The Hanoitimes - The report calls on the Vietnamese government to apply and increase the feed-in-tariff for all biomass energy technologies to USD9.35c per kilowatt hour (kWh) from the current tariff of USD5.4c per kWh.
Vietnam’s sugar industry could generate enough clean biomass electricity to power 630,000 households per year, create thousands of jobs and reduce carbon emissions, according to a report launched by GGGI and GIZ Monday.
Vietnam is now home to 41 sugar mills, which generate 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.
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.
The report 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 Vietnam 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.
To reach this full potential, authors of the report call on the Vietnamese government to apply and increase the feed-in-tariff for all biomass energy technologies to USD9.35c per kilowatt hour (kWh) from the current tariff of USD5.4c per kWh.
They also recommended revising 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.
To increase attractiveness of financing from domestic and international sources, they suggested promoting the establishment of separate power companies via setting up a special purpose vehicle.
If fully realized, the biomass sector could be a game-changer for Vietnam’s energy sector.
“Vietnam 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) Vietnam.
Vietnam Sugarcane and Sugar Association (VSSA) welcomed the study and urged the government to increase the feed-in tariff for biomass energy to USD9.35c 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 Pham Quoc Doanh.
Besides licensing more coal power plants, the Vietnamese government has encouraged investment in renewable energy by increasing the feed-in tariffs for solar and wind power.
Source: GIZ, GGGI