Giz2011 en Exploring Biogas Market Opportunities Vietnam

EXPLORING BIOGAS MARKET OPPORTUNITIES IN VIETNAM
www.renewables-made-in-germany.com
EXPLORING BIOGAS MARKET OPPORTUNITIES IN VIETNAM
Authors Nguyen Duc Cuong et al November 2011 Editor Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH On behalf of the German Federal Ministry of Economics and Technology (BMWi) Contact Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH Potsdamer Platz 10, 10785 Berlin, Germany Fax: +49 (0)30 408 190 22 253 Email: pep-southeastasia@giz.de Web: www.giz.de/projektentwicklungsprogramm Web: www.exportinitiative.bmwi.de
This report is part of the Project Development Programme (PDP) South-East Asia. PDP South-East Asia is implemented by the Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry of Economics and Technology (BMWi) under the renewables Made in Germany initiative. More information about the PDP and about renewable energy markets in South-East Asia: www.giz.de/projektentwicklungsprogramm
This publication, including all its information, is protected by copyright. GIZ cannot be liable for any material or immaterial damages caused directly indirectly by the use or disuse of parts. Any use that is not expressly permitted under copyright legislation requires the prior consent of GIZ. All contents were created with the utmost care and in good faith. GIZ assumes no responsibility for the accuracy, timeliness, completeness or quality of the information provided.
Exploring Biogas Market Opportunities in Vietnam
Content
INTRODUCTION 1. REVIEW AND ANALYSIS OF THE ELECTRICITY INDUSTRY IN VIETNAM
1.1. Power need and growth rate for 2001-2010 1.2. Electricity pricing 1.3. Power production and potentials to 2020 (next 10 years) 1.4. Existing power sources and projection for the next 10 years 1.5. Electricity market actors 1.6. Roadmap for the competitive electricity market 1.7. Electrical grid
1 3
3 7 10 11 13 13 15
2. UNDERSTANDING AND ASSESSING THE BIOGAS ENERGY MARKET IN VIETNAM
16
2.1. Biogas sources in Vietnam 16 2.1.1. Biogas from domestic animals wastes 16 2.1.2. Biogas from municipal wastes 18 2.1.3. Biogas production from waste treatment processes (solid and liquid wastes) in specific food, foodstuff and beverage industries 19 2.2. Use of biogas in Vietnam 2.3. Overview of biogas projects in Vietnam 2.3.1. Small sized household biogas projects 2.3.2. Medium and large sized biogas projects 22 27 28 29
2.4. Information about partnership in biogas development between Vietnam and foreign parties 33 2.4.1. Government and foreign organization funding for demonstration projects or policy making and market promotion; 33 2.4.2. Partnership type (ii) taking part in waste treatment methane collection projects; and (iii) provision of equipment and technology. 36 2.5. Economics of biogas projects 2.5.1. Investment cost 2.6. Available biogas technologies in Vietnam 2.6.1. Popular technologies in Vietnam 37 37 45 45
2.7. Information about local companies that are potential candidates as partners with German firms in biogas development 52
3. REVIEW, RESEARCH AND FORMATION OF THE LEGAL FRAMEWORK FOR THE DEVELOPMENT OF RENEWABLE ENERGY/BIOGAS IN VIETNAM 53
II
3.1. Summary of legislative instruments focusing on renewable energy/biogas 3.2. Barriers to renewable energy development in general and biogas energy 3.3. Trends and pathways for institution, regulatory arrangements, economic arrangements and frameworks for international cooperation in the biogas energy market
53 58
61
4. RECOMMENDATIONS FOR POTENTIAL PROJECTS IN THE BIOGAS ENERGY TECHNOLOGY MARKET

4.1. Identifying the needs for specific technologies, services, products and opportunities for Vietnam Germany partnership
65
65
4.2. Information about market entry opportunities and procedures for German companies interested in doing business (import/export) or investment (getting license, partnership) in the field of biogas energy 67 4.3. Background information about relevant local institutions and contact information for German companies reference also, information about the role and responsibility of different stakeholders and agencies in the biogas field 69
APPENDICES
Appendix 1. Industrial scale alcohol producers Appendix 2. Industrial scale aquatic production and processing facilities Appendix 3. Industrial scale sugar production and processing facilities
75
75 76 80
III
ministrey
List of Tables
Table 1.1. Gross capacity of power plants by 2010, by owners ................................................. 3 Table 1.2. Electricity retail prices for 2011 ................................................................................ 8 Table 1.3. Tariff with avoidable costs for 2011 ....................................................................... 10 Table 2.1. Solid waste from domestic animals, 2010 ............................................................... 17 Table 2.2. Methane amount from domestic animals wastes, 2010 ......................................... 17 Table 2.3. Municipal waste generation in Vietnam, 2010 (million tons) ................................. 18 Table 2.4. Theoretical gross biogas potentials, 2010 ............................................................... 21 Table 2.5. Summary of expected electricity generation capacity from biogas and municipal wastes to be added to the grid (MW)........................................................................................ 22 Table 2.6. Gas consumption by system size ............................................................................. 24 Table 2.7. Classification of biogas systems as recommended by local prestigious institutions in terms of biogas technology................................................................................................... 28 Table 2.8. Medium and large sized biogas projects ................................................................. 31 Table 2.9. Projects with a foreign partner in medium and large sized biogas collection ......... 36 Table 2.17. Background information of potential investors and partners in biogas development .................................................................................................................................................. 52 Table 3.1. Summary of legal frameworks conducive to renewable energy development in Vietnam .................................................................................................................................... 54 Table 3.2. Barriers and interpretation ....................................................................................... 58 Table 3.3. The legal framework for the development of biogas/renewable energy ................. 62 Table 4.1. Potentials and ability to develop biomass and biogas energy ................................. 67 Table 4.2. Gross capacity of renewable electricity connected to the grid in use (MW)........... 67
IV
List of Figures
Figure 1.1. Power need and growth rate, 2001-2010 ................................................................. 3 Figure 1.2. Distribution of sources, by owner ............................................................................ 6 Figure 1.3. Distribution of sources, by supply mode and fuel ................................................... 6 Figure 1.4. Distribution of power sources by 2020 .................................................................. 12 Figure 2.1. Current uses of biogas ............................................................................................ 24 Figure 2.2. Biogas lamp (illustration)....................................................................................... 25 Figure 2.3. Biogas-fired power generating system ................................................................... 26 Figure 2.4. KT 1 and KT2 models ............................................................................................ 28 Figure 2.5. Energy Institutes floating cover biogas system .................................................... 46 Figure 2.6. Energy Institutes fixed dome cover biogas system ............................................... 46 Figure 2.7. Can Tho Universitys biogas system design .......................................................... 47 Figure 2.8. Biogas system, model KT-2 ................................................................................... 47 Figure 2.9. VACVINAs biogas system ................................................................................... 48 Figure 2.10. RDACs design .................................................................................................... 48 Figure 2.11. Vinyl bag-typed biogas system ............................................................................ 49 Figure 2.12. 5,000 m3 covered anaerobic lagoon in Thai Nguyen ........................................... 50 Figure 2.13. UASB + SMAG anaerobic tank at Lam Son sugarcane plant, Thanh Hoa ......... 50 Figure 2.14. EGSB and SAR_T anaerobic tank under construction in Quang Ngai ................ 51 Figure 4.1. Balance of demand and supply of primary energy................................................. 66
Currency
1 USD = 1 EUR = VND 20.83 (Sep 2011) VND 28.384 (Sep 2011)
Measurement
W kW MW GW Watt Kilowatt Megawatt Gigawatt Wp kWp MWp GWp Watt peak Kilowatt peak Megawatt peak Gigawatt peak Wh kWh MWh GWh Watt hour Kilowatt hour Megawatt hour Gigawatt hour
VI
List of Acronyms
ADB BF BG CDM CERs EGSB EI EU EVN GDP GG GW HCMC HDPE IPP JICA MARD MoIT MRD MWe N&RE ODA PDD PPA REAP toe UASB WB Asian Development Bank Biofuel Biogas Clean Development Mechanism Certified Emission Reductions Expansion Granular Sludge Bed Digester Energy Institute European Union Electricity of Vietnam Corporation Gross Domestic Product Greenhouse gas Gigawatt Ho Chi Minh City High density Polyethylene Independent Power Producer Japan International Cooperation Agency Ministry of Agriculture and Rural Development Ministry of Industry and Trade Mekong River Delta Megawatt electrical New and renewable energy Official development aid Project design document Power purchase agreement New & Renewable Energy Action plan Ton of oil equivalent Up flow Anaerobic Sludge Blanket World Bank
0. Introduction
Development goals and visions of Vietnams national electricity industry in the foreseeable future are reflected in the Prime Ministers Decision 1208/Q-TTg, dated July 12, 2011, in approval of the Master plan for the development of national electricity industry in Vietnam for 2011-2010 and vision to 2030, that available renewable energy sources in Vietnam will be prioritized and promoted to increase the proportion of power output from renewable energy from the current marginal level to 5.6% and 9.4% in 2020 and 2030 respectively (by rated capacity and not including hydropower generation of 30 MW output or higher). The development strategy for renewable energy in Vietnam to 2030 and vision to 2050, as well as the Master plan for the development of renewable energy in Vietnam for 2011-2020 and vision to 2030 (drafts1), have also been conceived and are currently being reviewed by the Government. In these draft strategy and master plan for renewable energy, biogas energy of various sources are viewed as a renewable energy of priority, as in addition to grid power production (about 439 MW), biogas electricity will also be developed for off-grid residential areas (about 12,000 households) and use of heat generated from biogas will be promoted for household cooking and agroforestry processing. About 10 million m3 of biogas instruments are expected to be developed in different types and sizes for power and heat generation as well as cogeneration. Vietnam is a developing country with favorable geographic position and climate, where economic activities rely heavily on agroforestry and animal husbandry. This is an advantage that gives Vietnam access to bounteous renewable energy resources of massive reserves that can be effectively put to use to generate enough energy to meet local needs, as a replacement to fossil fuel while contributing to environmental protection at the same time (minimizing emission of greenhouse gas, acid rain gases, dust and so on). The Project Development Programme (PDP) South-East Asia of the German Development Cooperation Agency (GIZ), on behalf of the German Federal Ministry of Economics and Technology (BMWi), aims to promote bilateral cooperation and experience exchange between Vietnamese and German companies. This study is part of the PDP South-East Asia Project and its key purpose and focus is to capture an overview of the status and potentials of producing and utilizing biogas in Vietnam, as well as identify the opportunities and challenges to the development of a biogas technology market. To be specific: Capturing an overview of Vietnams electricity industry Understanding the biogas market in Vietnam Reviewing the available legal framework for renewable energy development in Vietnam Making recommendations on the pathway for development of biogas energy technology and market. This report has four parts: Part 1. Overview of Vietnams electricity industry. This section takes a snapshot of current power consumption, power sources, needs and power sources development targets in Vietnam for the next decade (to 2020). It then lists electricity prices by categories, including prices of micro-
Apr. 2011, the Ministry of Industry and Trade has submitted the draft to the Government for review and is awaiting approval.
hydropower ( 30 MW) and wind power sources. The roadmap for a competitive power market and entry in this market is also studied and documented. Part 2. Understanding the biogas market in Vietnam. The discussion concentrates on the analysis and assessment of the production and use of biogas as well as the status of previous and ongoing biogas projects. This is followed by a review of the efficiency and existing types of technology in use. Finally, the section gives an update and consolidation of information on various business activities that are going on in the biogas field, followed by discussions on technology application potentials. Part 3. Review of the conducive legal framework for renewable energy development in Vietnam. This part gives an outline of related legislative instruments including strategies, development plans and policies influencing the development of renewable energy/biogas energy. Opportunities and barriers are also identified and explained. Part 4. Recommendations on the future development of biogas energy technology and market. The need for biogas, potentials for technology development and the governments biogas-fire power generation ambitions are compiled and analyzed. Investment opportunities, market information and potential partners for the development of a biogas market in Vietnam are also studied and discussed. Despite huge efforts in gathering information and data about biogas in Vietnam as demonstrated throughout the report, drawbacks in terms of data sources and expected information are unavoidable. Explanations for such shortcomings include: (i) additional funding for sample verification and examination in the field and interviews is recommended, (ii) materials, data or statistics about power sources, consumption levels, technologies are not readily available (no institutions are formally responsible for data collection, update and reporting); getting access to and collecting information from reports and studies in this domain in Vietnam is now a challenge, including even data from both local and international partners. As biogas projects are often small and medium-sized enterprises (Groups B and C2 projects), they are only subject to sub-national (provincial) investment licensing. Consequently, it needs some time to get access to information from private investors and local regulators, as hesitance sometimes exists in the discussion and information providing process.
Medium and small sized categories B, C or even below C projects, with total invested capital of less than VND 1,500 billion (about US$ 73 million).
1. Review and analysis of the electricity industry in Vietnam

1.1. Power need and growth rate for 2001-2010
In the last decade (2001-2010), commercial electricity sales to economic sectors and household use were on sustained increase at a high growth rate of about 14.5% on average. Commercial electricity sales volume increased from 31.1 billion kWh in 2001 to 99.1 billion kWh in 2010, which is more than three times higher in just 10 years. Commercial power output in 2010 (99.1 billion kWh) was 14.3% higher than in 2009 (a 2.5 times growth compared to GDP). The Figure below illustrates electricity need and growth in Vietnam between 2001 and 2010. Figure 1.1. Power need and growth rate, 2001-2010
Nhu cneed u i nfor 2001 - 2010 Power 2001-2010
120,000 17.0% 100,000 15.5% 14.4% 13.7% 12.9% 80,000 13.0% 12.8% 12.8% 12% 10% 60,000 8% 40,000 Nhu cu i n 20,000 T c tng 2% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0% 2011 6% 4% c (%) t ng (%) Growth T rate 16% 14.3% 14% 18%
Statistics show that at the end of 2010 the total rated capacity of all power sources in Vietnam was 21,542 MW, including 11,848 MW from EVN (55%) and 9,694 MW of non-EVN output (45%, including joint ventures between EVN and other partners). Details of power sources as of 2010, by owners, fuels and technologies are described in the following tables and figures. Table 1.1. Gross capacity of power plants by 2010, by owners No Power plant Gross capacity I Hydropower 1 Sn La 2 Ho Bnh 3 Thc B 4 Tuyn Quang 5 Bn V 6 Qung Tr 7 A Vng 8 Ca t 9 Vnh Sn 1 8 3 3 2 2 2 2 2 Generators Rated capacity (MW) 21,541.5 7,633 400 1920 120 342 320 64 210 97 66 EVN EVN EVN EVN EVN EVN EVN JV with Vinaconex EVN Owner
Power demand (GWh) Nhu cu in (GWh)
No
Power plant
Generators 2 2 4 2 3 2 2 1 2 2 2 2 2 4 4 2 2 2 2
Rated capacity (MW) 70 100 720 260 360 64 86 95 220 80 280 54 220 400 160 150 300 175 300 2,745
Owner EVN EVN EVN EVN EVN Joint venture EVN EVN EVN EVN EVN Joint venture EVN EVN EVN Joint venture EVN EVN EVN
10 Hinh River 11 Pleikrong 12 Ialy 13 S San 3 14 S San 4 15 KrongH'nag 16 Bun Tua Srah 17 Tranh River 2 18 Srepok 3 19 Srepok 4 20 Bun Kup 21 Hng in 22 Ba H River 23 Tr An 24 a Nhim 25 Thc M 26 Hm Thun 27 a Mi 28 i Ninh II Coal-fired thermoelectricity 1 Ph Li 1 2 Ph Li 2 3 Ung B 4 Ung B extension 5 Ninh Bnh 6 Haiphong 7 Qung Ninh III Fuel oil-fired thermoelectricity 1 Th c 2 Cn Th 3 Mn IV Steam turbines + HRSG systems
4 2 2 1 4 2 2
440 600 105 300 100 600 600 537
Joint venture Joint venture EVN EVN Joint venture EVN EVN
3 1 1
169.5 37.5 330 3,197
EVN EVN EVN
No
Power plant
Generators 8GT+S9+S10 4GT+ST23,26 3GT+S14 2GT+ST3 4GT 4GT
Rated capacity (MW) 388 949 1140 468 102 150 500 6,929.5
Owner Joint venture EVN EVN EVN EVN EVN Private
1 B Ra 2 Ph M 21 3 Ph M 1 4 Ph M 4 5 Th c 6 Cn Th V VI Diesel-fired and micro hydropower plants Non-EVN
1 Nm Chin 2 Bn Cc 3 Na Dng 4 Cao Ngn 5 Cm Ph 6 Sn ng 7 Bnh in 8 Cn River 9 S San 3A 10 Za Hng 11 Bc Bnh 12 a Dng 2 13 Cn n 14 Srokphumieng 15 Hip Phc 16 Formosa 17 Ph M 3 18 Ph M 22 19 Nhn Trch 1 20 Nhn Trch 2 21 C Mau 1 22 C Mau 2
2 3 2 2 2 2 2 3 2 2 2 2 2 2 3 1 2GT+ST3 2GT+ST3 2GT+ST3 1GT 2GT+ST1 2GT+ST4
32 18 111 115 600 220 44 63 108 30 33 34 78 51 375 150 740 740 465 250 771 771
Northwest Power Development JS Co. Que Phong Hydropower JS Co. TKV TKV TKV TKV Binh Dien Hydropower JS Co. Geruco-Song Con Hydropower JS Co. Joint venture Za Hung JS Co. Vietnam Power Development JS Co. Southern Hydropower JS Co. Da River Co. IDICO Foreign investors Foreign investors Foreign investors Foreign investors PVN PVN PVN PVN
No
Power plant
Generators 2 2 2 1
Rated capacity (MW) 13.5 72 24 21 1000
Owner Foreign investors Foreign investors Foreign investors PVN Imported
23 Amata 24 Vedan 25 Bourbon 26 Ph M ammonium nitrate
27 Import from China
Figure 1.2. Distribution of sources, by owner

Phn loi theo ch s hu Distribution by owner
PVN 11%
Imported Nh p khu 5% 5%
Others Khc 1% 1%
Foreign NT nc ngoi investors 10% 10%
TKV 5%
EVN 55%
Joint C phn ventures 11% 11%
Private T nhn 2% 2%
Figure 1.3. Distribution of sources, by supply mode and fuel

Distribution by production Phn lo i theo lo i hnh smode n xu t Imported Nhp khu 5% 5% Steam kh Turbine turbines 32% 32% Others Khc 2%2% Hydropower Thu in 38%
38%
Nhigas-fired t in du Fuel 3% thermoelectricity 3%
Nhi t in than Coal-fired 18% thermoelectricity
18%
Nhi t in chy Gas-fired thermoelectricity kh 2% 2%
By the latest update, the total added power capacity in 2010 was 2,546 MW. This supplementary output however was not available until the end of the year, and as a result, the actual consumed output from added sourced in 2010 was modest.
1.2. Electricity pricing

