Press Release

Sweetening the deal for biomass energy in Viet Nam

Hanoi, Viet Nam – December 11, 2018 – The Global Green Growth Institute (GGGI) and GIZ today launched a landmark report that shows how Viet Nam’s sugar industry could generate enough clean biomass electricity to power 630,000 households per year, create thousands of jobs and reduce carbon emissions.

Viet Nam’s vast sugar industry can utilize its bagasse waste from crushed sugarcane together with other sources of biomass like wood chips, rice straw and rice husks to generate much-needed electricity in a carbon neutral way. There are currently 41 sugar mills in Viet Nam generating over USD$1 billion in revenue, contributing at least 0.53% of GDP. The total energy production could reach 4,300 GWh per year, which is enough to power 630,000 households.

To reach this full potential the report calls on the government to:

  1. Apply and increase the feed-in-tariff for all biomass energy technologies to USD 9.35c per kilowatt hour from the current tariff of USD 5.4c per kilowatt hour
  2. Revise the current power purchase agreement to address the issues of dispute resolution, extension rights, grid connections and termination rights to increase the attractiveness to investors.
  3. Promote the use of multiple fuel sources together with bagasse to extend the run-time of the energy plants.
  4. Promote the establishment of separate power companies via setting up a special purpose vehicle to increase attractiveness of financing from domestic and international sources.

If fully realized, the biomass sector could be a game-changer for Viet Nam’s energy sector.

“Viet Nam has huge untapped potential for biomass energy, and with some simple changes in policy we can see over 730 MW of clean energy resulting in significant emissions reductions,” said Adam Ward, Country Representative of the Global Green Grown Institute (GGGI) Viet Nam.

The report, titled Sweetening the Deal for Biomass Energy in Viet Nam’s Sugar Industry,  shows that the sugar industry could generate an additional 2,180 green jobs and reduce approximately 2.7 million tons of carbon emissions a year, equivalent to 7% of Ho Chi Minh City’s greenhouse gas emissions in 2013. This will help Viet Nam decrease reliance on coal power and to meet the Paris Agreement commitments and implement the Sustainable Development Goals as well as increase the income of farmers.

“The report is based on a number of pre-feasibility studies on biomass energy projects at local sugar mills that GGGI and GIZ have conducted since last year. Based on the results, a number of key issues needs to be addressed to promote both domestic and international investment in biomass energy and enhance bankability of biomass energy projects,” Ingmar Stelter, Director of the Energy Support Program at GIZ.

The report also highlights the need to improve access to financing for biomass energy projects. This will require capacity building both in the sugar industry and among financial institutions.

Viet Nam Sugarcane and Sugar Association (VSSA) welcomed the study and urged the government to increase the feed-in tariff for biomass energy to USD 9.35c per kWh.

“The report shows the benefits of exploiting the great potential of the sugar industry, that can contribute energy during the low season (dry season hydropower) and national security as well as create revenue and competition in sugar industry. It will also bring jobs and greater income for the sugar industry and reduction of carbon emissions,” said VSSA Chairman Dr Pham Quoc Doanh.

The report’s conclusions are based on pre-feasibility studies conducted by GGGI and GIZ at five sugar mills across the country. The report scales up the detailed analysis to the national level to provide recommendations for the government on how to unleash the potential of biomass power in the sugar industry.

Read the full report here.

For more information, please contact:

Ms. Nguyen Thanh Hang                                   Ms. Nguyen Kim Ngan

Partnership and Communications Officer     PR and Communications Officer

GGGI Viet Nam office                                         MOIT/Energy Energy Support Programme

Mobile: 0936329883                                          Mobile: 0902163379

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