Project

Scaling up Biomass Waste-to-Energy in Viet Nam

At a Glance

Start Date Q1 2017
Funding Source Core
Approved Budget USD 702 000
Status Active
Thematic Area
  • Cross Cutting

Project Rationale

Viet Nam’s GHG inventory (2010) reveals a 602% increase since 1990, with emissions per unit of GDP surpassing all other Asia-Pacific developing countries except for China. This is fueled by domestic coal consumption, which has increased by 21% between 2013 and 2014 alone. Coal currently accounts for 36% of electricity supply, and is projected to increase 56% by 2030. Over 98% of the population is connected to the grid, and demand will increase by a further 10% a year until 2030.

The Government of Viet Nam (GoV) has signaled support for the removal of fossil subsidies and for both cost-recovery pricing for electricity and market-based pricing for coal. The GoV’s willingness to remove coal subsidies can only do so much; the current feed-in tariffs are not set at a sufficient level to cover risk and encourage large-scale private sector investment across all technologies. However, profitable options do exist such as agricultural waste-to-energy. These biomass inputs are widely available throughout the country, but have so far been under-utilized.

Despite significant potential, renewable energy accounts for just 6% of total installed capacity, the vast majority of which is small-scale hydropower. Further, the reliance on hydro is increasingly fragile in a world of climatic variations in river flow and geopolitical tensions as some 60% of Viet Nam’s river flow originates from outside of its borders .

Recognizing these challenges, the GoV’s Green Growth Action Plan (VGGAP) includes focus on the national energy strategy, policies to develop clean energy sources, biomass and geothermal R&D, and energy infrastructure sustainability. The GoV has also adopted a Renewable Energy Development Strategy and the Revised National Power Development Master Plan 7, which set biomass targets of around 6% and 2% of the energy mix, respectively, by 2030.

This project will contribute to poverty reduction and social inclusion (PR&SI) by working directly with farmers to provide additional source of income through the payment for their waste products of bagasse (sugar), wood, rise husk, and rice straw. Farmers currently use the waste product to grow mushrooms for additional income. For waste-to-energy to be economically viable, the payment must be larger than the profit they currently receive from mushrooms, thus raising their overall income. The project will work closely with the Ministry of Labour, Invalids, and Social Affairs (MOLISA) across relevant activities and stakeholder consultation.

Building on 2015-16 Work

Though “energy” is a relatively new area of work for GGGI in Viet Nam, the Institute will leverage integrated in-house capacity, and relationships built and experiences acquired in 2015-16. This experience includes partnering with the MPI, the MOIT and the MONRE to produce and validate a CPF that prioritizes increased green energy production, as well as ongoing work with GIZ, to develop feasibility studies for biomass-to-energy projects that will then be taken to bankability in 2017.

Effectively responding to the request by MPI, MOIT, and MONRE to support the development of green energy resources will require further technical assistance to the GoV to design actionable plans and finance bankable biomass and waste-to energy projects.

Delivery Strategy

PROJECT OUTPUTS FOR 2017-18:

  • Develop a waste-to-energy action plan at the provincial level and submit to government
  • Develop a proposal for a project in waste-to-energy and submit to potential funders

PROJECT OUTCOMES FOR 2017-18:

  • Government approves the waste-to-energy action plan for implementation
  • Funding approved for a bankable project in waste-to-energy

Planned Results

The overall outcome of the project is to support an increase in green energy production, and consequently a reduction in emissions, through the adoption of action plans that will be implemented and result in the financing of waste-to-energy projects. This will be done by delivering the following outputs:

A waste-to-energy action plan at the provincial level developed. Based on Viet Nam’s Green Growth Strategy (VGGS), VGGAP and the GoV’s request for support to increase green energy sources, a provincial action plan for waste-to-energy production will be developed. In consultation with stakeholders, GGGI will identify a suitable province for action plan development, assess and identify potential waste-to-energy options in both electricity production and fuel switching for process heating, to develop a list of suitable actions that take into account national and sub-national policy objectives, including PR&SI, and prioritize biomass waste-to-energy actions for implementation.

A proposal for a waste-to-energy project developed and submitted to potential funders. Building on the work with GIZ in 2016, which developed feasibility studies for sugar bagasse waste-to-energy projects, GGGI will develop a pilot project within the biomass waste-to-energy sector. This pilot project will be taken to bankability by mobilizing concessional funding resources to fill any investment ‘gap’. The pilot project will be drawn from the provincial waste-to-energy action plans, and will continue to engage GIZ in order to support resource mobilization and facilitate knowledge sharing synergies.

Related

Project
Mongolian Green Credit Fund (MGCF)
Start Date Q2 2017
Funding Source National Finance Vehicle
Approved Budget USD 50 000 000
Status Active
Thematic Area
  • Cross Cutting
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