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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
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
Agenda
• 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
Key figures at glance
1. Overview of Viet Nam‘s sugar industry
Area of sugar production
South Central Coast
& Central Highlands: No. of mills: 14
Total capacity (TCD): 52,100
Cane tonnage (1000T): 5,898
Cane Area (1000 Ha): 118
Mekong River Delta: No. of mills: 10
Total capacity (TCD): 25,150
Cane tonnage (1000T): 4,178
Cane Area (1000 Ha): 52
Northern (from yellow to
green): No. of mills: 11
Total capacity (TCD): 42,500
Cane tonnage (1000T): 4,984
Cane Area (1000 Ha): 137
Southeast: No. of mills: 5
Total capacity (TCD): 19,500
Cane tonnage (1000T): 2,261
Cane Area (1000 Ha): 34
Sugar season 2013/2014
COUNTRYNORTHER
NCENTRAL
SOUTHEAST
MEKONGRIVERDELTA
CANE 17.321.60 4.984.600 5.898.000 2.261.000 4.178.000
SUGAR 1.619.420 505.100 576.800 193.870 343.650
-
2.000.000
4.000.000
6.000.000
8.000.000
10.000.000
12.000.000
14.000.000
16.000.000
18.000.000
20.000.000
1. Overview of Viet Nam‘s sugar industry
Viet nam’s sugarcane development
1. Overview of Viet Nam‘s sugar industry
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
cane area (ha) 303.0 309.9 315.0 287.0 280.0 265.0 310.0 306.6 270.6 265.1 271.4 283.2 283.0
cane yield (ton/ha) 49,8 49,2 50,1 50,5 51,8 50,9 54,8 54,1 50,0 51,7 60,5 61,7 63,5
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
240.000
250.000
260.000
270.000
280.000
290.000
300.000
310.000
320.000
Viet nam’s sugar production
1. Overview of Viet Nam‘s sugar industry
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
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) 68.05080.85082.95082.350 76.850 82.150 87.50097.200 105.75 105.75 112.20 129.90 139.80
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
160.000
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
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.
1. Overview 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 (120-
140 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 co-
generation 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
2. Overview of bagasse co-generation of Viet nam‘s sugar industry
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
3. Current application of bagasse for co-generation heat
and power in Vietnam
OD NAME CAPACITY
SITUATION
CAPACITY
AFTER
EXPANSION
1 Bourbon Tây Ninh 24 MW EXPANSION 34 MW
2 CPNĐ Gia Lai 12 MW EXPANSION 34 MW
3 Đường Ninh Hòa 9 MW EXPANSION 30 MW
4 Cam Ranh 25 MW 25 MW
5 Lam Sơn 12,5 MW 12,5 MW
6 Sóc Trăng 6 MW 6 MW
TOTAL 88,5 MW 141,5 MW
Investment rate of implemented projects
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
0
200000
400000
600000
800000
1000000
1200000
SBT GIA LAI NINH HÒA CAM RANH SÓC TRĂNG LAM SƠN
Power generation of projects
3. Current application of bagasse for co-generation heat
and power in Vietnam
Averagely about 30 Kwh/ton cane
Single fuel: bagasse only
Operation: less than 150 day
0
10
20
30
40
50
60
SBT GIA LAI NINH
HÒA
CAM
RANH
SÓC
TRĂNG
power/cane (Kwh/ton
cane)
Potential and Scenarios of Viet Nam bagasse
cogeneration development Targeting 500MW in 2020
3. Current application of bagasse for co-generation heat
and power in Vietnam
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
16 (2015) 480 133
1.120
311
2080
577
20 (2020) 600 166
1400
388
2600
722
• 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.
4. Legal framework for biomass power generation in Vietnam
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 multiple-
fuel boiler
• Decision on back pressure or
condensing steam turbine
• System storage and
transportation of sugarcane
bagasse
• System supply and water
treatment
• The environmental issues
• Advanced technology and high
efficiency equipment is preferd
• But modern technology is high
investment cost
• The selling price of product
(power) is fixed at
5.8UScents/kWH
• Strugling between payback (IRR)
and reliability of invested
equipment
5. Challenges and barriers
Decision on technology and investment rate
Technology Potential of
Power exporting
Investment
rate
Low pressure boiler
and turbine 0-30 kWH/tc
< 500.000
USD/MW
High pressure
boiler and turbine
(CEST –
condensing
extraction steam
turbin)
70-130 kWh/tc
500.000 –
1.500.000
USD/MW
GSTIG – gasifier
steam injected gas
turbin 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
5. Challenges and barriers
5.4 High investment cost of equipment