Sugar industry and potential for biomass energy development

The report also informs: The sugar industry can use waste from sugar cane bagasse along with other biomass sources, such as wood sawdust, straw and rice husk, to generate much necessary electricity in the carbon neutralizing way.

Today, in Vietnam there are 41 sugar mills with a turnover of more than US$ 1.0 billion per year contributing at least 0.53% of GDP. These sugar mills can provide 630,000 households with 4,300 GWh per year.

So the sugar industry could create 2,180 green jobs and cut about 2.7 million tons of carbon emissions each year, equivalent to 7 percent of greenhouse gas emissions in Ho Chi Minh city in 2013, that help Vietnam to reduce its dependence on coal power and to meet the commitments of the Paris Agreement as well as to achieve its goals of sustainable development.

"Vietnam has a great potential for untapped biomass, and with just a simple number of policy changes, 730MW of clean energy could be available for greatly reducing emissions", said Adam Ward, GGGI Country Chief Representative for Vietnam.

And Mr. Ingmar Stelter, GIZ Program Director for Energy Support said "This report is based on a number of pre-feasibility studies on biomass projects at local sugar mills that GGGI and GIZ have carried out since 2017. From these results, a number of key issues need to be resolved to promote domestic and international investment in biomass energy and improve access to finance for the biomass energy projects".

The report also emphasizes the necessity to strengthen the capacity of sugar mills and financial institutions to develop and evaluate biomass projects for funding.

Dr. Pham Quoc Doanh, chairman of Vietnam Sugar and Sugarcane Association (VSSA), added: "The VSSA welcomes this report and asks the government to pay attention to recommendations for implementing biomass energy price at $ 9.35 per kWh. The report shows that these benefits will harness the huge potential of the sugar industry, and contributing to offsetting electricity amount that cannot generate  hydropower plants in dry season and national energy security, generating revenue, increasing competitiveness of the sugar industry, bringing jobs and income to the sugar industry  and reducing carbon  emissions"

The conclusions of the report are based on pre-feasibility studies conducted by GGGI and GIZ at five sugar mills across the country. The report extends detailed analysis to the national level to give recommendations to the government on how to utilize biomass potential in the sugar industry.

To achieve the full results as mentioned above, the report suggests the following proposals to the Government of Vietnam:

1.To apply and increase FiT for biomass energy technologies to 9.35 cents/ kWh compared to current 5.4 cents per kWh;

2.To amend the current electricity purchase agreements to increase attractiveness for investors;

3. To promote the use of multiple sources of fuel along with bagasse to extend the operation time of power plants;

4.To promote the sugar company for special purpose, to increase financial attractiveness from domestic and international investment sources.

VietnamEnergy.vn