks, VDB…

8. Institutional agencies
MPI - Responsible for developing policy and regulations : sectors are entitled to incentives
MARD – Policy & National plan on Agriculture and rural dev.
• Department of Crop Production
• Livestock production Department
• Vietnam Administration of Forestry
MONRE - Policy & National plan on Environment
• Vietnam Environment Administration
• Vietnam Environment Protection Fund
MOIT - Policy & National plan on Trade and Industry (power sector)
• General Directorate of Energy
• Electricity Regulatory Authority of Vietnam (ERAV)
• EVN (Single buyer of power)
MOST – Policy & National plan on Science and Technology, intellectual property, standards
MOC - Policy & National plan on Construction
• Department of Technical Infrastructure
Local Authorities (provinces, district and communes)

9. Economic regulations
Contracts are
individually
negotiated with each
project developer,
with a major
determinant of price
level negotiate with
EVN (single buyer)
being project specific
• Benefit/Cost ratio (B/C)
• Economic Internal Rate of Return
(EIRR, %)
• Net Present Value (NPV)
• Payback period on investment (B/I)
• Indicative price: Some Cogen. bagasse
power plants sell electricity to EVN at
price 4UScents/kWh
• EIRR on project : usually 12%-14%

10. FISCAL AND FINANCIAL INCENTIVES
Corporate income tax incentive rate: 10% for a period of 15 years to
newly-established enterprises investing in power plant projects.
• Possibility of 10% tax rate being extended up to 30 years: if the projects are classified as large
scale projects, using high or new technology and in special need of investment.
• Tax exemption for the first 4 years; 50% tax reduction for the next 9 years
Exemption of import duties: for equipment and machinery imported to
create fixed assets of the RE projects.
Special encouraged projects: exemption/reduction of land use fee/rental
(depending also on the location of the projects)
Capital incentives: Access to low-interest loan from VDB : can obtain loans of up
to 70% of the investment cost, with the maximum term of 12 years at an interest rate
equivalent to government bond interest rates with a term of 5 years plus 1%

11. RE - related Vietnam standards (TCVN)
Energy-related TCVNs are grouped in two subjects as section 27 Energy and heat transfer engineering and section 29 - Electrical
engineering
Electrical TCVN sub-system consists of 474 TCVNs (81 % harmonized
with ISs).
Number of current (pure) energy TCVNs including energy efficiency is
more than 30 TCVNs covering:
•
•
•
•
Energy systems (Terms and definitions) – 01 TCVN;
Electricity supply systems – 9 TCVNs;
Solar energy engineering – 01 TCVN;
Energy efficiency – > 20 TCVNs (+ 09 TCVNs planned to be developed in 2012).
National technical standards on emissions from Thermal power plant
(QCVN 22/2009)

12. PROCEDURES FOR PROPOSING AND IMPLEMENTING A PROJECT
Main conditions for the Investor:
• Good experience in project implementation;
• Obtain written agreement on the purchase of electricity by the Electricity of
Vietnam or electricity wholesale or retail units; (see next slide)
• Prove sources of capital to be mobilized and loan commitments of credit
institutions or banks for the project implementation; and
• Have owner’s capital accounting for least 30% of the total investment capital (but
could be lowered up to 20% in special cases).
Required forms for power projects: must be in the form of a
BOT/BOO project or other forms as provided for by law (e.g.: PPP).
Recommendations for investors:
• Supply chain of biomass is of primary importance. Thorough investigation and
control of biomass supply in long term is important.
• Thorough due diligence must be conducted.

13. Approval process for RE generation projects (<30 MW)
Provincial
Peoples
Committee(PPC)
PPC (DPI)
B
A
Investment
Approval FS
Proposal
E
Evaluation
Committee
Investor
Construction
C
D
Approval to
Construct
Business
Registration
DOC
PPC
Sign PPA

14. Procedure of proposing and implementing a small scale IPP
project (<30MW)
Proposal for
project
Investor
Project proposal
PPC (DPI)
Approval
Add to project
list
Negotiation
and draft of
contracts
Initial Project
contract and other
relevant contracts
Obtaining
Investment
Certificate
Application
dossier
Relevant
ministries
for
consultation
opinions
Implementation
of the Project
Negotiating with authorized
competent authority
Request for amendment (10
days)
Investor
PPC
Amended project contract
(10days)
15 days
Issuing Investment certificate

15. Procedures for grid-connection and PPA for RE
Preliminary PPA ;
Grid-connection study;
Negotiation on selling price;
Metering agreement and designing
Design and agreement on SCADA/EMS (Optional for small IPP);
Negotiation and sign PPA.
MoIT’s Decision No. 32/2010/TT-BCT of 30 July 2010 provides detailed conditions and
procedures for connecting power plants to the power distribution network

16. Outlook for Biomass generation in Vietnam

Roadmap for liberalizing electricity market in Vietnam:
 2005 – 2014: competitive generation market
 2015 – 2022: competitive wholesaling market
 After 2022: competitive retail market
For RE

 RE law is on pipeline. RE master plan is under consideration
 Proposal to establish funding and
 complex incentives for RE are on-going (assistance from GIZ)
Specially for Biomass generation

 Currently 10 projects in pipeline (average capacity 10 MW, 8 are
domestic and 2 are Joint Stock Companies)
 FIT for biomass is under preparation (the approval is expected in 20132014)
 Renewable/biomass energy development plans on provincial and
national level are being developed

17. Thank you for your attention!
Contact:
Dr. Nguyen Anh Tuan
Director, International Cooperation Department,
Institute of Energy, MOIT
Website: www.ievn.com.vn
Email: tuannguyen.icd@gmail.com