The Vietnamese government stipulated preferential treatment for biomass power generation investment in the Prime Minister’s decision (No.24 / 2014 / QD-TTg) dated March 24, 2014, but the Prime Minister’s decision in March 2020 (No.08) / 2020 / QD-TTg), and a new FIT system was established.
According to this new system, in the case of cogeneration power generation, the new FIT price for biomass power generation will be 1,634 VND / kWh (equivalent to 7.0 S cents / kWh), compared to the old FIT price of 1,220 VND / kWh (5.8 cents / kWh). It was a big increase. In addition, the FIT price for cases other than cogeneration power generation is set at 1,968 VND / kWh (equivalent to 8.47 cents / kWh). This price does not include VAT.
According to the Ministry of Commerce and Industry of Vietnam, this revision encourages more investors to invest in biomass power generation, especially in cogeneration power generation using sugar cane residue (bagasse) as fuel, and to improve profitability. Has been done.
Biomass power generation is a mechanism for generating electricity by utilizing the biological resource “biomass” generated from animals and plants, and is one of the renewable energies. There are a wide variety of biomass in nature. For example, trees, industrial trees, algae and other plants, agricultural residues (sugar millet residues, rice straw, rice husks, etc.), forestry residues / residues / waste (wood chips, wood waste, etc.), waste treatment facilities, etc. Typical examples are methane generated at wastewater treatment plants and livestock manure.
Japan International Cooperation Agency (GIZ) has long supported the development of biomass power generation in Vietnam
According to the German Development Cooperation Organization (GIZ), this revision of the FIT system for biomass power generation is highly regarded as a very important provision for the Vietnamese government to attract more investment in biomass power generation. It is said that this revision aims to achieve the development plan stipulated in the revised 7th National Electricity Master Plan (Revised PDP7). Although the plans for biomass power generation development in 2020, 2025, and 2030 are set at 660 MW, 1,200 MW, and 3,000 MW, respectively, as of 2019, only the installed capacity of 175 MW is grid-connected. It is far below the target value.
Over the past few years, GIZ has supported the Ministry of Commerce and Industry to review FIT prices through the EU-Vietnam Technical Assistance Program, based on its accumulated international experience and its reputation for biomass power generation at home and abroad.
At the same time, the program will calculate the selling price of cogeneration power generation using biomass fuel such as agricultural residues, establish a calculation model, analyze the possibility of applying the selling price to the power generation of biomass fuel, and obtain a new purchase price. It has assessed the impact of levels on retail prices and has helped the Vietnamese government formulate and report on policies and make final decisions.
Starting in 2019, the German Development Cooperation Organization (GIZ) will work with its strategic partner, the Renewable Energy and Power Agency, to implement climate protection, generate electricity and use heat through the development of the sustainable biomass energy market in Vietnam. We have promoted the sustainable development of biomass resources for the purpose of.
The project is funded by the Federal Ministry for Environment, Nature Conservation and Nuclear Safety, the federal agency of the Federal Republic of Germany, with the ability to formulate master plans, expertise and planning capabilities of each sector involved in biomass energy. The aim is to improve and make more effective investments.
The development of biomass power generation meets the ever-increasing demand for electricity in Japan and contributes to the reduction of industrial waste.
According to Sven Ernedal, director of renewable energy and energy efficiency projects at GIZ’s Energy Support Program (ESP), Vietnam’s biomass power generation has tremendous potential for development. It is said that it can be cultivated for central energy use.
This revision of the regulations will reduce greenhouse gases, create green jobs (* jobs that are profitable as a business while reducing the burden on the environment to a sustainable level), and improve the quality and safety of power supply. , It is expected to lead to strengthening the competitiveness of sugar manufacturing companies. It is expected that not only the profits of sugar manufacturers will increase, but also the effects of improving efficiency and reducing waste will be obtained. He said biomass energy will help meet the ever-increasing demand for electricity as the economy develops.
In addition, Tobias Cossen, director of the Program for Sustainable Biomass Energy Market Development at ESP, said that Vietnam’s recent renewable energy policies are not limited to biomass energy, but solar energy, especially wind energy in the future. It states that it is focusing on the potential for development. He said the increase in FIT prices for biomass power generation is a signal from the Vietnamese government that it is positively showing that the utilization of agricultural residues such as sugar cane residues will have a positive impact on future energy development…
Expected to increase investment in biomass power generation in Vietnam in the future
According to Ministry of Commerce and Industry statistics, six years later, around 2026, the installed capacity of grid-connected biomass power plants will reach about 350 MW, which is about half of the revised PDP7 target by 2020. .. Currently, there are 10 investment projects for cogeneration power generation, and the total installed capacity is equivalent to 350 MW. The two power plants (equivalent to 19 MW) have already signed a power sale contract, but are said to be inactive.
The Vietnamese government is expected to continue to actively attract investment in biomass power generation, and investment in biomass power generation will be one of the major business opportunities for Japanese investors.