VietNamNet Bridge – Plants producing biomass power from bagasse and rice husk now are operating perfunctorily, with many unable to connect with the national grid while some are even forced into a dead halt, as the prices of this kind of power are very low, at 3-5 U.S. cents per kWh only.

The information was given by Nguyen Duc Cuong, director of the Center for Renewable Energy under the Vietnam Institute of Energy, at a seminar on green energy development solutions in HCMC last week.

Nearly 40 bagasse-based biomass power plants have been developed with a total designed capacity of 150 MW but they are still unable to connect with the national grid due to current low power prices. Only five such biomass power factories are in operation now but the power prices offered to them are only 3-5 U.S. cents per kWh.

For instance, an investor of a biomass power plant using rice husk at Tra Noc Industrial Park couldn’t install a turbine for the facility because of financial constraints resulted from low power prices. Similarly, another plant in Long An Province with a designed capacity of 50kW has stopped operation after some time due to low economic efficiency.

“Twenty other investors have readied themselves for executing biomass power projects in the Mekong Delta but it’s pity that it is not the right time for them to do so because power prices are too low. Many plants producing biomass power from bagasse are also unable to expand capacity due to the lamentable prices,” Cuong said.

The potential of biomass power in Vietnam is pretty huge with more than 100 million tons of materials available annually, including 40 million tons of straw, eight million tons of rice husk, six million tons of bagasse, and over 50 million tons of other agricultural wastes.

Vietnam has set a target of having a combined capacity of 500 MW of biomass power by 2020, which is raised to 2,000 MW in 2030. As such, the country will need to develop an average of 100 MW of this kind of energy annually from now until 2020.

In the meantime, a host of biomass power projects are still looking forward to a proper supporting mechanism, with a reasonable increase in power prices needed to ensure benefits for investors.

The prices of biomass power set at 3-5 U.S. cents per kWh in Vietnam are not yet attractive to investors as compared to those of nearly 12 U.S. cents in China, roughly 10 U.S. cents in Thailand or even up to 15 U.S. cents in certain other countries, Cuong noted. He informed the Ministry of Industry and Trade will forward to the Government an assistance plan targeting the development of biomass power projects at home at the end of this year.

Under the plan, Vietnam Electricity Group (EVN) will buy biomass power at between 5.6 U.S. cents and 10.9 U.S. cents per kWh depending on the type of feedstock.

Source: SGT