In the last four years, since the introduction of the Prime Minister Decision 26/2006/Q-TTg in December 2006, setting the roadmap for marketization of electricity prices, the country has seen five rounds of electricity price adjustment. The first round was on Jan. 1, 2007 when the average electricity price climbed to VND 842/kWh, 7.6% higher than 2006. From that point on, the electricity prices kept increasing over time by about 5%-10% each year. Typically, in the price rise spree of March 1, 2011, the electricity prices saw the highest climb rate at 15.28% to reach VND 1,242/kWh, equivalent to 6 US cents by VCBs exchange rate of Sep. 30, 2011. Instead of being traditionally adjusted once a year on March 1 every year, the Prime Ministers Decision 24/2011/Q-TTg of Apr. 15, 2011 now paves the way for electricity price changes every three months on average. Circular 31/2011/TT-BCT, dated Aug. 19, 2011 of the Ministry of Industry and Trade provides the guidelines on how electricity prices are changed based on the variance of three input components: (i) fuel costs, (ii) exchange rate, and (iii) the composition of power output transmitted on the grid from different sources.3 In addition, the directive also makes clear that this automatic pricing system from Sep. 1, 2011. The following section provides in brief information related to the Prime Ministers Decision 24/2011/Q-TTg, Apr. 15, 2011 on market-based electricity pricing. In case fuel costs and exchange rates at the calculating time deviate from the values used to determine the current electricity prices and the composition of power output has changed compared to the generation plan approved by the Ministry of Industry and Trade, causing sales prices at the calculating time to be higher than the current levels by: a) 5%, Vietnam Electricity may raise electricity prices by an equivalent margin once it has applied for such a raise and received approval of the Ministry of Industry and Trade; b) more than 5%, Vietnam Electricity shall file a report to the Ministry of Industry and Trade with a copy submitted to the Ministry of Finance for verification. After 15 business days since the Ministry of Industry and Trade reported to the Prime Minister, whose reply is not received (or not yet received), Vietnam Electricity may automatically change electricity prices by a 5% limit. Below is a list of current electricity prices for 2011.
Changes in the distribution of power capacity can be explained by the increase of power output from coal, hydropower or gas and the cost differences of these electricity sources.
Table 1.2. Electricity retail prices for 2011 Electricity retail prices for business uses No 1 Power supply Power supply of 110 kV or higher voltages a) Normal hours b) Off-peak hours c) Peak demand 2 Power supply of 22 kV to below 110 kV voltages a) Normal hours b) Off-peak hours c) Peak demand 3 Power supply of 6 kV to below 22 kV voltages a) Normal hours b) Off-peak hours c) Peak demand 4 Power supply of below 6 kV voltages a) Normal hours b) Off-peak hours c) Peak demand Electricity retail prices for irrigative water pumping No 1 Power supply 6 kV or higher voltages a) Normal hours b) Off-peak hours c) Peak demand Below 6 kV a) Normal hours b) Off-peak hours c) Peak demand Prices (VND/kWh) 956 497 1,415 1,023 521 1,465 Prices (US cent/kWh)5 4.6 2.4 6.8 4.9 2.5 7.03 1,139 708 2,061 5.47 3.4 9.89 1,093 683 1,999 5.24 3.3 9.6 1,068 670 1,937 5.12 3.2 9.3 Prices (VND/kWh) 1,043 646 1,862 Prices (US cent/kWh)4 5 3.1 8.94
4 5
Vietcombank VND/USD exchange rate as of Sep. 30, 2011: USD 1 = VND 20,830. Vietcombank VND/USD exchange rate as of Sep. 30, 2011: USD 1 = VND 20,830.
Electricity retail prices for public services No 1 Power supply Hospitals, daycare centers, nursery schools, primary to high schools a) Power supply of 6 kV or higher voltages b) Power supply of below 6 kV voltages Public lighting a) Power supply of 6 kV or higher voltages b) Power supply of below 6 kV voltages Public services a) Power supply of 6 kV or higher voltages b) Power supply of below 6 kV voltages Electricity retail prices for business uses: Power supply Prices (VND/kWh) 22 kV or higher voltages a) Normal hours 1,713 b) Off-peak hours 968 c) Peak demand 2,955 6 kV below 22 kV a) Normal hours 1,838 b) Off-peak hours 1,093 c) Peak demand 3,067 Below 6 kV a) Normal hours 1,862 b) Off-peak hours 1,142 c) Peak demand 3,193 Progressive electricity retail prices for household uses No 1 2 3 4 5 6 7 Monthly household consumption 50 kWh (poor and low income households) 0-100 kWh (middle income households) 101-105 kWh 151-200 kWh 201-300 kWh 301-400 kWh 401 kWh and above Prices (VND/kWh) 993 1,242 1,304 1,651 1,788 1,912 1,962 Prices (US cent/kWh)8 4.8 5.9 6.3 7.9 8.6 9.2 9.4 Prices (VND/kWh) Prices (US cent/kWh)6
1,117 1,192 1,217 1,291 1,242 1,291
5.4 5.7 5.8 6.2 5.96 6.2
No 1
Prices (US cent/kWh)7 8.2 4.6 14.2 8.8 5.2 1.5 8.9 5.5 15.3
Electricity retail prices for household use in rural areas, uplands and islands not covered by the national power grid are approved by provincial level People's Committees, but not outside the maximum and minimum price range below:
6 7
Vietcombank VND/USD exchange rate as of Sep. 30, 2011: USD 1 = VND 20,830. Vietcombank VND/USD exchange rate as of Sep. 30, 2011: USD 1 = VND 20,830. 8 Vietcombank VND/USD exchange rate as of Sep. 30, 2011: USD 1 = VND 20,830.
10
a) Minimum price: VND 1,863/kWh (or 8.9 US cents/kWh) b) Maximum price: VND 3,105/kWh (or 14.9 US cents/kWh). Wind power tariff Buyers are responsible to purchase the entire power output from wind power projects at the price of VND 1,614/kWh at the point of delivery (exclusive of VAT; equivalent to 7.8 US cents/kWh). Power purchase prices are subject to changes of the VND/USD exchange rate.9 Tariff with avoidable costs for 2011 (attached to Decision 66/Q-TL, dated Dec. 31, 2010, of the head of Electricity Regulation Administration). Table 1.3. Tariff with avoidable costs for 2011 (VCB exchange rate as of Sep. 30, 2011: USD 1= VND 20,830) Dry season Peak demand Electricity price (VND/kWh) North Central South Rated price (for all the 3 regions, VND/kWh) Normal hours Offpeak hours Peak demand Rainy season OffNormal peak hours hours Surplus output
603 573 575 1,772
590 567 568
561 563 555
529 481 511
498 468 501
484 460 492
242 230 246
The average price with avoidable cost according to this list is VND 916/kWh (about 4.43 US cents/kWh). Nevertheless, this low price level can only be applicable to renewable energy projects being micro hydropower plants with advantageous locations (proximity to roads and connection nodes, and profuse water supply).
1.3. Power production and potentials to 2020 (next 10 years)

For power production, the targets set in the master plan of electricity industry development for 2011-2020 and vision to 2030 are: Sufficient supply to meet domestic need for electricity with generated and imported power output by 2015 of about 194-210 billion kWh, and about 330-362 billion kWh by 2020; Priority given to the development of renewable energy sources for power production; and increase of power output from these sources from a marginal level to 4.5% of the total power output by 2020.
By Vietnamese laws, the currency used in purchase and sales agreements within the Vietnam territory must be the VND. Accordingly, this Decision must clearly note that the electricity purchase price is in VND and at VND 1,641/kWh (when the Decision was released, the VND/USD exchange rate was 1614 : 7.8 = 20692, or USD 1 = VND 20,692). Adjustment of electricity purchase prices by VND/USD exchange rates variance is good for investors. This can be interpreted as in case electricity from a wind power plant is bought after the Decision release date and the exchange rate is higher than the above mentioned rate, the investors selling electricity to EVN may use the exchange rate at the time of sales to set the sales price in VND/kWh. For example, in June 2012, a wind power investor sells electricity to EVN. The exchange rate at that time is VND 22000 for one USD. The wind-propelled electricity price in the agreement will then be 22000 x 7.8 = VND 1,716/kWh, not VND 1,614/kWh as original specified in the Decision.
11
Generated and imported power capacity by 2020 is expected to be about 330 billion kWh, including 19.6% of hydropower, 46.8% of coal-fired thermoelectricity, 24.0% of gas-fired thermoelectricity (with 4.0% of LNG fuel), 4.5% of power generated from renewable energies, 2.1% of nuclear power and 3.0% of imported electricity.
1.4. Existing power sources and projection for the next 10 years
As discussed in section 1.1 on retrospective power demand (2001-2010), it is known that at present (Dec. 31, 2010), the gross rated capacity of all power sources in Vietnam is 21,542 MW and the usable capacity is 19,735 MW. The electricity demand in Vietnam will increase by nearly 3.3 times in the next decade, from 100.071 billion kWh in 2010 to 194 billion kWh by 2015 and 330 billion kWh by 2020.10 To sufficiently meet the power need for development and at the same time, enlarge reserved sources from the existing levels, key perspectives in developing power sources in Vietnam in the future include: Balanced development of source capacity in the North, Central and South regions; Expansion of reserved sources by 6%-7%, taking into account the risk of delay in the construction of power plants, often for 1-2 years; Estimation of coal supply capacity and potential development of natural gas mines; Increasing the proportion of coal-fired thermoelectricity in the Central and South; Maintaining coal-fired power sources at less than 60% of the total source capacity; Development of micro hydroelectricity and power sources from renewable energies at appropriate proportions; Early introduction of pumped-storage hydroelectricity in the South to level the leverage graph for thermoelectricity sources; Development of nuclear power plants to relieve over time the dependence on fossil fuels; Sustained increase of electricity import from Laos, Cambodia and China; Promotion of BOT, BOO projects.
With these perspectives in mind, a pathway for the development of power sources in Vietnam in the next decade has been drawn and elaborated upon (based on the Prime Ministers Decision 1208/Q-TTg, July 21, 2011): Development of biomass electricity generation and co-generation so that by 2020, this source provides a gross capacity of about 500 MW; Upgrading the total capacity of wind power from the currently marginal level to about 1,000 MW by 2020; Priority given to hydroelectric sources, especially multipurpose projects, including flood control, water supply, power production; raising the capacity of hydroelectric sources from the current 9,200 MW to 17,400 MW by 2020; Research and development conducted to put pumped-storage hydropower plants in operation, in sync with the development pace of the overall power system to improve efficiency: by 2020, pumped-storage hydroelectricity to yield a total capacity of 1,800 MW;
The Prime Ministers Decision 1208/Q-TTg, July 21, 2011, approving the national electricity development master plan for 2011-2020 and vision to 2030.
10
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Natural gas-fired thermoelectricity: by 2020, power sources using natural gas fuels to have a capacity of about 10,400 MW; Coal-fired thermoelectricity: the available domestic coal supply is to be brought into full use for the development of thermoelectric plants, where use of locally made coal will be preferred for the North; by 2020, the total coal-fired thermoelectricity capacity is to reach about 36,000 MW. Development of nuclear power plants to help stabilize power supply in the future when local primary energy sources become depleted; putting the first nuclear power generator in Vietnam in operation in 2020; Development of power plants using liquidated natural gas (LNG) to diversify fuel sources for power generation and maintain power and fuel gas security; by 2020, power sources using LNG to have a capacity of about 2,000 MW; Distribution of power sources: by 2020, the gross capacity of all power plants is expected to reach about 75,000 MW, including 23.1% of hydropower, 2.4% of pumped-storage hydroelectricity, 48.0% of coal-fired thermoelectricity, 16.5% of gas-fired thermoelectricity (with 2.6% of LNG fuel), 5.6% of power generated from renewable energies, 1.3% of nuclear power and 3.1% of imported electricity. Details are illustrated in the Figure below.
Figure 1.4. Distribution of power sources by 2020

Distribution of power C cu Cng su t ngusources n n nby m2020 2020 Pumpedstorage Thy in hydroelectricity tch nng 2.4% 2.4%
NhiCoal-fired t i n thermoelectricity than 48% 48.0%
Hydropower Thy in 23.1% 23.1% Imported i n Nhp electricity khu 3.1% 3.1%
NLTT Renewable energies 5.6% 5.6%
Gas-fired Nhi t i n thermoelectricit kh t y 16.5% Nuclear i n Ht 16.5% nhn power 1.3% 1.3%
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1.5. Electricity market actors

EVN is owning the majority of power source capacity and controlling the entire process of power transmission, system operation, distribution and retailing to end-users. In power generation, EVN owns or is holding the control stake of over 70% of the gross nameplate capacity of the entire system. The remaining is owned by other state-run groups or large companies such as Vietnam Petroleum Group, Vietnam Coal and Minerals Group, Da River Co., among others, foreign investors (in BOT, IPP approaches) and local private sector investors in the IPP format. These power plants sell electricity to EVN under a long-term power purchase agreement (PPA).
However, in accordance with the approved pathway, the electricity market in Vietnam in the near future will come into form and develop in three stages: i) electricity generation market ii) wholesale electricity market, and iii) retail electricity market. The competitive electricity generation market will have a sole buyer. Electricity generating agencies will sell their capacity through PPAs and competitive offering on the spot market. EVNaffiliated electricity distributors will be formed and restructured as independent business units. In the foreseeable future (see details in section 1.6 below), the competitive electricity generation market will run in line with the set pathway. Participants in this market will include: Competitive power generation entities: power plants with rated capacity of over 30 MW connected to the national grid (except for wind power plants, geothermal power plants); The sole electricity dealer: EVNs electricity purchase and sales company; Regulator of the electricity system and market: National electricity system regulation center; Provider of power measurement data collection and management services: Information technology center, Electricity Information and Telecoms Company; Provider of electricity transmission services: National electricity transmission company.
1.6. Roadmap for the competitive electricity market

Pursuant to the Prime Ministers Decision 26/2006/Q-TTg, Jan. 26, 2006, endorsing the roadmap and conditions for the formation and development of various stages of the electricity market in Vietnam, the electricity market will be established and developed through three stages. Stage 1 (2005-2014): competitive electricity generation market Stage 2 (2015-2022): competitive wholesale electricity market Stage 3 (after 2022): competitive retail electricity market. Each stage will comprise of two phases: pilot and full-fledged markets, to be specific:
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a) Phase 1, stage 1: pilot competitive electricity generation market (2005-2008). A competitive electricity generation market will be developed between different power plants of Vietnam Electricity Group (EVN) to experiment competition in power generation with one single buyer. Power plants, electricity transmission companies and electricity distributors affiliated to EVN will be restructured as independent business units. Independent power producers (IPPs) not affiliated to EVN will continue to sell electricity to EVN through subscribed long-term power purchase agreements (PPAs). At the end of the piloting phase, major power plants playing key roles in the existing power system belonging to EVN will be converted to IPPs as independent state-owned companies, while the remaining plants are converted to independent power producers in the form of jointstock companies to prepare for a full-fledged competitive electricity generation market. The electricity generation market will be deemed full-fledged once the preconditions for this phase are met. IPPs not owned by EVN will be allowed to offer to sell to get a full-fledged competitive electricity generation market started (with one single buyer). Power generating entities will sell to the market through PPAs and competitive offers in the spot market in a two-sponged allocation scheme decided for each entity by the Electricity Regulation Administration. The wholesale electricity market will be piloted once the preconditions for this phase are met. A number of distributors and major buyers are selected to pilot a competitive wholesale electricity market. Some new wholesalers will be formed to promote competition in the sales and purchase of electricity. Existing electricity transmission companies will be merged to form a single national electricity transmission company under EVN. Distributors, system operators and market transaction operators will continue to work under EVN. The competitive wholesale electricity market will be deemed full-fledged once the preconditions for this phase are met. Existing EVN-attributed electricity distributors will be converted to independent companies (state-owned or joint-stock companies) to buy electricity directly from power generating entities and in turn, power generating entities will also compete to sell electricity to these buyers. Wholesalers also participate in the competition to sell to distributors and major buyers. The competitive retail electricity market will be piloted once the preconditions for this phase are met. A number of distribution grid areas of appropriate sizes will be selected for the pilot. Based on the consumption level determined by the Electricity Regulation Administration, buyers may select power suppliers they see fit (electricity retailers). The electricity retailing function of distributors selected for the experiment will be separated from the distribution grid management and operation function. Electricity retailers will compete to sell electricity to individual end-users and buy electricity from wholesalers. Based on the consumption level determined by the Electricity Regulation Administration, electricity users nationwide may select power suppliers they see fit (electricity retailers) or buy
b) Phase 2, stage 1: full-fledged competitive electricity generation market (2009-2014).
c) Phase 1, stage 2: pilot competitive wholesale electricity market (2015-2016).
d) Phase 2, stage 2: full-fledged competitive wholesale electricity market (2017-2022).
) Phase 1, stage 3: pilot competitive retail electricity market (2022-2024).
e) Phase 2, stage 3: full-fledged competitive retail electricity market (from 2024).
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directly from the electricity market. Entities and individuals meeting the requirements for power supply activities are allowed to form new electricity retailers to stay competitive in the retailing domain. These retailers may buy electricity from power generating entities or the electricity market to sell retail to users.
1.7. Electrical grid

The existing electrical power transmission grid in Vietnam is running at 500 kV, 220 kV and 110/66 kV voltages. A 500 kV transmission line links the electrical system of the three regions (North, Central and South). 220 kV power lines now cover the entire country with a gross length of about 8,500 km (as of 2010) and the total length of the 110/66 kV is about 12,500 km. General assessments of the development of the electrical grid in Vietnam to 2010 indicate that while the transmission grid has been extensively developed, only about 50% of the set targets have been achieved, where only 41% of the 500 kV grid and 50% of the 220 kV grid have been developed. Causes of the delay include: funding constraints, hindrances in site clearance, increasing material costs, poor contractors capacity and so on. In the future (2011-2020), the local electrical power transmission grid will be further developed to meet the needs of: Having a reliable electrical grid for supply and transmission of electrical power and reduction of power loss in transmission; Connecting electrical centers nationwide into an uniform electrical system; Developing the 220 kV and 110 kV grids to meet transmission needs when different sources are put in use; Designing an electrical grid scheme with high reserve level and flexibility to supply and transmit electricity safely and reliably, meeting standard quality requirements (voltage and frequency).
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2. Understanding and assessing the biogas energy market in Vietnam

