3. Current application of bagasse for co-generation heat and

Potential of residue from sugar production
for the generation of Heat and Power in
Vietnam
Presenter: NGUYEN VAN LOC
Vice Chairman of the Vietnam Sugar Association
Deputy Chairman of the Board - Bien Hoa sugar JSC
Chairman of Sugar Committee, TTC Group
www.renewables-made-in-germany.com
Agenda
1. Overview of Viet Nam‘s sugar industry
2. Overview of bagasse co-generation of Viet nam‘s sugar industry
3. Current application of bagasse for co-generation heat and power in
Vietnam
4. Legal framework for biomass power generation in Vietnam
5. Challenges and barriers
1. Overview of Viet Nam‘s sugar industry
Key figures at glance
• 41 Mills
• Mills capacity: 139,800
ton/day
• Plantation: 280,000 Ha
• Cane growers: 337,000
families
1. Overview of Viet Nam‘s sugar industry
Area of sugar
production
South Central Coast
& Central Highlands:
Northern (from yellow to
green):
No. of mills:
14
Total capacity (TCD): 52,100
Cane tonnage (1000T): 5,898
Cane Area (1000 Ha):
118
No. of mills:
11
Total capacity (TCD): 42,500
Cane tonnage (1000T): 4,984
Cane Area (1000 Ha):
137
Mekong River Delta:
No. of mills:
10
Total capacity (TCD): 25,150
Cane tonnage (1000T): 4,178
Cane Area (1000 Ha):
52
Southeast:
No. of mills:
5
Total capacity (TCD): 19,500
Cane tonnage (1000T): 2,261
Cane Area (1000 Ha):
34
1. Overview of Viet Nam‘s sugar industry
Sugar season 2013/2014
20.000.000
18.000.000
16.000.000
14.000.000
12.000.000
10.000.000
8.000.000
6.000.000
4.000.000
2.000.000
-
CANE
SUGAR
COUNTRY
NORTHER
N
CENTRAL
SOUTHEAS
T
17.321.60
1.619.420
4.984.600
505.100
5.898.000
576.800
2.261.000
193.870
MEKONG
RIVER
DELTA
4.178.000
343.650
1. Overview of Viet Nam‘s sugar industry
Viet nam’s sugarcane development
320.000
70,0
310.000
60,0
300.000
50,0
290.000
40,0
280.000
30,0
270.000
20,0
260.000
10,0
250.000
240.000
2000
/01
cane area (ha)
303.0
cane yield (ton/ha) 49,8
2001
/02
309.9
49,2
2002
/03
315.0
50,1
2003
/04
287.0
50,5
2004
/05
280.0
51,8
2005
/06
265.0
50,9
2006
/07
310.0
54,8
2007
/08
306.6
54,1
2008
/09
270.6
50,0
2009 2010 2011 2012
/10
/11
/12
/13
265.1 271.4 283.2 283.0
51,7 60,5 61,7 63,5
0,0
1. Overview of Viet Nam‘s sugar industry
Viet nam’s sugar production
1.800.000
160.000
1.600.000
140.000
1.400.000
120.000
1.200.000
1.000.000
800.000
600.000
100.000
80.000
60.000
400.000
40.000
200.000
20.000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011/ 2012
/01
/02
/03
/04
/05
/06
/07
/08
/09
/10
/11
12
/13
sugar production (ton)
650.00 772.64 1.058. 1.069. 902.00754.20 1.144. 1.149. 915.20 904.05 1.150. 1.306. 1.527.
processing capacity(TCD) 68.05080.85082.950 82.350 76.850 82.150 87.500 97.200 105.75 105.75 112.20 129.90 139.80
0
1. Overview of Viet Nam‘s sugar industry
Future development plan –vision to 2020
•
•
•
•
•
•
•
•
•
Sugarcane area 300,000 ha
Cane yield 80 tons per ha
Average CCS = 12
Sugarcane production 24.0 million tons
Total factory crushing capacities 120,000 TCD
Industrial processed sugar 2.0 million tons
No new built sugar factories.
Self- sufficient of sugar
Diversifying the sugar products such as alcohol, microbiological
fertilizer and power from bagasse
1. Overview of Viet Nam‘s sugar industry
Restructuring sugar industry

Adjust, supplement and plan the sugarcane zones for each factory that are
suitable with the national planning.

The provincial people’s committee directs to carry out the projects of
investment and construction for infrastructure such as transportation,
irrigation that are suitable and synchronous with the projects of sugarcane
zone development.

Apply the overall agricultural solutions such as sugarcane seed, intensive
cultivation techniques, pest and insect prevention, mechanization, etc for
concentrate sugarcane zones to increase the sugarcane productivity and
quality.

Mainly focus on increasing productivity and production of sugar on each
hectare, not to enlarge the sugarcane cultivation area.
2. Overview of bagasse co-generation of Viet nam‘s sugar industry
Benefits of bagasse co-generation power in Vietnam

The sugar factory production in the dry season - the season of power shortage , water
shortage to hydropower factories.

Reduce CO2 emissions : estimates of world sugar ISO organization , for every ton of
bagasse will reduce 0.55 tons of CO2 emissions .

