On October 03, in Hanoi, Vietnam, key results of five Pre-Feasibility studies of energy projects in the sugar industry have been shared with 50 representatives from provincial governments, investors, local banks and other stakeholders at the Investor Forum on “Financing opportunities on CHP projects from Vietnamese sugar industry”. The Forum is co-organized by the Global Green Growth Institute (GGGI) and GIZ’s Renewable Energy and Energy Efficiency (4E) Project in collaboration with the Vietnam Sugarcane and Sugar Association. The activity is part of the Climate Finance Readiness programme in Vietnam which is commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) and partly co-financed by the United States Agency for International Development (USAID) Global Climate Change Office.
The five Pre-Feasibility studies were carried out at Phung Hiep Sugar Mill, Vi Thanh Sugar Mill, Dak Lak Sugar Mill, NASUCO Sugar Mill and LASUCO Sugar Mill. Conducted by local consultants including Enerteam, Institute of Energy and Science, and Power Engineering Consulting Joint Stock Company 4 in collaboration with a German company, E-Quadrat.
As the Vietnam’s sugar industry is getting prepared to face a strong competition with the decreasing of import duties on sugar in the framework of ASEAN trade agreement, Vietnamese sugar mills are looking into the application of modern, state-of-the art technologies in their prodcution and into creating complementary revenue streams such as selling surplus electricity to the grid.
”With these pre-feasibility studies, sugar mills can get a real picture of the investment opportunities. At the same time, Vietnamese consultancy companies have been trained in executing such kind of pre-feasibility studies for Combined Heat and Power Plants for the sugar industry. Thanks to the Investor Forum, commercial banks, sugar mills and government representatives will have a better understanding of the potential for power production from the local sugar industry and gain confidence in the technology. This forum is one step to support the sugar industry but also for Vietnam to utilize its important potential for biomass energy.”says Ms. Sonia Lioret, Head of GIZ’s 4E project.
Adam Ward, GGGI Country Representative in Viet Nam adds ”Viet Nam has a 2030 target of 2% electricity supplied by biomass, this will only be achieved through the involvement of private sector finance. That’s why today’s investor forum is very important, it is a chance for sugar companies and financial institutions to come together to understand each other’s needs – only then will we see the necessary financial flows in renewable energy and Viet Nam achieving these targets”.
As part of the forum, experts from the Vietnam Sugarcane and Sugar Association present an overview of sugar industry development in Vietnam and the potential for increasing biomass utilization for energy production. International consultants also share their insights about success factors and lesson learnt from international and regional sugar industry development.
Today, 351.6 MW of bagasse based projects from 11 sugar mills are in operation, of which 99.9 MW was connected to the grid by beginning of 2017 and benefit from the Feed in tariff (FIT) of 5.8UScent/kWh for CHP biomass fueled projects. The technical potential of electricity generation within the sugar industry in Vietnam is estimated at approximately 2,346,017 MWh of annually generated electricity ; this equals the annual electricity supply for ca. 450,000 households in Vietnam.
”GIZ’s support aims firstly to increase the capacity of the current biomass based power production by improving the plants’ efficiency. We encourage these plants to run with alternative biomass fuels during the off season, as they are usually not in operation at that time. All in all, we support the development of bankable biomass energy projects in the industry”, says Sonia Lioret.
At the occasion of the Biomass Investor Forum, the Electricity and Renewable Energy Authority, Ministry of Industry and Trade (MoIT) together with the GIZ 4E Project launch the Project Development Guidelines for grid-connected biomass energy projects in Viet Nam. These guidelines explain the investment process for biomass energy in Vietnam and aim at facilitating the utilisation of biomass for electricity production. A full version of the guideline is available ont his link http://gizenergy.org.vn/en/knowledge-resources/giz-publications
Following the Investor Forum, the Global Green Growth Institute (GGGI) and GIZ’s 4E Project in collabroation with the Vietnam Sugarcane and Sugar Association organize a training workshop on “Fundamentals on biomass energy projects for commercial banks”. The workshop is a joint effort to provide in-depth technical and financial knowldege and insights for the local banks about biomass utilization for energy production and project appraisal of CHP biomass fueled projects.