2.1. Biogas sources in Vietnam
Vietnam is a developing agricultural country, with a sustained high annual average GDP growth rate (of about 7%) for the last 10 years. Apart from achievements in living conditions and economic development, Vietnam is encountering various issues of energy supply and environmental protection amid the current climate change. Wastes and disposed of substances from households and the processes of industry, agriculture, forestry production are emerging as a pressing concern that needs a harmonized and urgent response, both at the macro (policies, solutions etc.) and micro (technology, equipment etc.) levels, to efficiently tackle the sources of waste emission and solve the problems of pollution, and at the same time generate energy for sustainable development. One of the technologies that may serve to both aggressively tackle wastes to meet environmental standards and create energy sources in place of fossil fuels such as coal and oil, and has been used in Vietnam as far back as in 1960 is the biogas technology. With a conducive climate and as an agricultural country with high GDP growth, Vietnam has a very diverse material source for biogas production, from domestic animals wastes, human wastes to wastes from such industries as food, foodstuff and beverages processing. To be specific:
2.1.1. Biogas from domestic animals wastes Domestic animals wastes (livestock, poultry excrements) are being used to produce biogas in Vietnam. The biogas output depends on the number and type of domestic animals and ability to gather wastes. In Vietnam, domestic animals with large numbers are pigs, cows and bulls, buffalos and poultry such as chicken, ducks and so on. Other domestic animals like horses, goats, sheep, among others only take up a small share compared to the afore mentioned animals. In 2010, there were about 27.4 million pigs, 5.9 million cows and bulls and 2.9 million buffalos, and some 300 million of various types of poultry. Every year, the domestic animal herd discharges nearly 100 million of solid wastes, a couple of hundreds of millions of liquid wastes and multiple millions of gaseous wastes.11 Domestic animals waste treatment is therefore receiving growing interest from public regulators, the civil community and livestock farmers. The total waste amount is estimated based on empirical data and actual measurement12, compiled and illustrated in the following Table.
The Ministry of Education and Training, Agriculture University No. 1, 2009, Report at the Workshop on breeding wastes: status and solutions, Hanoi, Nov. 26-27, 2009.
12
11
Energy Institute, 2005, Assessment of biogas energy potentials in Vietnam.
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Table 2.1. Solid waste from domestic animals, 2010 Livestock & poultry Buffalo Cow and bull Pig Poultry Number (million) 2.9 5.9 27.4 300 Total Average Daily discharged waste amount* (kg/animal/day) 18-25 15-20 1.2-4.0 0.18-0.34 Waste amount (million tons/year) 19-26 (Average: 22.5) 32-43 (Average: 37.5) 12-40 (Average: 37.5) 19-37 (Average: 28) 82-145 113.5
Source: Statistics Yearbook 2010, (*) Animal Husbandry Administration, Netherlands Development Agency, Apr. 2007, Training material ..., Studying team.
Biogas (with about 60% being methane) from domestic animals wastes can be gathered and used for energy generation with appropriate digester instruments and technology. The potential biogas sources from domestic animals wastes are estimated based on domestic animal data in Table 2.1 above (Statistics Yearbook 2010), and an experimental formula13 compiled and presented in the following Table. Table 2.2. Methane amount from domestic animals wastes, 2010 Animal Buffalo Cow and bull Pig Poultry Total Daily gas volume* (liter of gas/kg of fresh materials) 15-32 15-32 40-60 50-60 Biogas output (million m3/year) 335-720 562-1200 1500-2250 1400-1680 3797 - 5850 Average biogas Percentage output (%) (million m3/year) 527.5 10.93 881 18.26 1875 1540 4823.5 38.87 31.94 100
Source: + (*) Animal Husbandry Administration, Netherlands Development Agency, Apr. 2007, Training material ... Studying team (methane takes up 60% of the biogas share).
The biogas potentials are reviewed by the methane output that can be generated in a year. The annual potential biogas output from breeding wastes is calculated using the following formula: Ki = Si x Ri x Ti x Ci x Hi where, Ki potential biogas output from the ith waste Si number of ith livestock headcounts Ci Dry matter content (%) of ith material Hi gas generation efficiency of ith material based on dry matter content. Ti byproducts that can be used for biogas production Ri annual manure discharge of a livestock individual. This parameter is identified through surveys or available data for the area. To estimate the potentials, an assumption used is 100% of input materials are collected. With existing technology level, up to 75% of input materials are digested and hence, Ti= 75%. Ci and Hi are data specific to the target area and also verified in laboratories.
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As seen above, the current volume of animal husbandry waste in Vietnam may serve to create nearly 5 billion cubic meters of biogas a year if processed by different digesters. Biogas has a calorific value of about 20MJ/m3 and is a very good fuel for electricity generation or supply of heat for such internal production purposes as burning and drying in various industrial and agricultural processes or sales of electricity to the national grid as well as to adjacent household energy users. 2.1.2. Biogas from municipal wastes In addition to domestic animals wastes, biogas can also be collected through urban waste treatment. Municipal wastes in Vietnam may be grouped in four categories household, construction, industrial and medical wastes. Normally, human wastes include those emanating from individual homes, commercial facilities, offices and market places. The outstanding human wastes for each city may be calculated using the following formula: MSW = P WGR 365 1000 where, MSW is the amount of municipal solid waste (tons/year), P is the citys population (people), WGR is the per capita waste generation rate (kg/person/day), 365 is the number of days in a year, and 1000 is the conversion factor from kilogram to ton. According to the Vietnam Environmental Development 2004 report, generated waste in 2003 was 12.8 million tons, 50% of which (6.4 million tons) from urban lives. The per capita waste generation rate is in this case 0.84 kg/person/day, and is expected to be 0.95 kg/person/day by 2010. Municipal waste volumes in Vietnams cities are described in the following Table.
Table 2.3. Municipal waste generation in Vietnam, 2010 (million tons) City All cities in Vietnam Hanoi15 HCMC Haiphong Da Nang Can Tho
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2005 7.34 1.15 2.37 0.65 0.28 0.37
2010 10.54 2.01 3.15 0.83 0.40 0.44
Municipal wastes may be used to generate electricity by landfill gas collection technologies (using a landfill to collect biogas as already done in HCMC, at Go Cat dumping ground, with a power output of 2.4 MW). As seen in the above Table, by 2010, municipal solid waste accumulated from all Vietnam cities will be about 10 million tons. The five largest cities in Vietnam (Hanoi, HCMC, Haiphong, Da Nang and Can Tho) account for 67.6% of that amount (6.7 million tons). Aware of this, in the nearterm future, the government will focus on using these municipal waste sources for electricity production.16
14 15 16
The per capita waste generation rate for all municipal areas was 0.9 kg/person/day in 2005 and 0.95 kg/person/day in 2010. Waste generated in 2010 was attributed to the new Hanoi area.
Source: http://www.xaluan.com/modules.php?name=News&file=article&sid=306212, 11th Southern urban area and industrial zone environment Conference, 2011, Nov. 4, 2011, in Binh Duong.
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It is very difficult to estimate the power output generated from burning methane collected from landfills, since it depends on the specific technology, landfill techniques used, composition, physical properties (types and sizes of wastes, water contents and specific weight), and chemical properties of the wastes (vaporizing composition, fixed carbon content, carbon and nitrogen contents, calorific value and some other chemical components). Even so, the volume of methane collected from one ton of waste a year using a normal landfill technology may still be roughly calculated at 15-25 liters of gas/kg of waste a year or 100 tons of waste (with 50%-60% organic matters) may generate 11.5 MWh of electrical power.17
2.1.3. Biogas production from waste treatment processes (solid and liquid wastes) in specific food, foodstuff and beverage industries Another considerable useful biogas source is from waste treatment processes in specific food, foodstuff and beverage industries. From cassava starch plants: Vietnam cassava production output in 2010 was about 8.5 million tons. About 30% of this amount was processed in major facilities. In recent years, Vietnams cassava processing capacity has seen impressive improvements. A large number of cassava is processing projects being built and developed. There are now about 60 cassava starch processing plants of industrial scale in operation with an yearly gross capacity of more than 0.5 million tons of cassava starch, consuming nearly 2.5 million tons of fresh cassava or 21% of the total cassava output. This is double the number of plants and three times the capacity from five years ago (see a list of major plants in Appendix 1). Cassava processing discharges a huge volume of liquid and solid wastes. Management of theses wastes is compulsory and must be strictly controlled to uphold environmental standards. To date, some plants have or are going to install methane collection systems in their production chain. When this is done, the collected methane gas will be used for generation of energy such as being fuel for industrial kilns to provide heat for product drying and electricity generation (see more information on the Intimex project in Thanh Chuong district, Nghe An, Green Fields project in Quang Nam and other cassava starch plants in the section below). From alcohol and beverage factories: Similar to cassava starch processing plants, the production and brewing of alcohol and beverages discharge a large amount of solid and liquid wastes. In addition to the imperative requirement for a concentrated waste treatment facility, combined production of biogas has also been considered by the factories (see more information about beer breweries in Appendix 2). From aquatic products (shrimp, fish etc.) processing plants: Enormous liquid and solid amounts of wastes from aquatic products processing needs to be managed. A number of integrated aquatic products processing projects adopting the Clean Development Mechanism (CDM) are being reviewed in aquatic products processing centers in Mekong River Delta provinces, for example the CDM project for development of aquaculture sewage treatment and biogas collection for electricity generation (Hoai Nam Hoai Bac Ltd. Co., HCMC, as the owner) was recently commenced on Dec. 24, 2010, at Thuan An 1 aquaculture processing plant in Chau Phu district, An Giang province. This is the first CDM project in the field in the Mekong River Delta and also the first in 9 aquaculture plant wastewater treatment and biogas collection for electricity generation projects in An Giang province in phase I (2011-2012), to be followed in phase II with 12 similar projects in the remaining aquatic products processing plants in the province. The total power generating capacity from these 21 CDM
17
Source: http://urbanindia.nic.in/publicinfo/swm/chap15.pdf, Energy Recover from Municipal Solid Waste
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projects at aquatic products processing plants in An Giang province is approximately 25 MW, or equivalent to 1,177,900 tons of carbon (CO2) a year.18 A list of typical aquatic products processing plants is provided in Appendix 3. From milk processing plants: This is a similar case to cassava starch plants and aquatic products processing plants. A list of typical milk producers is given in Appendix 4. From sugar plants: Sugarcane molasses are produced in sugar plants. One ton of sugarcane can produce 0.04 tons of molasses. With 9.4 million tons of sugarcane processed in sugar plants in 2005, 0.376 million tons of molasses were produced. In accordance with the master plan for the sugarcane industry in Vietnam by 2010 and vision to 2020, the gross volume of sugarcane being processed will increase to 14.7 million tons (105,000 tons of sugarcane a day) by 2010. The amount of sugarcane molasses produced by sugar plants will be 0.588 million tons at that time. A list of typical sugar producers is provided in Appendix 5. A biogas energy market in Vietnam in the near future is apparently feasible in some key areas discussed above, with varying technologies and scales. Below is a summary of biogas energy from wastes potentials in Vietnams.19
18 Source: http://hoainamhoaibac.com/Dich-Vu/Du-an-Xu-Ly-Nuoc-Thai-Thuy-San-Thu-Hoi-Biogas-Theo-Co-Che-PhatTrien-Sach-CDM.html
The biogas potentials are estimated based on assessments of the potential annual biogas output. The annual potential biogas output from various types of input materials is calculated using the following general formula: Ki = Si x Ri x Ti x Ci x Hi; where: i ith input material Ki potential biogas output from ith material Si number of livestock headcounts or annual amount of ith waste Ri the ratio between byproducts and main products of ith material Ci dry matter content ith material Hi gas generation efficiency of ith material based on dry matter content. Ti byproducts that can be used for biogas production For human, animal and poultry feces, Ri is the amount of excrement an individual discharges in a year. Ti is a parameter identified based on survey of different uses of a specific byproduct, e.g. as fuel, animal feed, manure etc. In addition, it also depends on transport, storage and technology conditions. To estimate the potentials, an assumption used is 100% of input materials are collected. With existing technology level, up to 75% of input materials are digested and hence, Ti= 75%. Ci and Hi are data specific to the target area and also verified in laboratories (conducted by the Energy Institute).
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Table 2.4. Theoretical gross biogas potentials, 2010 Potential (million m3) 1. Wastes from food and food crop processing20 - Cassava starch processing 314.3 - Beverage production 95.6 - Aquaculture processing 314.3 - Milk, sugar and other foods 345.9 processing Subtotal 1 1070.1 2. From domestic animals wastes - Buffalo 527.5 - Cow and bull 881 - Pig 1875 - Poultry 1540 Subtotal 2 4823.5 3. From municipal wastes 1675.0 TOTAL (1+2+3) 7568.6 Material source Tons of oil equivalent (million toe) Percentage (%)
0.53505
14.1
2.41175 0.8375 3.7843
63.7 22.1 100.0
Of the overall collectible biogas potentials, biogas output from domestic animals wastes has the highest share, at about 63.7%, followed by municipal wastes at 22.1%, and about 15% of the remaining from the processing industry. Farm-based agricultural production has been recently taking shape and developed as the animal husbandry farms are growing in number and the environment concern has become more pressing. The question is how the production pattern can be modified to allow both development of farming and best use of local available material sources, without hurting the environment. In industrial scale animal husbandry farms, waste treatment using a biogas system is a good option. In addition to using different biogas technologies in domestic animals waste treatment, this technology also has a clear potential in municipal waste treatment (primarily in major cities like Hanoi, HCMC, Da Nang, Can Tho, Haiphong etc.), waste treatment in aquatic products processing, animal feed production, sugar making, cassava starch production, food and beverage production and others. These are also potential areas for use of methane collection technology in waste treatment at medium, large and mega industrial scales. Of course, to develop biogas technologies, apart from the availability of technology and businesses needs (meeting the requirements on emission to the surrounding environment), a very important factor to take into consideration is the markets for the products (electricity, heat, greenhouse gas abatement certificates). For the time being, the government and relevant ministries have been working out strategies and policies to promote green development, low-carbon technologies and in particular, finalizing a framework pathway for the development of renewable energy in Vietnam in the near future. As discussed above, in light of increasing energy demand in Vietnam and limited local energy supply capacity (coal for electricity production likely to be imported from after 2015), whereas the potential for biogas sources in Vietnam is enormous, coupled with very high demand for electrical
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Rough estimates only, since no official data or controlled tests were available or done.
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power and heat for production, the opportunity of using available biogas resources for electricity generation and co-generation (CHP) is very real, both in terms of technology and economic and environmental considerations. In such context, the Prime Minister Decision 1208, approving the 7th master scheme for electricity development (2011-2020, vision to 2030) will be the foundation for biomass/biogas energy development in Vietnam. A plan associated with biogas development is being drafted with goals and schedules summarized in the following table.
Table 2.5. Summary of expected electricity generation capacity from biogas and municipal wastes to be added to the grid (MW)21 2011-2020 Total renewable energy Municipal wastes (landfill and direct incineration technologies) + other biogas Biomass (solid) Other renewable energies 3,606 174 355 3,077 2021-2030 9,588 265 1,500 7,823 2011-2030 13,194 439 1,855 10,900
2.2. Use of biogas in Vietnam

Biogas technologies were first used in Vietnam in early years of the 1960s. The development process of biogas and its application may be summarized as below: First phase (phase I), 1960-1975: primitive stage, mostly research for adaptability and applicability; the results however were less than expected. Some tiny scale facilities were built, scattering in various provinces, with little efficiency. By early 1970, research was almost forgotten. Phase II (1976-1980): after 1975, biogas regained attention in light of the mineral oil crisis and social development needs. The Energy Institute, Ministry of Electricity and Coal, was asked to initiate the Use of biogas in Vietnam project, and later in 1977, the project for Research and development of methane fermentation tanks. Ever since, biogas was made a formal part of the national research agenda. In addition to the Energy Institute, some other research institutions have also been interested in biogas, including the Soil and Fertilizers Research Institute, Animal Husbandry Institute, HCMC Agriculture and Forestry University, Can Tho University, among others. Phase III (1981-1990): through two 5-year plans of 1981-1985 and 1986-1990, biogas was a regular top priority in a new national energy program, which was Program 52C, under the auspices of the Ministry of Higher Education. Many biogas studies were very successful and more agencies and universities joined the research along with the Energy Institute. Major projects were found in Ho Chi Minh City with 700 projects, Dong Nai with 468 projects, Hau Giang with 240 projects, as there were about 2,000 small sized facilities of 2-10 m3 and a few larger facilities of 100-200 m3 volume using normal and simple anaerobic fermentation technology. Phase IV (1991-2002): when Program 52C was terminated, no national focal agencies seemed
N.D. Cuong, 2011, Energy Institute, proposal of Master plan for renewable energy development in Vietnam by 2020 and vision to 2030.
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to pay attention to biogas. The Energy Institute continued its own researches as part of ministerial and corporate level projects. The researches mostly focused on improvement of type NL-5 fixed dome cover facilities, experiment of a number of new models, the digestion process of plant materials, diversifying use of gases and so on. In this period, biogas strongly developed in rural water and sanitation projects, gardening programs etc. In March 2002, the Ministry of Agriculture and Rural Development released industry grade standards for small sized biogas projects. Phase V (2003 to present): this is the time of strongest biogas development in all areas of agriculture, industry and urban contexts, and with all sizes from small to medium and large. The Energy Institute is still the lead agency in biogas research and development. By far, there have been over 200,000 projects under construction, 60% of which using the Energy Institutes model, followed by other models from Can Tho University, HCMC Agriculture and Forestry University and others. These are however all small-sized biogas projects, mostly suitable for households raising pigs. The size of biogas digester varies within 5-25 m3.
As for medium and larger sized biogas projects, there are now two main demonstrated technologies: UASB systems and covered anaerobic ponds. Application however remains small scaled and little. A survey on users of biogas22 indicates two key purposes of using biogas: (i) for heating (with dominantly over 90% of produced biogas), and (ii) for electricity generation based on internal combustion generators available in the market with modified carburetors. Only one single large sized power generating facility of 2.4 MW was installed in Go Cat dumping ground. Heating use includes household cooking, lighting and sometimes keeping warm. Biogas usage is illustrated in the following Figure.
22
Energy Institute, 2005, and T. V. Dung, H. V. Hung et al, 2007-2008, Biogas user survey.
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Figure 2.1. Current uses of biogas
Biogas
Heating
Small-sized power generation
Cooking
Lighting
Keeping warm
Biogas-fired generator
(i) Use of biogas for heating Cooking is the most common form of biogas use for heating. Biogas cookers are made locally or imported from China. A few biogas development companies or LPG cooker dealers import spare parts from China or LPG cooker manufacturers to build modified biogas cookers. Experiments show that locally made single stoves consume 0.22-0.40 m3 of biogas per hour while twin imported or modified LPG-based cookers consumes about 0.30-0.70 m3 of biogas per hour. The per capita household need of gas, given the long tradition of cooking and other daily uses of rural dwellers in Vietnam, is estimated at about 0.15-0.30 m3 of biogas/person/day. A 6-member household therefore needs at least 0.9-1.8 m3 of biogas a day and hence a facility of 5 m3 and above capacity and a livestock herd of 6-10 pigs or 2 buffalos or cows (see details in the Table below).
Table 2.6. Gas consumption by system size23

Unit: m3 biogas/m3 of system size
System size Biogas use Consumption 5 0.19 > 5-10 0.10 >10-15 0.15 >15 0.80
Source: Energy Institute, Biogas user survey, 2005.
The second biogas heat use is for lighting using network lamps. These network lamps are imported from China and consume about 0.07-0.10 m3 of biogas per hour. Network lamps also require a minimum gas pressure of a 200-700 mm water column; the higher the pressure the brighter the lamps. Households using biogas for lighting are still few in numbers, accounting for only about 2% of the households having biogas installations (by Biogas user survey report, 2005, Energy Institute). Low use of biogas for lighting may be explained by the availability of grid power and lamps imported from
23
Biogas user survey report, 2005, Energy Institute.
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China often have poor quality. Lamp spare parts such as mantles, honeycomb filters and so on are not readily available in the market. Figure 2.2. Biogas lamp (illustration)
Other uses in heating include boiling water sing China imported water heaters or modified LPG cookers. This use is also very low, at less than 1%. Use of biogas for business and household production purposes such as animal husbandry, handicraft and processing is not yet common since the gas supply from small sized facilities is often only enough for cooking, and for production purposes, facilities of larger sizes will be needed depending on types of use and gas consumption. Also according to the Biogas user survey 2005 of the Energy Institute, biogas use for production purposes like making pig feed, rice noodle and pancakes in rural areas takes up about 6% of all uses by households having a biogas facility. Some other biogas uses such as for keeping piglets, small chickens warm in winter, running freezers, maintenance of fruits and cereals, and incubating poultry eggs have only been restricted to research, experiment or demonstration, and not yet replicated. (ii) Use of biogas for electricity generation Use of biogas for electricity generation has been in existence in recent years, though still at small scales. The Energy Institute, HCMC Technology University and Da Nang Technology University are some of the most successful names in building small sized biogas-fired generators of 0.5-20 kW. These researching efforts however have been just limited to modification of gasoline or diesel-fueled 4-stroke engines for biogas compatibility, and not creation of machines running directly on biogas. The advantage of modified engines is reasonable costs, not too sophisticated modification and installation, and users familiarity with these machines from previous uses. The weakness of these machines is that they do not have a gas filter while biogas is a mixture of steam saturated gases and such gases as H2S and NOx may easily combine with water to turn into acids causing corrosion to metal parts of the generators, reducing the equipments life longevity. The efficiency of these machines is also not very high (20%-25%), and they need gas bags to stabilize gas pressure while in operation.
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While the biogas supply is available, use of biogas for electricity generation at household scale remains very low, with only about 500 out of a total of 200,000 biogas facilities installed. Below are some biogas-based models for farm-scale power generators in Southern provinces. A farm-scale biogas generator has five key components: 1) the biogas facility, 2) gas filter system, 3) gas bag to stabilize gas pressure while the generator is running, 4) generator, and 5) control system. Biogas generated in the biogas forming instrument is routed through a filter to remove unwanted gases before the cleaned gas is led to the pressure stabilizing gas bag and subsequently the generator. Figure 2.3. Biogas-fired power generating system
Studies by the Energy Institute indicate that gasoline or diesel-fired 4-stroke engines can all be modified to run on biogas. A gasoline generator modified to run on biogas or as a hybrid unit consumes 0.6-0.7 m3 of biogas for 1 kWh or power generated. Capacity need of a farm is often 8-20 kW. The most common power generators today are those within the capacity range of 2.2-20 KW and capable of running 6-10 hours a day. Therefore, biogas instruments of 30-200 m3 capacity or higher will be suitable for power generation. As the electrical power generated by biogas-based machines are alternating currents, it can be connected directly to the distribution system of the regular power grid or used in an independent distribution system.
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Box 1. Use of biogas highly efficient for breeders24 Use of biogas energy: As part of events in the lead up to the World Intellectual Property Day this year, Dong Nai Department of Science and Technology visited the model biogas energy facility using pig manure at Mr. Pham Van Ngus Dong Tam ranch (Bach Lam 1 village, Gia Tan 2 commune, Thong Nhat district). Ngu told the visitors that he used biogas to run a generator and thus saved up to VND 7-8 million a month of electricity bill for the farm, while also having sufficient, if not abundant, heat for other uses. More important, this helps prevent pollution since it absorbs the massive amount of pig manure generated in the ranch. The biogas system operator at Dong Tam ranch described the process as follows: When the biogas tank is filled with pig manure, gases are created from the pig manure in a anaerobic environment and are led into two vinyl containers, each 10 meters in length and 1.5 meters in diameter. A modified diesel-fired engine, with the injection nozzle replaced with a spark plug and the air filter replaced with a carburetor (where the biogas fills up before being injected to the combustion chamber). When the engine is started, a 12 V battery activates the IC unit, which creates electricity for the spark plug to ignite and burn the biogas inside the combustion chamber, moving the piston nonstop. When the running engine is hooked up with an alternator, the more the valve is open, the more biogas will flow in, powering up the engine and generating up to a 220 V electrical current. As this is a diesel type engine, it needs a liquid cooling system while it runs. Ngu added that using biogas is not only environment-friendly and cost-efficient but also gives him more freedom in household and production activities. With his 2,000-plus pig count ranch, Ngu is among the pioneers in using biogas for electricity generation in Dong Nai province.
2.3. Overview of biogas projects in Vietnam