Decentralized power station ( in 41 sugar mills ) in rural areas : reduce loss of power
transmission from the central source ( as reported by EVN power loss of about 9-10 %
) . In India , 1MW electricity from bagasse equivalent concentration of 1.67 MW from
thermal coal .

Savings of fossil resources , a ton of 50 % moisture bagasse equal to 0.213 tons of oil

Saving money by burning oil in thermal power centers and purchase power from
China ( 2013 , expected lack of water for hydropower , EVN will have spent $ 5,542
billion to oil burning in thermal power centers and 5,000 billion to buy power from
China ) .
2. Overview of bagasse co-generation of Viet nam‘s sugar industry
Biomass availability in Vietnam

Sugar industry residue (bagasse) is only available in crushing season (120140 days)

There are other biomass residues available such as cane trash,rice husk, rice
straw, coconut pith, wood chip,coffee waste., etc

Such biomass are scattered and the residues are spread over a large area.

To extend the operation of biomass cogeneration facilities up to 280-300
days/year, a system needs to be developed where residues can be efficiently
collected and transported to a central power station or processing location.
2. Overview of bagasse co-generation of Viet nam‘s sugar industry
Benefits of bagasse cogeneration power in Vietnam

Bagasse is residue of sugar industry

41 Factories, Total capacity 139.800 TCD
(tone cane per day)

41 Potential power source with total capacity
>500MW

Only 6 working bagasse cogeneration projects
are exporting power to national grid, Total
capacity 88,5 MW

2 CDM Projects
2. Overview of bagasse co-generation of Viet nam‘s sugar industry
Energy savings in sugar factories
•
Currently, Viet Nam sugar factories are in high energy consumption, Energy savings
in sugar process will increase the power export to the grid .
•
Potential savings in sugar factory is very large , can reduce up to 25 % of total energy
consumption . power consumption of about 35-40 kWh / ton of cane can be reduced
to levels < 30 kWh / ton of cane , steam consumption in about 400-500 kg steam/ ton
cane can be reduced to 300-400 kg/ ton cane
•
Should be Priority investment for a bagasse cogeneration project
•
The area can reduce energy include : CANE MILLING , STEAM GENERATION ,
POWER GENERATION , SUGAR PROCESSING , LIGHTING SYSTEM .
•
The solutions include: changes in operating parameters ( reduce bagasse moisture ,
reduce excess air in boiler, reducing blowdown,etc) , switching turbine to electric
motor, apply continuous technology , apply waste heat recovery system , insulation
against heat loss
3. Current application of bagasse for co-generation heat
and power in Vietnam
 There are only 6 projects
 BACKWARD technology including low pressure boiler <45 ata, and
back pressure turbine resulting in low energy rate, just about 30
Kwh/ton cane
 Seasonal working < 150 days.
 Single fuel: bagasse only
 Only 2 projects implement CDM and carbon credit sale
3. Current application of bagasse for co-generation heat
and power in Vietnam
Power generation projects
OD
1
NAME
Bourbon Tây Ninh
CAPACITY
24 MW
2
CPNĐ Gia Lai
12 MW
3
Đường Ninh Hòa
9 MW
4
5
6
Cam Ranh
Lam Sơn
Sóc Trăng
TOTAL
25 MW
12,5 MW
6 MW
88,5 MW
EXPANSION
CAPACITY
AFTER
EXPANSION
34 MW
EXPANSION
34 MW
EXPANSION
30 MW
SITUATION
25 MW
12,5 MW
6 MW
141,5 MW
3. Current application of bagasse for co-generation heat
and power in Vietnam
Investment rate of implemented projects
1200000
1000000
800000
600000
400000
200000
0
SBT
GIA LAI
NINH HÒA
CAM RANH
SÓC TRĂNG
LAM SƠN
 Total investment for 6 projects is 50 milion USD for 76,5 MW,
investment rate is average 715,000 USD/MW
 Today, investment rate is about 1 Milion USD/MW, depend on origin
and advance technology equipment
3. Current application of bagasse for co-generation heat
and power in Vietnam
Power generation of projects
power/cane (Kwh/ton
cane)
60
50
40
30
20
10
0
SBT
GIA LAI
NINH
CAM
SÓC
HÒA
RANH
TRĂNG
 Averagely about 30 Kwh/ton
cane
 Single fuel: bagasse only
 Operation: less than 150 day
3. Current application of bagasse for co-generation heat
and power in Vietnam
Potential and Scenarios of Viet Nam bagasse
cogeneration development  Targeting 500MW in 2020
Cane
production
(mil ton)
Export power 30Kwh/tc
(current)
Export power
70Kwh/tc (medium
pressure)
Export power 130
Kwh/tc (high pressure,
advanced tecnology)
Export unit
(GWH)
Export
capacity
(MW)
Export unit
(GWH)
Export
capacity
(MW
Export unit
(GWH)
Export
capacity
(MW
480
133
1.120
311
2080
577
600
166
1400
388
2600
722
16 (2015)
20 (2020)
4. Legal framework for biomass power generation in Vietnam
•
•
•
•
•
•
Electricity Act 2004 ( adjusted 2012): interest and capital support
for electricity from renewable energy projects in rural and
mountainous areas
2005 Investment Law : investment incentives for renewable energy
projects , in areas of investment incentives
Law encouraging domestic investment in 2003 :
Environmental Protection Act 2005 and support incentives for
renewable energy projects
Decree 04/2009/ND-CP on incentives , support environmental
protection activities : preferential support for import of renewable
energy and renewable energy production .
Government Decree No. 151/2006/ND-CP of 20/12 , 2006, the
investment credit and export credit
4. Legal framework for biomass power generation in Vietnam
 Decree No. 61/2010/ND-CP : The power project from bagasse
cogeneration power is renewable energy projects in the agricultural
sector LIST SPECIAL INVESTMENT INCENTIVES
 Decision No. 1855/QD-TTg , 27/12/2007 Energy Development
Strategy of Vietnam National 2020 vision 2050
 Decision No. 130/2007/QĐ-TTg dated 02/8/2007 mechanisms
and policies for investment projects under the clean development
mechanism ( CDM )
 Decision 1208/QD-TTg ( or Master Plan 7 ) . Objectives power from
bagasse cogeneration power plants in sugar will reach a total
capacity of 500MW , and by 2030 will reach 2000MW
 Decision 24/2014/QD-TTg mechanism to support the development
of biomass power project in Vietnam
4. Legal framework for biomass power generation in Vietnam
Development Orientation according to Decision 24/2014