Based on the sizes in capacity of biogas equipment and users, on-going biogas projects in Vietnam may be grouped in two categories: (i) small sized, fit for breeding households, and (ii) medium and large sized, fit for concentrated pig farm and production waste treatment. Current sizebased classification often focuses on the volume of the digester tank. By the Ministry of Agriculture and Rural Developments standard 10 TCN 97 102:2006, for small sized biogas instruments, only biogas systems with digester tank volume of 40 m3 are accounted for. Below is some reference information on how biogas systems are classified in China or recommendations of some local prestigious institutions in terms of biogas technology.
24
Source: dongnai.gov.vn
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Table 2.7. Classification of biogas systems as recommended by local prestigious institutions in terms of biogas technology Origin Size Large China Biogas Technology Center (BTC) Biogas component, QSEAP project Medium Small (household) Large Small (household) Large Medium Small (household) Total volume (m3) 1000 100 - 1000 < 100 100 < 10 0 > 1000 > 50 1000 50 Volume of one tank (m3) 500 100 - 500 < 100 100 < 100
If classified as above mentioned, biogas projects in Vietnam with updated status to date may be described as follows (section 2.3.1).
2.3.1. Small sized household biogas projects The project supporting the biogas program for animal husbandry in Vietnam started in 2003. This is the largest scale and coverage in the field, with financial support from the Netherlands government and the Animal Husbandry Administration, Ministry of Agriculture and Rural Development as the focal agency. The project has two stages. In Stage I, the project is underway in 12 selected provinces aiming to build 12,000 small-household biogas systems with input materials of animal husbandry wastes (pig manure). The technology used in this project includes fixed dome cover biogas systems, KT1 and KT2 models (see Figure 2.4 below). Figure 2.4. KT 1 and KT2 models25
KT1 model
25
1. Inlet tank, 2. Inlet hose, 3. Digester tank, 4. Gas collecting hose, 5. Outlet hose, 6. Pressure regulator tank.
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KT2 model
At the end of phase I in 2005, 18,000 systems were built. In the transitional period in 2006, the project coverage was expanded to 20 provinces and 9,600 more systems were developed, raising the total to 27,600 facilities. The total project investment is USD 9,194,076, including 57.3% of beneficiary contribution, 39.2% of ODA fund and 3.5% of provincial level counterpart fund. The project has been successful owing to two essential factors: (i) management, and (ii) quality assured construction work for every system. The project has a central office based in Hanoi and 20 provincial offices in participating provinces. Phase II continued from 2006 to the end of 2011. The overall goal of the project in this phase is to develop a sustainable, market-oriented biogas sector. Project objectives include: Existence in 50 out of 64 province and cities in the country; Development of about 150,000 biogas systems.
In addition to this biogas project applicable to breeding households as mentioned above, there are also some parallel projects of similar nature but with smaller scales (mostly focusing on specific locations such as districts, communes or residential areas). These projects are also often public private partnerships, meaning a part of the cost is covered by public or corporate funding (mostly in terms of technology, training and technical transfer, with some material and supply support, about 305-50%), and the remaining to be covered by household pocket money. Apart from the funding from relevant ministries and agencies, these efforts are mostly supported through target programs or annual researches of the line agencies, such as the Ministry of Industry and Trades national target program for energy saving and efficiency, the Ministry of Agriculture and Rural Developments water and sanitation program, among others.
2.3.2. Medium and large sized biogas projects There are currently about 20 completed, on-going or planned for medium to large sized projects for biogas collection from waste treatment (in animal husbandry, forestry-agricultureaquaculture production etc.). Information about some of these projects has been recently mustered and summarized in the following section and Table 2.8. Green Field Joint-stock Co. based in Quang Nam province has engaged in a project to produce 65% of methane gas from the waste treatment process of the biofuel workshop (making ethanol from cassava) with a capacity of 100,000-120,000 m3 a day, to collect methane for electricity generation. The project cost is estimated at about USD 5.3 million (not including equipment transportation cost). Recently, to alleviate serious pollution from the stench of wastewater, FOCOCEV Cassava Starch Joint-stock Co. (Hinh River district, Phu Yen province) resorted to the anaerobic wastewater treatment technology. In the process, organic matters digested by microorganisms help reduce
30
pollution while creating biogas. This biogas is recovered and burned in boilers in place of the plants anthracite coal energy supply. Methane collection for electricity generation in aquaculture production is an approach being aimed at by Clean Development Mechanism (CDM) investors. The CDM biogas collection from aquaculture production wastewater treatment project initiated by the HCMC-based Hoai Nam Hoai Bac Ltd. Co. commenced on Dec. 24, 2010 at Thuan An 1 Aquatic Products Processing Plant, Chau Phu District, An Giang province. This is the first CDM project in the field in the Mekong River Delta, and also the first of 9 wastewater treatment projects in different aquaculture plants in the area for electricity generating biogas collection in An Giang province (phase 1 expected to commence from 2011), with a phase 2 consisting of 12 similar projects in the remaining aquaculture plants in the province. The estimated gross power capacity from the 21 CDM projects in aquaculture plant in An Giang province is about 25 MW, equivalent to a cut-down of 1,177,900 tons of carbon (CO2) a year. The German national electricity group also promised to buy all Certified Emission Reductions (CERs) these CDM projects obtain from aquatic waste treatment in An Giang province once the power generating systems are in operation.26 Also in An Giang province, there is another CDM project for pig farm wastewater treatment (each farm with 50 pigs or more), for a total of 37 farms and a pig herd of nearly 6,000 individuals. Each of these farms is a sub-project that collects gas from pig breeding wastes for heating fuels and electricity generation used right in the farm. The Swedish Energy Institute supported the project, pledging to buy CERs from the project at the initial ask price of USD 10/ton of CO2. The project cost is about VND 150 billion from An Giang provincial PC, Hoai Nam Hoai Bac Ltd. Co. and Swedish Energy Institute. The generated energy in the form of biogas will be used as fuel and provided free of charge to farm owners, and the electricity generated from the biogas will be sold to farm owners at lower prices than EVNs levels. The project is estimated to cut 37,000 tons of CO2 emission a year and produce a power capacity of 14,500 kWh a day. In addition to CDM projects in aquaculture, there is another CDM project in An Giang using the Low temperature conversion (LTC) waste treatment technology. The 25 MW capacity power plant uses input materials being human waste of about 300 tons a day, with CO2 volume equivalent to aquatic CDM projects in the province. The project is expected to commence after 2012 and, following two years of construction, start operation to effectively solve the waste puzzle in Chau Doc, Chau Phu and Tinh Bien areas of An Giang province. The project has a total investment fund of about USD 200 million, or VND 3,926 billion. It is financed by the German MBM financial group and counterpart fund from Hoai Nam Hoai Bac Ltd. Co. (HCMC), as a co-owner of the project. The German national electricity group has also agreed to buy the entire CERs acquired by this project.
26
Source: This information is readily available in various websites in Vietnam.
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Table 2.8. Medium and large sized biogas projects Area of operation Livestock and poultry breeding Company, location 1. Thai Duong Imported Pig Breed JS Co. Location: Lng, Ngh an 2. Pig farm Location: Yn bnh Lng Sn, Ho bnh 3. Pig farm Location: an hoi Location: an phng, Hanoi 4. Co Dong, Son Tay Animal Husbandry services cooperative Location: Co Dong, Son Tay, Hanoi Cassava processing 5. Phu Tho cassava starch plant Location: Ph th Capacity Processing 150,000 m3 of wastewater a day to collect methane Processing 1,500 m3 of wastewater a day to collect methane Processing 150 m3 of wastewater a day to collect methane Processing 4,000 m3, 3,000 m3, 2,000 m3, 750 m3 and 800 m3 of wastewater a day to collect methane Processing 15,000 m3 of wastewater a day to collect methane Processing 3,500 m3 of wastewater a day to collect methane Technology used Covered lagoon Estimated time 2007
Covered lagoon
2007
Prefabricated composite dome tank, KT3-1 model Covered lagoon
2007
2008-2010
Covered lagoon
2009
6. Cassava starch plant; Location: Tinh Phong IP, Agroproduct and Food JS Co. Qung Ngi 7. Dung Quat alcoholbiogas plant Location: Dung Quat IP, Quang Ngai
Upflow anaerobic sludge blanket digestion (UASB) EGSB
2009
Sugar production
8. Alcohol plant, Lam Son Sugarcane Co. Location: Lam sn, Thanh ho
Processing 300,000 m3 of wastewater a day; Estimated gas output: 80,00090,000m3 of biogas/day Processing 900 m3 of wastewater a day to collect methane
7/2011
Upflow anaerobic sludge blanket digestion (UASB) combined with Structured media attached growth (SMAG)
2003
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Aquatic production
9. CDM methane collection from wastewater treatment project at Thuan An 1 aquaculture plant, Chau Phu dist., An Giang prov.
Processing 100,000 m3 of wastewater a day; Estimated gas output: 25,000m3 of biogas/day
Alcohol production
10. South East Asia Beer Brewery Location: Hanoi
Processing 600 m3 of wastewater a day to collect methane 600m3/day Processing 360 m3 of wastewater a day to collect methane
Upflow anaerobic sludge blanket digestion (UASB) combined with Structured media attached growth (SMAG) Upflow anaerobic sludge blanket digestion (UASB) Upflow anaerobic sludge blanket digestion (UASB) HDPE canvasing and gas collection piping
2010
2003
11. Alcohol and liquor factory Location: Bnh nh.
2009
Municipal waste
12. Go Cat waste-to-energy power plant Location: Ho Chi Minh City
13. Nam Son waste-toenergy power plant Location: Hanoi 14. Dong Thach waste-toenergy power plant Location: Ho Chi Minh City 15. Phuoc Hiep 1 waste-toenergy power plant Location: Ho Chi Minh City 16. Da Mai Tan waste-toenergy power plant Location: Thai Nguyen City
Estimated gas output: 410m3 of biogas/day Installed capacity: 3 generators of 2.4 MW capacity Installed capacity: 3.5 MW
2007
Capacity: 8 mil. of wastes/year Power output: 28,000 MWh/year Power output: 14,000 MWh/year
Capacity: 450,000 tons of waste; Power output: 1,360 MWh/year
HDPE canvasing and gas collection piping HDPE canvasing and gas collection piping HDPE canvasing and gas collection piping HDPE canvasing and gas collection piping
2009
2009
2009
2009
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17. Trang Cat waste-toenergy power plant Location: Haiphong City
Capacity: 1,1 tons of waste; Power output: 2,800 MWh/year Capacity: 540,000 tons of waste; Power output: 1,630 MWh/year
18. Thuy Phuong waste-toenergy power plant Location: Hue City
Technology: HDPE canvasing and gas collection piping Technology: HDPE canvasing and gas collection piping Technology: HDPE canvasing and gas collection piping
2010
2009
19. Khanh Son waste-toenergy power plant Location: Da Nang City
Capacity: 1,4 tons of waste; Power output: 3,200 MWh/year
2010
2.4. Information about partnership in biogas development between Vietnam and foreign parties
There are currently three forms of partnership in the field of biogas in Vietnam: (i) Government and foreign organization funding for demonstration projects or policy making and market promotion; (ii) taking part in waste treatment methane collection projects; and (iii) provision of equipment and technology. 2.4.1. Government and foreign organization funding for demonstration projects or policy making and market promotion; Biogas development project supported by the Asian Development Bank (ADB). The Ministry of Agriculture and Rural Development is the local stakeholder.
This project aims to improve the quality and safety of agricultural products and promote biogas development (QSEAP for short) and will be implemented in 16 provinces and cities and ended by June 2015.27 This project is part of a USD 95 million loan agreement out of a total project investment capital of over USD 110.4 million. The purpose of the project is to increase the safety and quality of agricultural commercial products from Vietnam, while providing a clean energy source in place of fossil energy through the development of biogas. The project is scheduled for 2009-2015 in the three major cities of Ho Chi Minh, Hanoi and Da Nang and 13 provinces with the largest share of vegetables, fruits and tea in the country, including Bac Giang, Ben Tre, Binh Thuan, Hai Duong, Lam Dong, Ninh Thuan, Phu Tho, Son La, Thai Nguyen, Tien Giang, Vinh Phuc and Yen Bai. The project has four components: Development of the regulatory framework and establishment of a working safety and quality control system for agricultural products; upgrade of
27
Based on the Governments website, Dec. 2, 2009.
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infrastructure and equipment to support safety and quality control of agricultural products; mitigation of animal husbandry waste through development of biogas and improvement of project management. In addition, to support project management and the development of the biogas program, ADB also provides technical assistance for the project worth USD 1.5 million. The QSEAP project has also been planned to be integrated in phase 2 of the Science and Technology project (AST) under a new title called Low Carbon Agriculture Support project (LCASP). This idea was raised by ADB in the discussion with the Ministry of Agriculture and Rural Development in March 2011 and was accepted by the latter in August 2011. The newly proposed project has three major focuses. First, LCASP does not concentrate on household scale biogas systems but instead on more professional and advanced biogas systems for medium and large sized animal husbandry farms in Vietnam. Second, biogas projects are only viewed as an integrated part of a comprehensive breeding waste management system. Third, the proposed project will focus on capacity building at all levels to create sustainability for subsequent expansion of the approach elsewhere. Biogas program for the animal husbandry sector support project This project was initiated by the Netherlands government and the local key stakeholder was the Animal Husbandry Administration of the Ministry of Agriculture and Rural Development. Started in 2003, the project was implemented in two phases. At the end of phase I in 2005, 18,000 systems were built. Phase II continued from 2006 to the end of 2011. The overall goal of the project in this phase is to develop a sustainable, market-oriented biogas sector. Project objectives include: Existence in 50 out of 64 province and cities in the country; Development of about 150,000 biogas systems.
The total project investment is USD 9,194,076, including 57.3% of beneficiary contribution, 39.2% of ODA fund and 3.5% of provincial level counterpart fund. The project has a central office based in Hanoi and 20 provincial offices in participating provinces. By far, this is the largest household biogas development initiative in Vietnam. Livestock waste management project: The Livestock waste management in East Asia project (LWMEA) is supported by the Global Environment Fund (GEF) through the World Bank (WB). In Vietnam, LWMEA is implemented by the Institute of Natural Resources and Environment Strategy and Policy, Ministry of Natural Resources and Environment. The project aims to support participating countries to collectively work to alleviate the adverse effects on the environment and human health of water source pollution from animal husbandry. This is especially the case as such effects are increasing fast in concentrated breeding areas near water sources. The benefits on the global environment that the project helps create is reduction of soil and environment pollution in littoral areas. External support is distributed among three key components: Development and dissemination of methane mitigating technologies and practices: (i) identifying and developing practices and technologies to effectively reduce methane emission applicable to livestock waste management in ranches located in the project areas;
35
(ii) sharing these practices and technologies to other stakeholders, policy makers, experts, the private sector, producers and service providers; Review of policies on renewable energy and market development: (i) conducting targeted studies to identify existing hindrances marketing products made with greenhouse gas alleviation technologies; (ii) conducting policy review at the national and sub-national levels, to develop policies promoting commercial use of biogas energy; Awareness education campaign targeting local residents; training and support fund management: (i) workshops with the participation of key stakeholders to disseminate study findings on renewable energy and renewable energy market development; promote coordination between government agencies responsible for livestock waste management and cut down greenhouse gas discharge; (ii) provide training and workshops for pig farm owners in the project areas; and (iii) develop software, publications and other forms of experience sharing to be used in education and awareness campaigns.
In Vietnam, the LWMEA project was underway from September 2006, with the Resources and Environment Strategy and Policy Institute, Ministry of Natural Resources and Environment, as the key implementer. The project aims to mitigate the adverse effects on the environment and human health, which are increasing fast in concentrated breeding areas near water sources. In addition, it also has a broader purpose of cutting soil pollution and environmental depreciation in the China Sea and Thailand Bay. As part of its broad activities, LWMEA assists the development of demonstration practices in livestock waste management and awareness raising for the community on environmental protection in animal husbandry. In the last few years, LWMEA supported the development of 3 model biogas tanks (of community and household scales) for livestock waste management in Tu Duong village, To Hieu commune, Thuong Tin district, Hanoi (former Ha Tay province). In addition to environmental improvement and alleviation of the damaging effects of waste to the environment and human health, these systems also provide fuel gas for cooking, lighting and electricity generation. The project also delivers multiple training and education activities to raise public awareness on environmental protection in livestock breeding. Project to introduce medium sized plug flow digester equipment to the biogas market in Vietnam, financed by the Finish Ministry of Foreign Affairs and Nordic Development Fund.
The project Introducing medium-sized plug flow digester equipment to the biogas market in Vietnam is part of the Energy & Environment Partnerships (EEP-Mekong) program. The project is scheduled for 2009-2012 with financial support from the Finish Ministry of Foreign Affairs and Nordic Development Fund. The key purpose of the project is to plan and develop the market in Vietnam for medium-sized plug flow digester equipment for biogas collection through the introduction, demonstration and presentation of economic efficiency of 10 sample systems in 10 pig farms in Vietnam. The project involves four partners, the Netherlands SNV, Energy Institute, Stockholm Environment Institute (SEI) and Global Energy Consultancy Investment and Trading Company (GECI). Expected outputs include: 10 medium-sized digester systems to be designed and built to collect methane for reduction of
36
greenhouse gas emission; Training materials developed; Efficiency assessments made; Use of biogas and wastes from the digestion process optimized.
The total support fund is 286,000 Euros, including 191,500 Euros from EEP and the remaining from the four other stakeholders (exclusive of contributions from the pig farms for building digester equipment). The project life cycle is 18 months, starting from June 2011.
2.4.2. Partnership type (ii) taking part in waste treatment methane collection projects; and (iii) provision of equipment and technology. In this form of partnership, international stakeholders will directly or indirectly get involved in the development of the project (prefeasibility) study, project (feasibility) outline and/or provision of equipment. Unfortunately, detailed information about specific types of partnership and company names are not readily available. Below is some background information about business cooperation in waste management for biogas collection to produce energy. Table 2.9. Projects with a foreign partner in medium and large sized biogas collection Company, location 1. Thai Duong Imported Pig Breed JS Co. Location: Lng, Ngh an 2. Cassava starch plant; Location: Tinh Phong IP, Agroproduct and Food JS Co. Qung Ngi 3. Dung Quat alcohol-biogas plant Location: Dung Quat IP, Quang Ngai 4. Alcohol plant, Lam Son Sugarcane Co. Location: Lam Sn, Thanh Ho 5. Alcohol and liquor factory Location: Bnh nh. Capacity 150,000 m3 of wastewater a day Technology used Covered lagoon Partner Thailand Vietnam
3,500 m3 of wastewater a day
Upflow anaerobic sludge blanket digestion (UASB)
Vietnam Thailand
300,000 m3 of wastewater a day Estimated gas output: 80,000-90,000m3 of biogas/day 900 m3/day
EGSB
Vietnam China
360 m3 of wastewater a day
Upflow anaerobic sludge blanket digestion (UASB) combined with Structured media attached growth (SMAG) Upflow anaerobic sludge blanket digestion (UASB)
2003, Vietnam India
Partner: China
6. Go Cat waste-to-energy power plant Location: Ho Chi Minh City
Estimated gas output: 410 m3 of biogas/day Installed capacity: 3 generators of 2.4 MW capacity Installed capacity: 3.5 MW
HDPE canvasing and gas collection piping
Partner: the Netherlands
7. Nam Son waste-to-energy power plant Location: Hanoi
Partner: Japan
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8. Dong Thach waste-toenergy power plant Location: Ho Chi Minh City
Capacity: 8 mil. of wastes/year Power output: 28,000 MWh/year Power output: 14,000 MWh/year
9. Phuoc Hiep 1 waste-toenergy power plant Location: Ho Chi Minh City 10. Trang Cat waste-toenergy power plant Location: Haiphong City 11. Thuy Phuong waste-toenergy power plant Location: Hue City 12. Khanh Son waste-toenergy power plant Location: Da Nang City
Partner: the Netherlands Partner: Japan
Capacity: 1,1 tons of waste Power output: 2,800 MWh/year Capacity: 540,000 tons of waste Power output: 1,630 MWh/year Capacity: 1,4 tons of waste Power output: 3,200 MWh/year
Technology: HDPE canvasing and gas collection piping Technology: HDPE canvasing and gas collection piping Technology: HDPE canvasing and gas collection piping
Partner: Japan
2.5. Economics of biogas projects

A characteristic difference between biogas projects and other energy projects is that the environment element (pollution management efficiency) is often a top priority. The economics of biogas projects therefore needs to be integrated with environmental effects (environmental cost/the price to pay environmentally as well as taxes/fees levied on environmental management). Nevertheless, estimation of environmental costs in Vietnam is still in a premature stage (which may be the biggest difference from developed countries). As a result, the products of biogas technologies being the collected methane or amounts of energy produced (heat/electrical power) do not often reflect the real value of the projects. This is a weakness of the energy and environment market in Vietnam. While this issue is under consideration, it is almost certain that a more time is needed for a transitional phase where a competitive energy market and the environment-economy mechanism become fully operational. Like any other development projects, such as building a power plant or biogas cogeneration, the investors need to consider the financial-economic viability prior to project commencement. A biogas project also needs analyses and assessments on costs (investment cost, capital cost, maintenance cost) and sales prospects. The following section provides some outline analyses on the economics of biomass projects in Vietnam. It should be noted that the information about costs and sales provided here should be used as reference only when reviewing a project. Accurate information can only be acquired based on real data from equipment manufacturers, development cost, environmental cost and sales prices of project products such as heat, electricity and certificates for pollution/emission reduction of CO2, NOx, SOx, and so on.
2.5.1. Investment cost

A project investment cost (capital cost or initial cost) encompasses the costs for equipment, installation and construction, project design and management, and other costs.
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Equipment cost: equipment procurement, including transportation of equipment to the project site. These costs depend on the scale and composition of the system, technical specifications, quality and efficiency of the equipment. Construction, installation cost: land lease, site clearance, labor, equipment installation etc. Project design and management cost: preparation of feasibility study, engineering design and construction design, construction management, environment impact assessment, application for permits, construction consultancy, training, other administrative fees; Other costs: taxes, insurance fees during construction, financing arrangement costs (e.g. interest, banking fees, loan guarantee fees). As discussed above, the investment cost of a biogas project depends on various factors that are unique to the specific project, including scale (large or small size), location, types of wastes, composition and properties of the wastes in question, gas generation efficiency, among others. The costs summarized below may not be suitable for use in a specific project, but are good for reference. For this purpose, the data on investment costs provided here are summarized from reviews of a number of proposed projects in Vietnam. Below is an example of the economics of a biogas project that is part of a wastewater treatment project (WWTP) for a 1,800 m3/day fresh cassava-to-ethanol plant.28 The wastewater treatment system is also ideally designed to cut construction costs, and to provide simplicity and reliability in operation and maintenance. The WWTP project involved equipment, the electrical system of the target zone and civil engineering work. The wastewater treatment system includes a wastewater collection system; preliminary treatment, pH control system, acid-based treatment, anaerobic biological treatment, waste fermentation treatment using an UASB system, biogas collection, sludge collection, sludge discharge and storage, a WWTP system with a capacity of 1,800 m3 a day, suitable for a 60,000 liters/day ethanol plant and a wastewater volume of 1,000 m3/day discharged from the cassava starch workshop. Table 2.10. Waste specifications of the ethanol plant Description Wastewater from the ethanol plant Other wastewater Wastewater from the cassava starch workshop m3/ day 600 200 1,000 CODcr (mg/l) 50,000 1,500 10,000 BOD5 (mg/l) 30,000 800 5,500 SS (mg/l) 40,000 2,000 4,000 pH 4-5.5 6-8 4-5.5 Temperature (oC) 80 -
28
Source: Environment impact assessment approved by Hoa Binh provincial PC (Decision 690/Q-UBND, May 4, 2010), as part of the project Ethanol biofuel plant Phu My-Hoa Binh MTV Co. Ltd., Phu My Solemember Co. Ltd., Hoa Binh, Address: Phong Phu commune, Tan Lac dist., Hoa Binh prov.; Business registration certificate No. 5400242080, issued by Hoa Binh Department of Planning and Investment, on Apr. 4, 2006.
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Table 2.11. Discharged wastewater standards in Vietnam No 1 2 3 4 Criteria CODCr (mg/l) BOD5 (mg/l) SS (mg/l) pH Standard 80 50 150 6.0-9.0
The wastewater treatment process encompasses: Physical method: Solid-liquid separation Biological method (combined anaerobic and aerobic sequences) The factors that mostly likely affect the use of these methods are running costs and the cost for disposal of wastes to the environment. To cut operating costs, based on the lessons drawn from a variety of wastewater treatment projects, we choose two methods: 1. Physical method: Solid-liquid separation 2. Biological method (combined anaerobic and aerobic sequences).
Using in combination these two methods, post-treatment wastewater will meet prescribed emission standards while allowing recovery of useful biogas for use in the boiler system to reduce coal input and cut production costs. The combined anaerobic-aerobic treatment technology is used for the biological treatment process, featuring anaerobic reactive tanks, anaerobic fermentation tanks and UASB tanks, adopting advanced technologies and SBR. The sequencing batch reactor - activated sludge batch (SBR) technology has been widely used in the biological treatment process. SBR works through batch activation to maintain regular liquid circulation, bubbling, depositing as centrifugal instruments separate sludge from the wastewater, which is then channeled to a depositing tank for further treatment. To collect methane gas (biogas) from this system, a large 500 m3 tank will be used. This tank has a floating cover and redundant gas burning system for safety purposes. Below is a diagram of the waste treatment and biogas collection system.
40
High capacity anaerobic reactors, including EGSB reactor tanks, are suitable for treatment of wastewater with low organic matter density and internal circulation reactors (ICRs) are used widely in
41
the UASB (upflow anaerobic sludge blanket) type technology, with anaerobic biological filters (AFs) used to assist HAR-type reactors. Wastes from the ethanol plant going through the twinning anaerobic and aerobic treatment system will achieve the prescribed standards for discharged wastes. The sludge treatment process: from sludge aerobic biological treatment (SBR with floats) to centrifugal liquid-sludge separator. Biogas collection system: biogas is collected in the IC reactor, then treated for liquid separation, sulfur removal, and stored in the storage tank for use in boilers. Table 2.12. Electricity consumption of a 1,800 m3/day WWTP system No 1 2 3 4 5 6 7 8 9 10 11 12 Electrical equipment Pressure pump Anaerobic circulating pump Centrifugal instrument W430W Cooling high pressure pump Adjusting screw Float Pressure pump Pressure pump Fan Filter tank inlet pump Filter tank reverse wash pump Others (lighting etc.) Total Consumption (kW) 11.0 30.0 44.5 11.0 5.5 35.0 15.0 11.0 37.0 11.0 15.0 Qtty 2 2 3 2 2 2 3 2 4 2 1 Gross consumption (kW) 22.0 60.0 133.5 22.0 11.0 70.0 45.0 22.0 148.0 22.0 15.0 15.0 585.5 Real consumption (kW) 11.0 30.0 133.5 11.0 11.0 30.0 7.5 11.0 74.0 11.0 5.0 15.0 386.5
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Table 2.13. Components and construction requirements for a wastewater treatment system No 1 2 3 4 5 6 7 8 9 10 11 12 Description Regulator tank Residue storage tank Middle tank 1 Middle tank 2 Middle tank 3 Middle tank 4 Sludge regulator tank Middle tank 5 Filter tank Clean water tank Operator, worker room Foundation Anaerobic tank UASB tank SBR tank Gas storage tank Other equipment Underground sewerage Other supporting structures Qtty 1 1 1 1 1 1 1 1 2 1 1 2 2 3 1 Model/Specs 128 m3 800 m3 96 m3 192 m3 192 m3 192 m3 320 m3 128 m3 5x2x3.5m 96 m3 792 m2 23 x 0.5m 18 x 0.5m 13x 0.5m 13 x 0.5m With cover Materials Concrete Concrete Concrete Concrete Concrete Concrete Concrete Concrete Concrete Concrete Brick Concrete Concrete Concrete Concrete Concrete Concrete
13 14
Table 2.14. General performance and specifications of a wastewater treatment system
Description
Capacity Methane generation Environmental performance
Performance and specifications

1,800 m3/day 21,800 m3/day Reduction of COD > 39.8 tons/day COD digestion > 99%
Summary of benefits from biogas recovery: Wastewater to meet environmental standards Electrical power saved at 4,000,000 kWh/year In cash: 4,000,000 kWh/year x VND 1,250/kWh = VND 5,000,000,000/year 7,000 tons of coal saved a year In cash: 7,000 tons/year x VND 2,500,000 /ton = VND 17,500,000,000/year All in all, use of biogas saves: VND 5,000,000,000 VND 22,500,000,000 /year. /year + VND 17,500,000,000 /year =
In addition, use of biogas instead of coal will significantly reduce the CO2 emission equivalent to an amount of 180,000 tons of CO2 a year. The CDM project can also receive earnings from sales of CERs. For small sized biogas projects in pig farming households, the economic gain will depend largely on the following factors. Type of equipment Size and capacity (volume of structures)
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Material cost (locally) Location and distance from the system to raw material entry point and output (gas consumption) site End-use demand (cookers, lamps, generators). Cost components include: Material cost (brick, cement, sand, stone, gravel, steel, composite tank or cover sheet etc.) Labor cost (construction, installation etc.) Equipment (hoses, valves, gauges, gas filters etc.) End-use equipment (cookers, lamps, generators etc.).
The average cost for construction work only of a biogas system (including labor and material costs) in the South is often 30% higher than in the North, at about VND 900,000/m3 and may vary by province. The difference may be explained by the variance in building materials cost, labor cost and so on in different locations. Expenses for other accessories such as gas hoses, valves, joints etc. account for about 12%-13% of the total project costs. Cost details for a biogas project by size and capacity are described in the following table.
Table 2.15 Biogas system costs, by size Unit: VND/m3 Cost Construction cost Source: Biogas user survey, 2007-2008. The above table indicates that the larger the biogas system is, the lower the cost for each volume unit (m3). This may be understood from a geometrical perspective. If the volume of the digestion and pressure regulator tanks, which are the most costly parts of a biogas system, increases, the ratio between the surrounding surface and volume will decline. This means that the construction cost (materials and labor) for a volume unit will go down when the construction volume increases. In addition, the unit cost for a biogas system is also affected by the local labor cost, as seen in the table below. Table 2.16 Labor cost by province Province Tin Giang ng Nai Tr Vinh Labor cost (VND/day) 90 000 100 000 90 000 5 1 000 000 System size (m3) > 5-10 >10-15 900 000 800 000 >15 700 000
Source: Study team (estimates) Also, survey results from 100 households participating in the biogas project for the animal husbandry sector (supported by the Netherlands government) indicate that construction costs were mostly covered by beneficiary contributions (80 households), of which 17 households used their own money and borrowings from relatives and only 3 households used entirely loan money. Other than that, the households also received support fund of VND 1,000,000/system from the project, which accounts for 25%-35% of the construction cost depending on the size of the system built. Below is a summary of the performance and benefits of household scale biogas systems in Vietnam.
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Financial benefits: For every year using biogas, a rural household may save up to VND 1-2 million if the biogas is used for cooking only. The out-of-pocket cost for construction of biogas tanks may be recovered very quickly by the ability to save energy for cooking and cost for fertilizers. An average household may save US$ 59.19 for firewood, US$ 12.16 for fuel oil, US$ 8.07 for ammonium nitrate, US$ 5.28 for phosphate and US$ 8.07 for fertilizer potash, and so on. According to report (conducted in 2007 by the SNV biogas project), use of the manure liquid from biogas systems helped increase productivity by 38.1% for paddy rice, 32.2% for corn, 34.2% for wheat, 42.1% for potato and 30.4% for vegetables and pods etc. The evolving biogas production approach will help local energy demand to be met in a more reliable manner as a considerable number of existing fossil energy types will be replaced. Use of biogas for electricity generation, cooking or lighting may save a rural household a much needed couple of millions of dong a year. If such amount is accounted for in breeding business, it may be considered as a sizable earning which helps cut down breeding cost by about 7%.
On top of that, byproducts of biogas systems, including post-treatment liquid and solid wastes are also really valuable materials for the farmer. These may be used for various purposes, as fertilizers, for growing mushrooms, seeding management or as supplementary feed for livestock, fish and earthworm. Study findings indicate that use of these liquid byproducts as leaf spray helps increase crop output by about 10% compared to direct soil fertilization. If used in combination with inorganic manure, they will help increase the solubility and chemical fertilizer absorption of soil, while reducing loss of nutrients and raining NPK performance by 10%-30%. This method also promotes the activities of microorganisms; retain the manure in soil; make soil spongier; avoid soil sterility due to excessive use of chemical fertilizers, etc. In addition to the above mentioned benefits, households may also start a biological organic manure production process. The materials needed include: sludge, grass, rice husk, straw, duckweed, corn trees, bagasse and so on, combined with byproducts from the biogas tanks and 5 kg of BIOVAC multi-strain biological product, plus 5 liters of BICAT biological catalyst. All these materials can be anaerobically fermented for 45-60 days at temperature below 50oC (two 20-days-apart stirring rounds are needed). The outcome will be an evenly spongy brown dark mixture with high nutritional value that can be used as manure for cash crops and to slow down soil retrogression. In this manure, worm eggs and enterobacteria are almost entirely eliminated. More importantly, the unit price for 1 kg of this type of microorganic manure is very low. Each household would only need a couple of hundreds of dong to produce a ton of biological organic manure from agricultural wastes and biogas tank post-treatment wastes, compared to the current market price of over one million dong a ton. Social benefits: As biogas systems are in place, rural households may use biogas entirely instead of other fuels and energy previously used for cooking. On average, a household may save up to 3-4 hours a week fetching or buying fuels. In addition, use of biogas in cooking is also convenient and clean, which helps relieve women and children from the daily ordeal of housework and fetching firewood, and the time saved may be used for learning and rest.
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Use of biogas systems may directly improve the material living conditions for rural dwellers, by allowing them to use a quality fuel, to have hygienic, better-looking sanitation and breeding facilities, giving them the comfort level close to urban conditions, and so on. Environmental benefits: Previously, without biogas facilities, 54% of rural households used to ferment manure prior to using it on the soil. 16% of the households would use muck directly on the crops and 15% of the households would dump their breeding wastes to sewerage to canals. This form of breeding waste treatment causes damaging effects on the habitat, leaving stench and bothering the neighbors.
When the biogas systems were in place, 72% of breeding wastes were fed to the biogas system, as 20% of the waste was used for manure fermentation; 4.8% of the waste was sold or given to neighbors and only 2.1% of the waste was disposed of directly to sewerage. This has a direct effect in reducing pollution. In addition, use of byproducts from biogas as fertilizers for paddy and crops helps improve soil quality, fertility and prevent soil impoverishment and erosion; preserve and renovate arable land resources; and help improve yield by 20%-30%. Use of biogas as fuel also cut consumption of firewood and save it for other uses, which in turn helps reduce deforestation and eye and lung diseases caused by smoke and dust from cooking. Use of renewable energy generated from breeding wastes with the biogas technology helps cut down use of fossil energy, resulting in lower emission of hazardous gases and greenhouse gases and better environmental protection.
2.6. Available biogas technologies in Vietnam