The MoIT shall be responsible for preparing the national biomass energy utilization
and development master plan and submitting for the Prime Minister’s approval.

The Purchaser shall be responsible for purchasing all electric power produced by the
grid-connected biomass power generation plant under its jurisdiction.

Projects of biomass power project should be in the form of independent entity to
fully enjoy the preferential treatment . ( 10 % corporate tax exemption for 5 years
reduction in the next several years v / v ..... ).

For combined heat and power projects: the Purchaser is obligated to purchase entire
redundant electricity generated from combined heat and power projects using
biomass energy at the delivery point at 1,220 VND/kWh (excluding VAT, equivalent to
5.8 US cents/kWh).

For other biomass power projects, which are not combined heat and power projects:
The electricity purchase price shall apply the avoided cost mechanism.
5. Challenges and barriers
5.1 Transmission line

The investor of a biomass power project shall be responsible for investing, operating
and maintaining the transmission line and transformer station (if any) from the
Seller’s power plant to the connection point as agreed with the Purchaser.

Distance from sugar factory (where bagasse fuel is available) to connection point as
agreed with purchaser is normally quite far, because the sugar factory is normally in
the rural area and far from connection point. The investment cost for transmission
line could be remarkable in some cases.

Voltage of transmission line: higher voltage means higher investment but it could
reduce the loss of power transmission. Lower voltage could reduce the reliable of
exporting power.
5. Challenges and barriers
5.2 Knowledge level

There is a lack of updated information on bio-energy technologies

Information of high efficiency energy conversion technologies in the sugar
cane industry such as GSTIG – gasifier steam injected gas turbin (or
Biomass Integrated Gasifier Gas Turbine Technology -BIG GT), multiple –
fuel steam generator, at reasonable investment cost.

Opportunities of Carbon Funding through CDM or VGS systems is too
complicated and unknown.
5. Challenges and barriers
5.3 Capital financing

Cogeneration systems are capital intensive projects and the sources of
capital financing is an important consideration.

Sugar companies, the investors of bagasse cogeneration project, are in
difficult time due to the situation of sugar industry: low prices, excess
supply.

So the self-financing is limited and unfeasible

The borrowing could be an alternative providing the project is high rate of
return and require certain equity and guarantee

Other alternatives such as leasing, third party financing is not familiar with
Viet Nam investors
5. Challenges and barriers
5.4 High investment cost of equipment
Decision on the origin of the
equipment : China , India ,
Europe , Japan , ..
•
•
Decision on single or multiplefuel boiler
Advanced technology and high
efficiency equipment is preferd
•
•
Decision on back pressure or
condensing steam turbine
But modern technology is high
investment cost
•
•
System
storage
and
transportation
of
sugarcane
bagasse
The selling price of product
(power)
is
fixed
at
5.8UScents/kWH
•
Strugling between payback (IRR)
and reliability of invested
equipment
•
•
System
supply
treatment
and
•
The environmental issues
water
5. Challenges and barriers
5.4 High investment cost of equipment
Decision on technology and investment rate
Technology
Low pressure boiler
and turbine
High pressure
boiler and turbine
(CEST –
condensing
extraction steam
turbin)
GSTIG – gasifier
steam injected gas
turbin
Potential of
Power exporting
0-30 kWH/tc
Investment
rate
< 500.000
USD/MW
70-130 kWh/tc
500.000 –
1.500.000
USD/MW
200-250 kWh/tc
1000.000 –
2.000.000
USD/MW
5. Challenges and barriers
5.4 High investment cost of equipment
Advantages of high pressure boiler and turbine
Almost all boilers of sugar factories in Viet Nam is operating below 45 Kg/cm2
Thank you for your attention
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www.renewables-made-in-germany.com

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