2.6.1. Popular technologies in Vietnam Small sized, household biogas equipment and technologies Covered lagoon (medium and large size) biogas equipment and technologies Upflow anaerobic sludge blanket digestion (UASB) biogas equipment and technologies, medium and large size Expanded granular sludge bed (EGSB) anaerobic digestion biogas equipment and technologies, medium and large size. 1. Small sized, household biogas equipment and technologies This category comprises floating cover, brick systems; and fixed cover, vinyl bag systems; Brick-type systems include locally made models provided by the Energy Institute, Can Tho University, Vietnam Horticulture Association (Vacvina), and Biogas Center. a) Floating cover biogas system: The Energy Institute has been researching and introducing sheet steel floating cover biogas instruments, brick digester tank with water-tight gasket at opening rim. Systems of this type were very common in 1980-1990. An obvious advantage of this design is that it allows development of large volume systems, especially for use in concentrated breeding farms. The cost of this system is however significantly high as the steel cover must be factory-made and regular maintenance is required, if performance is to be sustained. This technology specifically requires very good management.
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Figure 2.5. Energy Institutes floating cover biogas system
b) Brick fixed dome cover biogas system: The first model of this design was named NL-3, and later improved models include NL-5 and NL-6. This is currently the most popular design in Vietnam. The system is built entirely of brick, placed beneath ground surface, and is much cheaper than the floating cover version. Model NL-6 accounts for 75% of all biogas systems developed as part of the rural water and sanitation program, as well as the National rural development program. NL-6 has been further improved and transformed into model KT-1, which has been made the standard design in the 10 industry standards of the Ministry of Agriculture and Rural Development released in 2003, as well as widely used in the Biogas for animal husbandry in Vietnam program financed by the Netherlands and implemented by the Agriculture Administration, Ministry of Agriculture and Rural Development.
Figure 2.6. Energy Institutes fixed dome cover biogas system
c) Can Tho Universitys biogas system design: The University has successfully researched and developed a cylindrical steel net reinforced concrete design with fixed dome cover as part of the Thailand-Republic of Germany cooperation project. The system was later upgraded by the Energy Institute into model KT-2, which was also made formal in the 10 industry standards of the Ministry of Agriculture and Rural Development released in 2003. Like KT-1, model KT-2 was selected for the provinces participated in the Biogas for animal husbandry in Vietnam program.
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Figure 2.7. Can Tho Universitys biogas system design
Figure 2.8. Biogas system, model KT-2
Model KT-2 has all the same advantages as other fixed dome cover systems, and more, as it does not need deep digging and thus more suitable with areas where deep digging is not recommended such as weak soil, landslide-prone and high groundwater level areas. d) Vietnam Horticulture Associations biogas system (VACVINA): The Community Development Center (of VACVINA) is the author of a box-typed biogas system with a separated gas storage component as a hybrid version of the septic tank design and biogas technology. This design is called the VACVINAs box-typed system.
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Figure 2.9. VACVINAs biogas system
e) Rural Support and Development Centers biogas system (Civil Engineers Association RDAC): The first RDACs model has a digester tank with composite dome top gas storage. In recent years, the center has upgraded the design with the box-typed digester tank and the top composite dome gas storage component being maintained, and the digester tank opening widened for easier probing.
Figure 2.10. RDACs design
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Figure 2.11. Vinyl bag-typed biogas system
f) Vinyl bag-typed biogas system: The working group of the SAREC S2 VIE-22 project, assembling the Animal husbandry Institute, Can Tho University, HCMC Industry University and Hue Agriculture University, through R&D, has been developing a variety of vinyl bag-typed systems, simulating a design of Taiwanese origin which was successfully introduced in Colombia. This design was very popular in the early 1990s. To date, more than 35,000 systems have been installed in concentration in Vietnam, particularly in the Mekong River Delta area, including Tien Giang, An Giang and some Central Highland provinces like Dak Lak, Dak Nong, among others. 2. Covered lagoon (medium and large size) biogas equipment and technologies At medium and large sizes (industrial scale), several versions of the design have been adopted in various areas, including Ha Tinh, Hoa Binh, Hanoi, Dong Nai, Thai Nguyen and so on. The design is illustrated in the following Figure. In November 2010, the HDPE covered lagoon design was introduced at Phuc Thinh pig farm, Dong Hy district, Thai Nguyen province, and has been successfully in operation since. The farm owner, Mr. Nguyen Ngoc Lan, former director of Thai Nguyen Home Affairs Department, started this 2,500-porker farm (6-110 kg/pig) after retirement in June 2009. Right from the outset, Lan had this 5,000 m3 covered lagoon facility built, with the bottom and rims covered with watertight concrete, to process all breeding wastes. The facility however did not work after completion. In November 2010, the Biogas Technology Center (BTC) came to survey, redesign and rebuilt the facility on top of the dug pond. Daily wastes from the anaerobic lagoon are pooled in a 3,000 m3, 2 meter deep aerobic pond, and used as first-line manure for fruit trees grown in the ranch. Output gas is used to the full for cooking and electricity generation. Two twin cookers and two single cookers running on biogas are used in the canteen serving farm workers. The stoves are fired for 5 hours a day for cooking and another 4 hours a day for water heating. In addition, biogas is also used to operate two electrical generators for 4-5 hours a day. One 15 kW generator running on biogas only was modified from a used car engine, and one 20 kW diesel-based Chinese generator runs 60% of the time on biogas. The existing gas production capacity of the lagoon and energy consumption of the farm allows Lan to buy one more 35 kW electrical generator (for about VND 35 million). The question with using biogas for generators is how to effectively filter the gas to prolong the equipments life cycle and the engines reliable operation.
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Figure 2.12. 5,000 m3 covered anaerobic lagoon in Thai Nguyen
UASB anaerobic biogas technology How the up flow anaerobic sludge blanket (UASB) technology works:
Figure 2.13. UASB + SMAG anaerobic tank at Lam Son sugarcane plant, Thanh Hoa
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EGSB anaerobic biogas technology How the expanded granular sludge bed anaerobic biogas technology works: (EGSB process) The advanced EGSB-typed anaerobic reactor tank has high load and allows for fast digester pace in processing high density COD and SS in wastewater and organic wastes. The EGSB reactor tank system has the following strengths: Higher organic load, more reliable operation, suitable for organic load requirements The reactor containing suspended granular sludge No energy being consumed as the sludge is mixed entirely with wastewater No need for filters and accurate chemical quantification; high velocity allowing less hose obstruction risks Small space needed; easy to run and maintain.
Figure 2.14. EGSB and SAR_T anaerobic tank under construction in Quang Ngai
On Oct. 18, 2009, the Nghe An branch of Intimex JS Co. and AES Group (U.S) launched the Wastewater treatment and Methane collection plant, on the side of Intimex Cassava starch plant in Thanh Chuong, Nghe An. This US$ 2 million project was commenced in February 2009, as construction work was handled by the investor AES Group, in cooperation with the local contractor, Viwaseen 6. The project aims to support wastewater treatment for the Intimex cassava starch plant process, and the recovered methane from the treatment process is used for the plants drying system, in place of fuel oil or coal to burn the kiln as before. The project will both improve the plants performance and efficiency, and at the same time help improve the surrounding environment and bring benefits to the local community.
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2.7. Information about local companies that are potential candidates as partners with German firms in biogas development
Table 2.107. Background information of potential investors and partners in biogas development No 1 Company name Energy Institute Address 6 Ton That Tung, Hanoi Line of business Investment consultancy, design, inspection and supervision Investment consultancy, design, inspection Investment consultancy, design, inspection and supervision Waste treatment
Biogas Technology Center Vietnam Biogas Association
# 52, Alley 172/46/20, Au Co, Tu Lien, Tay Ho, Hanoi R. 104, Bldg. 2G, Van Phuc Diplomatic corps Compound, 298 Kim Ma, Ba Dinh, Hanoi
Cassava starch plants
There are about 60 cassava starch plants with relatively advanced equipment, including 44 in the South and the remaining in the North. See details in the Appendices See details in the Appendices
5 6 8
Milk processing plants Sugar processing plants Aquaculture plants
Waste treatment Waste treatment
See details in the Appendices 9 10 Large scale pig farms Other animal husbandry farms (buffalo, cow)
Waste treatment
See details in the Appendices
Waste treatment
See details in the Appendices
Waste treatment
Animal feed plants Corn starch plant Phu Tho Agroproducts and Food Co. Phu Tho Agroproducts and Food Co. Producing corn starch and animal feed Beverage processing plants and producers Hung Vuong Beer Brewery, Viet Tri Transport Supply Ltd. Co., Viet Tri Transport Supply Ltd. Co., producing keg beer and bottled beer.
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3. Review, research and formation of the legal framework for the development of renewable energy/biogas in Vietnam
The below section summarizes legislative instruments, including the Governments resolutions, Prime Ministers decisions, circulars and decisions of ministries and agencies that are directly or indirectly involved in renewable energy/biogas energy development in Vietnam. These are basically the legal framework for development, cooperation and investment, as well as promotion and support mechanisms for renewable energy development in Vietnam in the present and immediate future.
3.1. Summary of legislative instruments focusing on renewable energy/biogas

To develop renewable energy resources, the Government of Vietnam has for many years now been developing and releasing supportive regulatory and policy frameworks, including laws (Electricity Act), National energy development strategy, Biofuel development project, Wind power development mechanism, and most recently the 7th Electricity development master plan which was endorsed by the Prime Minister in July. In alignment with the National energy development strategy by 2010 and vision to 2050, national energy systems in Vietnam will be developed in a coherent and logical fashion, including electrical power, oil and gas, coal, new and renewable energy, with a focus on clean energy, new and renewable energy. Strong efforts will be taken to increase the share of new and renewable energy to about 3% of the total primary commercial energy resources by 2010; about 5% by 2020 and 11% by 2050. The 7th electricity industry master plan also sets a clear target for the development of this highly potential energy. To be specific, electrical power sources using renewable energy, by the gross capacity of all power plans, are expected to increase from 5.6% in 2020 to 9.4% in 2030; and by the total produced and imported electricity capacity, to increase from 4.5% in 2020 to 6% in 2030. As for wind power, the gross output will be upgraded from the currently marginal level to about 1,000 MW by 2020; and about 6,200 MW by 2030; with wind-propelled electrical power percentage raising from 0.7% in 2020 to 2.4% by 2030. Biomass power will also go in parallel with a target of 500 MW by 2020 and up to 2,000 MW by 2030; and as a percentage to rise from 0.6% by 2020 to 1.1% by 2030. It seems that the renewable energy development strategy has very high hope for the Vietnam energy industry, since with the existing advanced level of technology, research and development of this energy source will be more efficient. The government has approved a support mechanism for wind power projects in Vietnam, allowing companies to concentrate on production, operation and sales of electricity. In the near future, the government will further ratify the frameworks for other types of energy. For the national energy industry to achieve sustainable development, many experts believe that Vietnam needs to capitalize on all available renewable energy resources by investing strongly in research and development for renewable energy. In addition, energy efficiency programs should be focused, while energy importation through regional grids is reasonably regulated to meet the demand and energy development strategy of Vietnam. The following table summarizes released legal frameworks related to the strategy and policies supporting and promoting renewable energy/biogas energy development in Vietnam in recent years.
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Table 3.1. Summary of legal frameworks conducive to renewable energy development in Vietnam No Document name Provisions pertaining to promotion of renewable energy/biogas Law 1 Electrical Power Article 4. Development and use of new and renewable energy Law, effective from resources for electricity generation shall be promoted. July 1, 2005 Article 13. Development projects for power plants using new and renewable energy Article 60. Entities and individuals are encouraged to invest and develop electrical grids or power stations using local energy, new energy and renewable energy for electricity generation in rural, upland and island areas. Article 61. Development of electricity supply in rural, upland and island areas 3. The Governments supportive policies include: a) Funding support; b) Loan interest support. 2 Investment Law Article 27. Preferential investment areas: new and renewable 2005 energy Article 28. Preferential investment locations: areas of difficult socioeconomic conditions and areas of extremely difficult socioeconomic conditions Article 32. Targeted beneficiaries and criteria for investment incentives: investors proposing development projects that fall under areas and locations of preferential investment as specified in Articles 27 and 28 of this Law are entitled to the incentives provided in this Law and other relevant legislative provisions. Article 33. Tax incentives 3 Local Investment Article 16: Development projects in the following areas are entitled Promotion Law 2003 to incentives: 1. Areas of difficult socioeconomic conditions; 2. Areas of extremely difficult socioeconomic conditions. 4 Environmental Protection Law 2005 Article 6. Environmental preservation activities shall be promoted. 4. development, use of clean energy and renewable energy; reduction of greenhouse gas, emission hazardous to the ozone layer Article 33. Development of clean energy, renewable energy and environment-friendly products 2. Entities and individuals developing and using clean energy, renewable energy; and making environment-friendly products are entitled to the governments incentives in terms of taxes, funding support and land support for development. 3. The government shall develop and implement a development strategy for clean energy and renewable energy to meet the following targets: a) building the national capacity for research and application of technologies for development and utilization of renewable energy; b) expanding international cooperation; pooling resources for the development and utilization of renewable energy; c) raising over time the share of renewable energy in the gross national energy output; maintaining energy security; saving natural resources; mitigating emission of greenhouse-gases; d) integrating the renewable energy development program with poverty reduction, rural, upland, coastal and island area development programs.
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No 5
Document name Law on technology transfer No. 80/2006/QH11, Nov. 29 2006 Governments Decrees 1 Decree 04/2009/NCP on promoting and supporting environmental protection 04/2009/ Jan. 14, 2009
Provisions pertaining to promotion of renewable energy/biogas Article 9. Transferable technologies. Use of new and renewable energy
Governments Decree 151/2006/N-CP, Dec. 20, 2006, on loan facilities for investment and exportation from public funds
Governments Decree 108/2006/N-CP, Sep. 22, 2006, providing specifics and implementing guidelines for the Investment Law Decree 133/2008/N-CP
+ This Decree provides regulations on incentives and support in terms of land, funding, tax and fee break and exemption for environmental preservation; subsidy and support for sales of products generated from environmental preservation processes and other support and incentives for activities and products pertaining to environmental preservation. A. List of environmental preservation activities entitled to special incentives and support I. Infrastructure construction 3. Waste treatment facility development II. Research, production, sales 10. Importation of equipment, instruments, devices, tools, materials used directly for waste collection, recycling and treatment; and generation of renewable energy B. List of environmental preservation activities entitled to incentives and support II. Research, production, sales 6. Generation of renewable energy C. List of products entitled to incentives and support 4. Energy generated from waste disposal processes. List of projects applying for investment loans 4. Investors proposing credit worthy projects and business plans shall have the financing plans and loan payment plans reviewed by the Development Bank of Vietnam and be granted the applied loans if prescribed criteria are met. Credit term 1. The credit term is defined depending on the cost recovery potential of the project and the investors debt servicing ability respective of the business nature of the project, but no longer than 12 years. List of designated locations for investment incentives A. List of designated areas for special investment incentives I. New energy 3. Development of facilities using solar energy, wind energy, biogas, geothermal energy, tidal energy. B. List of designated areas for investment incentives I. New energy List of designated remote and disadvantaged locations for investment incentives. Providing specifics and implementing guidelines for the Law on Technology Transfer, regarding technology transfer agreement, technology inspection service and technology transfer incentives and promotion. Dec. 31, 2008 d) Coherent and logical development of energy systems, including electrical power, oil and gas, coal, new and renewable energy, with a focus on clean energy, new and renewable energy. Logical allocation of energy systems by regions and demarcations;
Prime Ministers Decisions 1 National energy development strategy by 2020 and vision to 2050;
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No
Document name No: 1855/Q-TTg, 27/12/ 2007
National electricity development master plan for 2011-2020 and vision to 2030; No. 1208/2011/QTTg, July 21, 2011
Prime Ministers Decision 130/2007/Q-TTg, Aug. 2, 2007, providing specific policy and financing schemes for Clean Development
Provisions pertaining to promotion of renewable energy/biogas balanced management of exploration, mining and processing; consistent development of the service and recycling system. + Strong efforts will be taken to increase the share of new and renewable energy to about 3% of the total primary commercial energy resources by 2010; about 5% by 2020 and 11% by 2050. + Completion of rural and upland energy programs. Rural households using commercial energy sources for cooking to be raised to 50% by 2010 and 80% by 2020; by 2010, 955 of rural households to get access to electrical power; by 2020, most rural households to have electricity. + An energy development fund to be considered to support the development of new and renewable energy. d) Vision for the development of new and renewable energy - Survey and planning: As new and renewable energy has not been fully understood, more resources should be set aside for survey and update of data to inform planning and zoning of these types of energy in order to develop rational development and utilization plans. - Education on new and renewable energy shall be strengthened to promote use in remote, hard-to-reach, borderland, island areas. Appropriate management systems shall be put in place to maintain and development electricity supply in these areas. - New and renewable energy shall be integrated in the energy saving program and other national target programs, including the rural electrification program, afforestation program, poverty reduction program, safe water program, horticulture-aquaculturebreeding (VAC) program, etc. - Support and finance shall be provided to surveys, researches, trial development and installation of pilot new and renewable energy points of use; as tax incentives are granted to imported equipment, new technologies, as well as manufacture and distribution of such equipment; and ownership rights are protected for valued inventions and innovations. - Domestic and international individuals and entities are allowed to enter into partnership for development and use of new and renewable energy on a mutually beneficial basis. + Preferential development of renewable energy for electricity generation: to achieve 4.5% by 2030 and 6% by 2030 of the total produced electricity capacity; - Planning phase: new installation of about 13,000 MW from renewable energy + Electrification by 2020, most households to have access to electrical power: Including 600,000 households using electricity generated from renewable energy. + Electricity pricing responses (to guarantee cost recovery plus reasonable earnings). Article 6. Rights and responsibilities of CDM project owners and developers a) Eligible for incentives of taxes; land use fee, land rental; fixed asset depreciation; investment loan from public funds as specified in prevailing laws and regulations; b) Eligible for consideration of price subsidy for products of CDM projects that fall under preferential categories; c) Eligible for consideration of financial support in project
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No
Document name Mechanism projects
Prime Ministers Decision on the development strategy for the electricity industry in Vietnam for 2004-2010 and vision to 2020; No. 176/2004/Q-TTG, Oct. 5, 2004
Provisions pertaining to promotion of renewable energy/biogas preparation and design under prevailing law. Article 12. Corporate income tax applicable to CDM projects 1. Corporate income tax rates, and corporate income tax break and exemption for CDM projects are in effect similar to projects that fall under preferential investment areas specified in Section III.A, Annex I, List of preferential investment areas attached to Decree 108/2006/N-CP, dated Sep. 22, 2006, providing specifics and implementing guidelines for the Investment Law; the Corporate income tax Law and implementing documents of the Corporate income tax Law. Article 13. Import tariff CDM projects are immune from import tariff for imported goods to be used as the projects fixed assets, and imported goods being materials, supplies, and semi-finished products that are not locally available to be used in the production process of the project in line with the provisions of paragraphs 6 and 16, Article 16, Governments Decree 149/2005/N-CP, Dec. 18, 2005, providing implementing guidelines for the Import and Export Tariff Law and prevailing laws and regulations on import and export tariff. Article 14. Land use fee and land rental CDM projects are eligible for exemption and relief of land use fee and land rental as defined in relevant laws and regulations applicable to projects of special preferential investment areas. Article 16. Subsidy for CDM projects products 1. CDM projects products are eligible for subsidies from the Environmental Preservation Fund of Vietnam if the following criteria are met: a) falling under the list of products of preferential CDM projects b) the actual cost of the product is higher than the sales price stated in a signed contract. 2. The eligible period for subsidy of CDM projects products shall be defined based on the time the products are available and the projects ability to cover the cost of the subsidized product. 3. The Environmental Preservation Fund of Vietnam is responsible to grant subsidy to CDM projects products pursuant to the provisions of this Decision and the Ministry of Finances recommendations. 4. The Ministry of Finance shall, as the lead agency, work with the Ministry of Natural Resources and Environment, to provide specific guidelines on the criteria for subsidy qualification, subsidy level and subsidy period for CDM projects products that fall under the list of products eligible for subsidy. - Strengthening research and development of new and renewable energy to meet the demand for electrical power, especially in island and remote areas; - Pushing forward the program of giving rural and upland areas access to electricity with a view to, by 2010, have 90% of rural households to get access to electricity, and by 2020, 100% of rural households to have electricity. - Development of factories running on new and renewable energy; Capitalizing on local new energy resources to generate and supply electricity to areas that are not reached or inefficiently covered by the national grid, particularly island and remote areas.
Ministerial level circulars
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No 1
Document name Circular 58/2008/TTLT-BTCBTN&MT, July 4, 2008, providing implementing guidelines for Decision 130 2 Circular 97/2008/TTBTC, Oct. 29, 2008, of the Ministry of Finance Ministerial level decisions 1 Decision 18/2008/Q-BCT, July 18, 2008, releasing regulations on avoidable cost tariff and sample power purchase agreement
Provisions pertaining to promotion of renewable energy/biogas Subsidy for CDM projects products, including + Electricity generated from wind energy, solar energy, geothermal energy and tidal energy + Electricity produced from methane gas collected from waste landfills and coal mines.
Providing implementing guidelines for the Government support policy for electricity development in rural, upland and island areas
+ providing criteria, sequence and procedure of development, amendment and annulment of output electricity price schedule applicable to small-sized power plants running on renewable energy and connected to the national grid + applicable to corporate and individual buyer and seller of electricity provided by small-sized power plant running on renewable energy.
3.2. Barriers to renewable energy development in general and biogas energy

While Vietnam is a country with high potentials of renewable energy, related projects remain few in number and the percentage of renewable energy-based electricity in the total grid capacity is minimal, despite the strongly growing in-country demand for electrical power and constraints in expanding traditional power sources based on coal, oil and gas. The development of biogas energy and renewable energy in general in Vietnam has encountered multiple hindrances in recent years, including both deliberate and unavoidable hurdles. Many challenges remain in the quest to develop renewable/biomass electricity sources a part of the national grid in the foreseeable future. Four key barriers may be identified: (i) technology barrier, (ii) policy, regulatory and institutional barrier, (iii) economic and financial barrier, and (iv) data and information barrier. The following table summarizes detailed discussions on the above mentioned four barriers.
Table 3.2. Barriers and interpretation Category of barriers Technology barrier Barriers Lack of access to the international technology market; lack of knowledge on available technologies in the market Interpretation
While proven and high-efficiency large-sized biogas technologies have been very common in the work, they are little known in Vietnam. No local companies are providing comprehensive large-sized biogas-fired electricity generation technologies. Most of the technologies have to be imported. Consultant and technical services for biogas power technologies remain scarce. Lack of quality equipment The market for biogas systems, equipment and supply technologies obviously has high potentials as discussed above. Nonetheless, if only public subsidy
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Category of barriers
Barriers
Interpretation for research and experiment is relied on, without specific supervision and accountability, especially in a competitive market environment, provision of locally made quality, good looking and affordable biogas equipment will remain a tough question. Biogas technology development in Vietnam remains heavily subsidized as most research and development activities are either financed by the state budget or external support through international cooperation programs. No real biogas-fired power generators are available (only modified versions from old traditional generators). Plans to use up the produced biogas volume (to avoid discharge to open air, which already happened). Interministerial Circular 58/2008/TTLT-BTCBTN&MT defines a specific subsidy mechanism for selected renewable energy projects. While the proposed subsidy scheme does not include biogas generated from waste treatment, it is wide open to very costly projects such as solar and tidal energy, or methane collection from coal mining.
Resources for technology development
Efficient use of biogas
Policy, Preferences (subsidies) still regulatory and exist for traditional institutional electricity sources (e.g. barrier coal price), whereas no thorough consideration have been made on such energy as biogas in the broad territory of energy development. Lack of awareness and access to information pertaining to the legal framework
Biogas energy needs political will to prosper. The focus for development is compensation of the current failures of the electricity market. The price schedule adjusted with avoidable costs for electrical power from renewable energy connected to the grid has only been developed based on the buyers financial costs, and does not reflect avoidable economic costs and particularly social costs. Consistent governance and There is a lack of a national lead focal agency for management the governance and supervision for research and development of biogas technologies. No national support initiatives exist for research, trial, manufacture and production of biogas systems, equipment and technologies. Lack of coherent policies Cost of environmental destruction from the use of and incentives for clean fossil energy for electricity generation: No reliable energy development sources and data exist in Vietnam to know the exact costs of environmental destruction from electricity generation using fossil fuels, hence there is very little proof to fix the cost of electricity in dong/kWh for the purpose of setting fuel efficiency targets. Consequently, while the current calculation method of the price schedule adjusted by avoidable costs has been used from 2009, it does not reflect these costs, despite the tariff design allowing modifications and additions of reliable parameters.
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Low electricity price
Economic and financial barrier
A closed market
Lack of support for research and development Lack of funding from loans (from banks) for project implementation, as well as loan interests remaining high
Lack of access to finance and lending procedures
High unit cost of biomass electricity
It is believed that this is the largest barrier to investors. Electricity pricing has not followed the market mechanism and not yet comprehensively and correctly built (to include economic costs, environmental costs etc.). More thorough assessments and reviews are needed on economic barriers to renewable energy development and biomass electricity in particular, given the fact that the term often implies renewable energy due to high costs. High costs if not aggravated by taxes and subsidies, may not necessarily be a barrier. If all the costs and benefits of renewable energy have been accounted for in the economic analysis, the average economic cost in the whole life cycle of a project for electricity from renewable energy may still be higher than other fossil fuel options, but not likely at prohibitive levels as at present. The current funding for research and assessment of resource potentials and appropriate technologies remains limited and sometimes very scattered. Investors now find it very difficult to acquire loans from financiers, given the modest earning prospects and high risks of renewable energy projects. Knowledge of creditors about renewable energy is also very limited. The current commercial loan interest in Vietnam is very high (possibly over 20% a year for 2011). The lack of access to adequate financial resources is reflected in the lending term. As investment in renewable energy is resources-intensive, the accumulated financial resources and costs should be much larger than for thermoelectricity, which means that the cash flow of the plants will depend much on the term of the loan. The typical term at present is 58 years, while the cash flow from commercial banks to investors in the beginning years is often the lowest, which lengthens the cost recovery period and is counterproductive in calling for shareholdings. As biogas electricity projects are often of modest size, the unit cost is often higher than traditional power plants (using coal, gas etc.).
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Data and Lack of information and information data on biogas resources barrier
A few surveys on biogas resources have been conducted. Various potential sites for biomass electricity projects have been identified, but the data on these locations are still insufficient and not reliable enough for more detailed feasibility studies. Information about biogas The existing power purchase agreement system electricity pricing and the is one of the largest barriers to the development need for a discrete tariff of biomass electricity projects for grid for biogas and biomass connection. The current affordable purchase electricity price is only less than 4.5-5 US cents/kWh. It is estimated that a price higher than 6 US cents/kWh will be enough to accelerate grid connection of biogas electricity projects.
3.3. Trends and pathways for institution, regulatory arrangements, economic arrangements and frameworks for international cooperation in the biogas energy market
The Vietnam economy has achieved important progress in the last 20 years. An average economic growth rate of about 7% a year, a shift of the economy toward industrialization and a high degree of integration in the world economy are part of the picture. These achievements are however not quite a match for the potentials. Lack of sustainable economic development, poor quality of growth, low productivity, efficiency and competitiveness, uncertain macroeconomic balance are among the impediments. Economic growth remains much dependent on horizontal development and slow to change to in-depth development. Energy and fuel-intensive and polluting sectors seem to grow fast while environment-friendly and supportive sectors remain underdeveloped. Technologies are slow to be upgraded and use of fossil energy, mostly coal, remains dominant. Targeting to basically become an industrial and advanced country by 2020, in a few years to come, production will increase dramatically, along with a hugely growing demand for energy. In the current international context, Vietnams development cannot be divorced from the requirement to cut down on greenhouse gas emission to help protect mother earths climate system. Keeping inventory of and managing greenhouse gas emission in various socioeconomic sectors and developing renewable energy sources and new energy will be strongly pushed forward in the near future. Green growth in parallel with a green economy is a new development approach that has been established and adopted by many countries around the world. In this picture of development, green growth is an appropriate way to develop given the need to refresh the economic growth pattern and restructure the countrys economy in the immediate future. Pressing immediate concerns as well as a longer term vision associated directly or indirectly to climate change, energy security, green growth and especially development of renewable energy coupled with cutting greenhouse gas emission have been considered by the Government of Vietnam, with key ministries and agencies assigned as focal points for preparation and development of necessary strategies and roadmaps. To be specific: The Ministry of Natural Resources and Environment is urgently working to finalize the national strategy on climate change.
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The Ministry of Planning and Investment has planned to outline the green development strategy and finalize the official version in the shortest time possible.29 Other ministries and agencies have also been working on their own development plans with a view toward a green economy, low-carbon technologies and diminution of greenhouse gas emission. The Ministry of Industry and Trade has commissioned the development of Strategy and Master Plan for the development of renewable energy in Vietnam by 2015 and vision to 2015 (Decision 3606/Q-BCN, Dec. 14, 2006) to materialize the targets of the national energy development strategy for periods leading up to 2020 and vision to 2050 that was approved by the Prime Minister. The objectives of this project to develop the Strategy and Master plan include: (i) assess, analyze and select suitable renewable energy sources for development and consumption, (ii) develop a master plan for renewable energy in Vietnam, (iii) develop the Master plan for the development of renewable energy in Vietnam by 2020 and vision to 2030, and (iv) recommend specific solutions.
To visualize the propensities in the upcoming period pertaining to organizational structures, regulatory arrangements, economic arrangements and frameworks for international cooperation in the biomass energy market and the renewable energy market, clean energy, low-carbon technology market as a whole, a summary of pipeline or near-release normative documents related to the development of renewable energy and biomass energy market is provided in the following table.
Table 3.3. The legal framework for the development of biogas/renewable energy Normative document Prime Ministers Decision 2149/Q-TTg, Dec. 17, 2009, approving the national strategy for overall management of solid wastes by 2025 and vision to 2050 Draft strategy for development of renewable energy in Vietnam by 2030 and vision to 2050; and Master plan for development of renewable energy in Vietnam by 2020 and vision to 2030 (finalized and awaiting the Governments approval) Relevant provisions and indicators Principle position: Polluters pay; By 2050, 100% of solid wastes to be processed with advanced technologies; Objectives and targets: + By 2015: 60% of wastes to be recycled, reused, generating energy; + By 2020: 85% of wastes to be recycled, reused, generating energy; + By 2025: 90% of wastes to be recycled, reused, generating energy; + By 2050: 100% of wastes to be recycled, reused, generating energy; Electricity of renewable energy/biomass energy origin connected to the national grid Strategy: Present to 2030 - Development of economically viable power plants from renewable energy for grid connection is encouraged. Support will be provided on a competitive basis to make sure that cost-efficient power sources are added to the system and renewable energy technologies are developed for long term use. - Renewable energy types currently not economically feasible will be promoted and supported, based on selective piloting to explore opportunities for development, perfection of technologies, market formation and resources development. - Resources will be channeled to renewable energy research and development and technology transfer, as strong efforts will be taken to survey and update databases on renewable energy for longer terms. Vision to 2050
29
Notice 38/TB-CPCP (Mar. 3, 2011, Notice 151/TB-VPCP (June 30, 2011), and Notice 5684/VPCP-KTN (Aug. 18, 2011).
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Normative document
Draft national strategy on climate change (peerreviewed)
Draft outline of the strategy for green development by 2020 and vision to 2030 (in preparation)
Relevant provisions and indicators - Concentrated efforts will be used to develop and capitalize on the local renewable energy potentials with advanced technologies that fit the specific context of each region and area, to create high socioeconomic and environmental efficiency. - The renewable energy technology market will be robustly developed, as well as local accompanying engineering, manufacture and services. - Capacity building for research and development, transfer and application of renewable energy technologies will be strengthened, particularly for new energy. Planning and investment 2011-2015 - Installed capacity of new facilities to reach 1,194 MW, including 895 MW from micro-hydroelectricity and the remaining from biomass (bagasse, rice hulk, municipal waste) and wind power, as well as demonstration solar power. 2016-2020 - Installed capacity of new facilities to reach 2,408 MW, including 1,100 MW from micro-hydroelectricity, 780 MW from wind power and the remaining 32% from biomass (bagasse, rice hulk, and municipal waste), geothermal power, and demonstration solar power. 2011-2015 - Installed capacity of new facilities in this phase to reach 9,588 MW, including 2,380 MW or 25% from micro-hydroelectricity, 5,200 MW or 54% from wind power, 16% from biomass power, 2.0% from geothermal power, 2.0% from municipal waste and remaining from solar power and other renewable energy. Goal: A low-carbon economy, with green growth becoming the mainstream trend for sustainable development; slight reduction of greenhouse gas emission and higher ability to absorb greenhouse gas being viewed over time as compulsory in socioeconomic development; Strategic mission: Slight reduction of greenhouse gas emission + Development of renewable energy and new energy - Use of advanced technologies to increase electricity generation efficiency and cut greenhouse gas emission in all newly built thermoelectricity plants; development and use of small sized electricity generation systems running on methane collected from landfills and other sources. Industrial production and construction - By 2020, about 50% of industrial facilities to use cleaner production technologies and save 8%-13% energy, input, fuel and material consumption; - By 2050, most industrial facilities to use cleaner production technologies and save energy; Agriculture There is a change in how farming work is done, as well as in breeding waste management and treatment, as biogas is used as fuel to reduce pollution and greenhouse gas emission. This approach is to be adopted, disseminated and extensive replicated by 2020 and mainstreamed by 2050. Overall goal Through green growth, Vietnam will make changes to its economic growth pattern toward a low-carbon economy, lower greenhouse gas emission, higher ability to absorb greenhouse gas, contributing to
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Normative document
Relevant provisions and indicators alleviation of climate change; forming an economic system of high combined socioeconomic and environmental efficiency; applying more and more green technologies; building a green life style and sustainable consumption approach; to help create comprehensive improvements of the living standards. Objectives: By 2020, Vietnam to focus on the three key targets of renewing the growth pattern and restructuring the economy: (a) Cutting carbon emission and using more clean and renewable energy; (b) Adopting greener production; (c) Adopting a greener life style and promoting sustainable consumption. By 2030, Vietnam to acquire all the needed infrastructure, technology, human resources and regulatory framework to disseminate and cement the green growth approach.
In terms of organization for governance, development and utilization of renewable energy, including biogas, there has been some major restructuring and changes going on at the ministerial level. On Sep. 5, 2011, the Prime Minister released a decision30 to form the Energy General Administration, affiliated to the Ministry of Industry and Trade, as an advisor to assist the Minister of Industry and Trade in administering and completing governance tasks in relation to the energy industry, including renewable energy. The first specialized government agency for new and renewable energy management in Vietnam has emerged. This is a good opportunity to promote planning and introduction of policies, frameworks as well as implementation of national target programs, and projects to development renewable/biogas energy in pursuit of the set targets.
Decision 50/2011/Q-TTg, Sep. 5, 2011, on the roles, mandates, authority and organization of the Energy General Administration.
30
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4. Recommendations for potential projects in the biogas energy technology market

The information and discussion in the above sections have revealed that the biogas energy market in Vietnam has been opened and is taking shape.31 It includes biogas electricity connected to the national grid and other thermal production technologies. Nevertheless, like wind power, to enter this unchartered territory, Vietnam will need some more time (given the lag time of the existing policy framework), as a separate pricing scheme for biogas electricity has not been in existence (only subsidy for wind power is now available in Vietnam 32). In that context, to strongly and quickly develop the renewable/biogas electricity market and achieve the set targets, a conducive pricing system to promote investment in renewable/biogas energy will very likely be considered and enacted by the Energy General Administration, and specifically its Department of New and Renewable Energy, the dedicated agency in charge of energy and renewable energy in particular, also just established for over a month now.
4.1. Identifying the needs for specific technologies, services, products and opportunities for Vietnam Germany partnership
Based on the context (status and trend) and discussion, assessments in the above sections of this report, a general picture of the needs for specific technologies, services and opportunities for partnership and development of the biogas energy market in Vietnam with the involvement of German stakeholders has been sketched. While Vietnam has good potentials to harness its biogas energy sources through various technologies of waste treatment in animal husbandry, agriculture-forestry-industry processing and production and aquaculture, such potentials have not been tapped or poorly translated to practical use for energy production (electricity and heat). Main biogas resources available for large size development come from municipal wastes from cities, islands (e.g. Phu Quoc island), waste treatment in cassava starch production, sugar production, livestock breeding and other production areas such as aquaculture, food and beverage production. The energy and electricity demand for socioeconomic development in Vietnam in the near future will be enormous whereas fossil energy sources are limited. The energy need (by 2030) will increase five folds from the current level (2010, Figure 4.1 illustrates the energy demand in Vietnam and shortage in local primary energy supply after 2015).
31
The Prime Ministers Decision 1208/Q-TTg, July 21, 2011, approving the national electricity development master plan for 2011-2020 and vision to 2030. Prime Minister 37/2011/Q-TTg, June 29, 2011, on support for wind power development in Vietnam.
32
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Figure 4.1. Balance of demand and supply of primary energy
KTOE
Renewable energy Hydroelectricity Crude oil
Nng l-ng ti Nm to Thy in nh Thy in
Micro-hydroelectricity Gas Coal
The electricity demand (by 2030) will increase about 7 folds from today (2010). The local energy supply is limited (major hydroelectricity resources to be used up within this decade; coal supply for electricity production to be in shortage requiring importation; it is estimated that after 2015, coal importation for electricity generation will start with year-onyear high growth beyond that). Energy prices in Vietnam will change in an upward trend and soon stay on par with the world level. Energy and electricity subsidy will subside over time and competitive energy/electricity markets will set in motion. Against the backdrop of local shortage and imbalance of fossil energy supply, the Prime Minister Decision 1208/Q-TTg, July 21, 2011, approving the National strategy for electricity development for 2011-2030 will be the normative reference for investment and strong development of the biomass/biogas energy market in Vietnam from 2011 and beyond. In this period, renewable/biomass electricity for grid connection will be developed to reach capacities of 500 MW and 2,000 MW respectively by 2020 and 2030. The master plan for renewable energy development in Vietnam that is urgently going through necessary procedures for enactment also eyes the target of biogas energy development. Below are some visualizing data.
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a) Biogas electricity for grid connection

Table 4.1. Potentials and ability to develop biomass and biogas energy33 Ability to turn Ability to turn into energy into electricity (million tons) (MW) 1. Breeding waste > 60 50 58 - 100 2. Municipal waste > 10 8 200 - 300 3. Biofuel production waste 1.0-1.5 1 4. Firewood and wooden waste > 30 25 150 - 250 5. Agricultural waste > 72 50 1200 -2000 Total 134 1608 - 2650 The demand for renewable energy and biogas energy in particular for grid connection is illustrated in the following table by type of biomass. Type of biomass Potential (million tons) Table 4.2. Gross capacity of renewable electricity connected to the grid in use (MW)34 Capacity by technology Gross renewable energy Biogas Municipal waste (including collected methane) Biomass (solid) Other renewable energy 2011-2020 3606 35 139 355 3077 2021-2030 9588 65 200 1500 7823 2011-2030 (entire period) 13194 100 339 1855 10900
4.2. Information about market entry opportunities and procedures for German companies interested in doing business (import/export) or investment (getting license, partnership) in the field of biogas energy
Foreign companies and those from Germany in particular interested in the biogas energy market in Vietnam will be welcome, as part of the general policy of drawing foreign investment,35 in such pathways as: Development of new electricity supply outlets coupled with in-depth investment, technology upgrade, compliance with prevailing environmental standard, use of state-of-the-art technologies; Diversification of electricity outlet types.
As such, key legal frameworks to develop renewable/biogas energy have been taking shape and participation in the biogas market in Vietnam of international companies and German firms in particular will be welcome in different forms, including direct investment (FDI) 36 , and in such
33
34
35
Section 3.a. development of power sources in the set directions, pgs. 2 & 3, Prime Ministers Decision 1208/Q-TTg, July 21, 2011, approving the national electricity development master plan for 2011-2020 and vision to 2030.
36 Section 4.b (pg. 10), pooling resources to develop the electricity industry in Vietnam, Prime Ministers Decision 1208/Q-TTg, July 21, 2011, approving the national electricity development master plan for 2011-2020 and vision to 2030.
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formats as BOT, BOO, joint venture with local partners, among others, or through provision of equipment lines and technologies to local investors and other investors, such as waste treatment equipment to generate biogas, boilers, methane-powered kilns, turbines, electrical generators of various capacities (0.5-20 MW). Apart from provision of equipment lines and technologies as mentioned above, German companies may also become providers of consultancy services, including for biogas electricity development planning (at national, regional or provincial levels), development of support mechanisms and feed-in tariff for biogas electricity, smart electrical grid, and so on.37 To develop biogas projects in Vietnam, investors will almost certainly have to import key equipment, instruments and technologies from overseas (e.g. waste treatment systems, biogas collection and transmission equipment, boilers, steam/gas turbines, internal combustion engines), since the industries to manufacture such equipment are not yet in existence in Vietnam. In respect of investment (getting license, partnership) in the field of biogas energy, the information below will give a brief snapshot of the overall picture. As discussed in previous sections, biogas electricity projects in Vietnam often have medium capacity scales, of 0.5-20 MW. At this level, the total investment for each project will at the most (20 MW) be about US$ 40 million (for an average unit cost of US$ 2 million a MW, including waste treatment technology costs), or equivalent to about VND 820 billion.38 By that standard, according to existing regulations,39 it is safe to say that most potential biomass electricity projects in Vietnam in the immediate future will fall under the category B for projects.40 In the current decentralization system for investment licensing, biogas projects at the above mentioned sizes will be under the jurisdiction of provincial level People's Committees. The investment licensing procedures for category B projects (in zoned areas or to be amended to the existing zoning plan) have been provided for in the Governments Decree 12/2009/N-CP, dated Feb. 12, 2009, on development project and construction management. Below is some brief information pertaining to the workflow and procedures of applying for a biogas electricity project. Determining the type of project for application. In accordance with Article 2s (Decree 12) classifying criteria for investment projects and administrative jurisdiction for development and construction projects, foreign investment or joint venture for biomass electricity projects fall under the Projects financed by other funds group, including private funding or a mixture of pooled funding. The investors in this case may make their own decisions on how and to what extent the project should be managed. For projects financed by a mix of pooled funding, the shareholding partners will agree on the mode of project management or adopt the current management system for the largest share in the pool. Preparation, review and approval of development and construction projects. According to the current schemes, such biomass electricity projects as mentioned above will be required to prepare a feasibility study (Article 6, Decree 12). The project document will include a narrative run-down as required in Article 7, and the base design shall follow the instructions in Article 8 of this Decree.
Section 3.b (pg. 5), master plan for the development of the electrical grid in Vietnam, Prime Ministers Decision 1208/Q-TTg, July 21, 2011, approving the national electricity development master plan for 2011-2020 and vision to 2030. 38 Exchange rate: US$ 1 = VND 20,600 39 Annex 1, Classification of development and construction projects, attached to the Governments Decree 12/2009/N-CP, Feb. 12, 2009, on the management of development and construction projects. 40 These include development projects for electricity industry, oil and gas mining, chemicals, fertilizers, machine engineering, cement, metallurgy, minerals mining and processing, transport (bridges, seaports, river ports, airports, railroad, highway), and residential buildings with a total cost of VND 75-1,500 billion.
37
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For projects that are not found or not yet included in the industrys officially approved master plan, the investors will have to report to the relevant ministry or local government with the respective jurisdiction for review and acceptance of addition of the project in the master plan if they are allowed to do so or for subsequent reference to the Prime Minister for acceptance of such addition prior to preparation of project dossiers. Application package for review and approval of development and construction projects. The application package for review and approval of development and construction projects includes: Application for project review using the sample in Attachment II of this Decree; Project document, including the narrative run-down and base design; Other related legitimate documents. Development and construction projects review and approval authority. The decision making entity is responsible to undertake review of the project prior to giving the approval. Review of the base design will be done at the same time with the project document package, and not in another event. Relevant regulators in charge will duly give their comments on the projects base design. In case of biogas electricity, the provincial level Department of Industry and Trade (in charge of category B development and construction projects) will be the lead reviewing authority. Development and construction projects decision making authority. For projects financed by other funding or a mix of pooled funding, the investors may make their own decisions on how to carry out the investment and be responsible for such decisions.
Granting construction permits. Prior to project commencement, the investors must obtain the construction permit.
4.3. Background information about relevant local institutions and contact information for German companies reference also, information about the role and responsibility of different stakeholders and agencies in the biogas field
Below is a list of background information about relevant local institutions and contact information for German companies reference and also, information about the role and responsibility of different stakeholders and agencies in the biogas field. Table 4.3. Background information about key institutions related to biogas energy Institution/ Key roles and No Mail address Notes agency responsibilities 1 Ministry of 54 Hai Ba Trung, Hanoi, The lead government agency Industry and Vietnam in charge of energy industry Trade 2 Energy 54 Hai Ba Trung, Hanoi, Role: counseling, assisting Affiliated to General Vietnam the Minister of Industry and the Ministry of Administration Trade in public Industry and administration and doing Trade other governance jobs related to the energy industry (including new and renewable energy) Mandates and jurisdiction (new and renewable energy): - drafting and submitting to
70
No
Institution/ agency
Mail address
Key roles and responsibilities the Minister of Industry and Trade for approval the master plan for new and renewable energy for provinces and centrallygoverned cities, and conducive mechanisms and policies for new and renewable energy development; - Managing and monitoring the implementation of national target programs and projects for new and renewable energy development.
Notes
Department of New and Renewable Energy Vietnam Electricity Group
54 Hai Ba Trung, Hanoi, The official roles and Affiliated to Vietnam responsibilities of this the Energy agency are not yet released. General Administration 18 Tran Nguyen Han, Hanoi, Management, negotiation for Under the Vietnam connection of electricity Ministry of facilities to the national Industry and electrical grid; negotiation of Trade and electricity purchase and Government sales prices if a standard tariff is not available Energy 6 Ton That Tung, Hanoi, + Drafting the master plan Affiliated to Institute Vietnam for new and renewable the Ministry of energy development in Industry and regions, zones, provinces Trade and districts in Vietnam + participating in strategy development and policy making for the development of new and renewable energy in Vietnam; + consulting on renewable energy development projects; + researching and transferring renewable energy technologies. Provincial Of provinces and Negotiating, reviewing and Focal points level People's municipalities licensing development and are provincial Committees construction projects of Department of category B and lower Industry and Trade No. 1 Km 9+200, Nguyen Trai Rd., Providing technical and Affiliated to Electricity Thanh Xuan Nam Ward, engineering consultancy EVN Consulting Co. Thanh Xuan Dist., Hanoi services for electricity projects, civil industrial
71
No
Institution/ agency
Mail address
No. 2 32 Ngo Thoi Nhiem, Ward 7, Electricity Dist. 3, HCMC Consulting Co. No. 3 Level 32, 32 Ngo Thoi Electricity Nhiem, Ward 7, Dist. 3, Consulting Co. HCMC No. 4 11 Hoang Hoa Tham, Nha Electricity Trang City, Khanh Hoa prov. Consulting Co. Vietnam Sugarcane Association 172/3A Nguyen Tat Thanh, Ward 13, Dist. 4, HCMC
10
11
12
Sugar plants
In the provinces
Key roles and responsibilities projects, power source construction, installation and investment projects Providing technical and engineering consultancy services for electricity projects Providing technical and engineering consultancy services for electricity projects Providing technical and engineering consultancy services for electricity projects + The association has roughly 38 members being sugarcane joint-stock companies in Vietnam (sugar plants). + The association provides support to sugar plants to participate in electricity production and selling surplus power output to the national electrical grid. Direct management of bagasse-burned cogeneration plants
Notes
Affiliated EVN
to
Affiliated EVN
to
Affiliated EVN
to
NGO
13
Hanoi Technology University HCMC Technology University
No. 1, Dai Co Viet, Hai Ba Researching and consulting Trung, Hanoi on issues related to power plant technologies 268 Ly Thuong Kiet, Dist. 10, Researching and consulting HCMC on issues related to power plant technologies Da Researching and consulting on issues related to power plant technologies Researching and consulting on issues related to biogas technologies
14
15
Da Nang Nguyen Luong Bang, Technology Nang, Vietnam University
16
17
Can Tho Block II, Rd. Feb. 3, Ward University Xuan Khanh, Ninh Kieu Dist., Can Tho City. Tel: (84-0710) 3832663 - (840710) 3838474; Email: dhct@ctu.edu.vn. HCMC Linh Trung Ward, Thu Duc Agriculture Dist., HCMC. Tel: (84-8)and Forestry 38966780Fax: 84-8University 38960713
Affiliated to the Vietnam Sugarcane Association Under the Ministry of Education and Training Under the Ministry of Education and Training Under the Ministry of Education and Training Under the Ministry of Education and Training
Researching and consulting Under the on issues related to biogas Ministry of technologies Education and Training
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No
Institution/ agency
Mail address
Key roles and responsibilities
Notes
18
19
Email: vphanhchinh@hcmuaf.edu.vn; Website: http://www.hcmuaf.edu.vn Biogas Biogas Technology Center, Technology Add: 52 Alley 172/46/20 Au Center Co, Tu Lien, Tay Ho, Hanoi, Tel/Fax: (04) 3 719 76 72 -- Email: khaitruc@vnn.vn New and A9, # 18, Hoang Quoc Viet Renewable Rd., Cau Giay Dist., Hanoi; Energy Center Tel: 04.7912394 - Fax: 04.7912224 Email: info@ies.vn - Website: www.ies.vn Vietnam Biogas Association R. 104, Block 2G, Van Phuc Diplomatic Corps, 298 Kim Ma, Hanoi Email: huyendtn@biogas.org.vn Mobile: 098.222.3284/ Tel: 04.3.7261771/ Fax: 04.3.7261773 The Vietnam Biofuel Association was founded on Nov. 11, 2011.
Researching and consulting NGO on issues related to biogas technologies
Researching and consulting on issues related to new and renewable energy
20
Researching and consulting NGO on issues related to biogas technologies
21
Vietnam Biofuel Association
Researching and consulting NGO on issues related to biofuel
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References
1. 2. 3. 4. 5.
Energy Institute, Sep. 2010, draft Master plan for national electricity development for 2011-2020 and vision to 2030. EI/EVN, 2000, Master plan for new energy, 2000-2005-2010. Prime Minister, 2011, Decision 1208/Q-TTg, July 21, 2011, approving the Master plan for national electricity development for 2011-2010 and vision to 2030. General Statistics Office, Statistics Yearbooks for 2000-2010. Decision 709/2004/Q-NLDK, Apr. 3, 2004: guidelines on economic and financial analysis of investment projects and tariff for electricity projects, revised by Decision 2014/2007/Q-NLDK, June 13, 2007. MARDs Decision 1267/Q-BNN-KL, May 4, 2009. Decision 18/2007/Q-TTg, Feb. 5, 2007. Energy Institute, 2009, Master plan for renewable energy in Vietnam. Nguyen Duc Cuong, 2009, Calculation of greenhouse gas emission factor in Vietnam for DNA for introduction. 2009.
6. 7. 8. 9.
10. Decree on incentives and support for environmental preservation; No. 04/2009/N-CP, Jan. 14, 11. Energy Institute, 2007, Training materials for Cuban experts on medium and large sized biogas
technologies.
12. Administration of Animal Husbandry Netherlands Development Agency (SNV), Apr. 2007,
Biogas for animal husbandry in Vietnam program, training materials.
13. Ministry of Education and Training, Hanoi Agriculture University, Nov. 2009, Report at the
seminar on breeding waste: status and solutions.
14. Prime Ministers Decision 130/2007/Q-TTg, Aug. 2, 2007, on specific mechanisms and policies
for Clean development mechanism projects.
15. Tran Viet Dung et al, Feb. 2009, Biogas user survey, 2007-2008. 16. Bastiaan Teune, SNV Vietnam, 2007, The Biogas Programme in Vietnam, Amazing results in
poverty reduction and economic development.
17. Ho Thi Lan Huong, Commercialization of the biogas sector in Vietnam, 2006. 18. Doan Van Binh, Development of renewable energy: under the policy, market and technology
perspectives, document of Vietnam-China international workshop Biogas development and utilization technologies, Hanoi, Oct. 2006.
19. Ho Thi Huong, Biogas for animal husbandry in Vietnam program, lessons learnt from phase I,
document of Vietnam-China international workshop Biogas development and utilization technologies, Hanoi, Oct. 2006.
20. Energy Institute, Biogas user survey, 2005.
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21. Rural Water and Sanitation Program, 5-year completion report, 2000-2005, Hanoi, 2005. 22. Duong Nguyen Khang, HCMC Agroforestry University, Status and trend of biogas technology
development in Vietnam.
23. Prime Ministers Decision 10/2008/Q-TTg, approving the Strategy for animal husbandry
development by 2020.
24. Ministry of Finances implementing circular for the Prime Ministers Decision 394/Q-TTg,
dated March 13, 2006, on promoting new developments and expansion of concentrated, industrial slaughtering houses and facilities for livestock, poultry storage and processing and poultry breeding farms, No. 58/2006/TT-BTC, June 26, 2006.
25. Decision of the Ministry of Agriculture and Rural Development ratifying Regulations on
accreditation of good animal husbandry practice (VietGAHP) certificates for dairy cow, pig, poultry and bee.
26. Circular 42/2006/TT-BNN, June 1, 2006, guiding the implementation of the Prime Ministers
Decision 394/Q-TTg, dated March 13, 2006, on promoting new developments and expansion of concentrated, industrial slaughtering houses and facilities for livestock, poultry storage and processing and poultry breeding farms.
27. Ministry of Finance and Ministry of Agricultures Joint Circular 66/2003/TTLT-BTC-NNPTNT,

July 3, 2003, providing guidelines on management, allocation and final accounts settlement for the National target program of rural water and sanitation.
28. Information from the Livestock Waste Management in East Asia Project (LWMEA). 29. Others: information from Vietnamese on-line newspaper, websites, articles, forums, workshops,
conferences in Vietnam.
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Appendices
Appendix 1. Industrial scale alcohol producers
No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Name of plant Hanoi Liquor JS Co. Thang Long JS Co. Binh Tay Alcohol and Liquor JS Co. Dong Xuan Liquor Co. International Liquor JS Co. Phu Yen Food Technology Co. Vietnam Liquor and Alcohol Ltd. Co. Thanh Hoa Beer Brewery Saigon Nghe Tinh Beer Co. Vietnam Beer Factory JV Co. San Miguel factory Ha Long Beer and Beverages JS Co. Ha Tay Beer Co. Hue Beer Co. Hanoi Hai Duong Beer JS Co. Saigon Beer and Liquor Co. (SABECO) Hanoi Beer and Liquor Co. (HABECO) San Miguel Vietnam Beer Co. Address 94 Lo Duc, Hai Ba Trung, Hanoi 3/191 Lac Long Quan, Cau Giay, Hanoi 621, Pham Van Chi, Ward 7, Dist. 6, HCMC Thanh Ba township, Phu Tho town, Phu Tho 37 Dang Thi Nhu, Nguyen Thai Binh Ward, Dist. 1, HCMC 235 Highway 1A, Ward 8, Tuy Hoa City, Phu Yen 621 Pham Van Chi, Ward 7, Dist. 6, HCMC 152 Quang Trung, Ngoc Trao Ward, Thanh Hoa City 54 Phan Dang Luu, Vinh City, Nghe An prov. 2 Ngo Duc Ke (Level 15), Dist. 1, HCMC 422-424 Ung Van Khien, Ward 25, Binh Thanh Dist., HCMC 130 Le Loi, Yet Kieu Ward, Ha Long City, Quang Ninh Km 15+500, Rd. 427, Van Tao commune, Thuong Tin dist., Hanoi 243 Nguyen Sinh Cung, Hue Quan Thanh Str., Hai Duong City, Hai Duong prov. 6 Hai Ba Trung, Dist. 1, HCMC 183 Hoang Hoa Tham, Ba Dinh, Hanoi Highway 1, Suoi Hiep commune, Dien Khanh dist., Khanh Hoa prov.
76
Appendix 2. Industrial scale aquatic production and processing facilities

No 1 2 3 4 5 6 Name of institution Vietnam Aquatic production and export Association Vietnam Aquaculture Company Quang Ninh Aquatic Import Export JS Co. Quang Ninh Aquatic Import Export JS Co. No. 2 Ha Long Canned Food JS Co. No. 42 Aquatic processing plant, branch of Haiphong Aquatic export processing Co. Ha Long Services and Import, Export JS Co., Ha Long 2 export processing plant Ha Long Aquatic processing plant, Ha Long Aquatic development of services JS Co. Xuan Thuy Aquatic processing plant, branch of Hanoi Aquatic import export JS Co. Address 218, Lot A, An Phu project, An Khanh, Rd. 6, An Phu Ward, Dist. 2, HCMC 2-4-6, Dong Khoi Rd., Dist. 1, HCMC 35 Ben Tau, Ha Long city, Quang Ninh prov. Village 7, Rd. 10, Quang Yen dist., Yen Hung dist., Quang Ninh prov. 43 Le Lai, Ngo Quyen Dist., Haiphong City 101 Ngo Quyen, Ngo Quyen Dist., Haiphong City 409 Le Lai, Ngo Quyen Dist., Haiphong City 409 Le Lai, Ngo Quyen Dist., Haiphong City Telephone (84 8) 62810430 (84 8) 62810441 (84.8) 8297214 (84.8) 8291924 (033). 825196 (033). 875269 (0313). 836692 (0313). 837204 837384 (0313).827929
(0313). 836346 (0350). 886008 886005 (037). 851847 (038). 829127 (039).868.333 (052).822322/ 821494 (052).866471
9 10 11 12 13 14
15
16 17 18
19
Xuan Vinh commune, Xuan Truong dist., Nam Dinh prov. Le Mon IP, Thanh Hoa City, Thanh Hoa Aquatic Import Export Co. Thanh Hoa prov. Nghe An Aquatic Import Export JS Nghi Hai Ward, Cua Lo Co. town, Nghe An prov. South Ha Tinh Aquatic import export Vung Ang IP, Ky Anh dist., JS Co. Ha Tinh prov. Quang Binh Aquatic Import Export JS 8A, Huong Giang, Dong Hoi Co. City, Quang Binh prov. Thanh Trach commune, Bo Gianh River Aquatic frozen products Trach dist., Quang Binh plant, Giang River Co. prov. 165 Nguyen Sinh Cung, Huong River JS Co., No. 1 processing Thuan An, Hue City, Thua plant Thien Hue prov. Da Nang Aquatic services Workshops 1 & 2, Tho Quang Aquatic IP, Tho Quang Ward, Son export processing Co. Tra Dist., Da Nang City Frozen processing workshop, Quang 580 Cua Dai, Hoi An town, Nam Aquatic export processing JS Co. Quang Nam prov. Lot 7, Dien Nam IP, Dien Hai Ha Co. Ltd. (ALPHASEA Co. Ngoc, Dien Ban dist., Quang Ltd.) Nam prov. Km 943, Highway 1A, Dien Aquatic processing plant, Asia Food Thang commune, Dien Ban processing Co. Ltd. dist., Quang Nam prov.
(054).869713/824030
(05113)922006 (0510).861249 (0510).843620
0510.3869526
77
No 20 21
Name of institution An Hai Aquatic processing export plant, Binh Dinh Aquatic JS Co. F 17 frozen aquatic processing plant, Nha Trang Seafood F 17 JS Co. F 90 frozen aquatic processing plant, Nha Trang Seafood F 90 JS Co. Frozen aquatic processing plant, Luong Son branch, Dai Thuan JS Co. Phan Thiet Aquatic processing plant, Binh Thuan Import Export JS Co. Highland Dragon plant Aquatic export processing plants II & III (F 20), Ba Ria-Vung Tau Aquatic export processing JS Co. Aquatic import, export, processing JS Co., Ba Ria-Vung Tau, Aquatic export processing plant No. 1 Trung Son private company, Trung Son aquatic export processing plant, branch 3, frozen products workshop Hoang Khang aquatic processing plant, Phuoc An Co. Ltd. Tung Kong aquatic processing and ice Co. Ltd. Canned Food plant, Special aquatic food JS Co. Canned food plant, Toan Thang Co. Ltd. (Evewin) Upmarket Canned Food plant, Special aquatic food JS Co. Workshop 2, No. 1 Aquaculture JS Co. No. 4 Aquaculture JS Co. Workshop 1, No. 5 Aquaculture JS Co. Tan Thuan export food processing factory Workshop 3, No. 1 Aquaculture JS Co.
Address 2, Tran Hung Dao, Quy Nhon City, Binh Dinh prov. 58B, Rd. Apr. 2, Vinh Hai Ward, Nha Trang City, Khanh Hoa prov. 1 Phuoc Long, Binh Tan Ward, Nha Trang City, Khanh Hoa prov. Luong Hoa village, Vinh Luong commune, Nha Trang City, Khanh Hoa prov. 75-77 Vo Thi Sau, Phan Thiet City, Binh Thuan prov. 15, Rd. 6, Song Than I IP, Di An dist., Binh Duong prov. 460 Truong Cong Dinh, Ward 8, Vung Tau City, Ba Ria-Vung Tau prov. Highway 51A, Phuoc Trung Ward, Ba Ria town, Ba RiaVung Tau prov. Lang Cat village, Tan Hai commune, Tan Thanh dist., Ba Ria-Vung Tau prov. Lang Cat village, Tan Hai commune, Tan Thanh dist., Ba Ria-Vung Tau prov. Rd. 25C, Nhon Trach III IP, Nhon Trach dist., Dong Nai prov. 213 Hoa Binh, Hoa Thanh Ward, Tan Phu Dist., HCMC Rd. A, Lot E, Binh Chieu IP, Thu Duc dist., HCMC 213 Hoa Binh, Hoa Thanh Ward, Tan Phu Dist., HCMC 536 Au Co, Ward 10, Tan Binh dist., HCMC 320 Hung Phu, Dist. 8, HCMC 100/26 Binh Thoi, Ward 14, Dist. 11, HCMC Village 3, Tan Thuan Dong Ward, Dist. 7, HCMC 1004A Au Co, Phu Trung Ward, Tan Phu dist., HCMC
Telephone (056).892004 (058).831039
22
(058).832088
23 24 25
58.836825 (062).822323 - 821423824214 (0650).790201
26
(064).580085
27
(064).826217
28
64,636,288
29
064.636328-216529
30 31 32 33 34 35 36 37 38
(08).8606085 (08).8979888 08.8605301 (08).8647473 8.9543361 (08).8650423 (08).8725776 (08).9741135
78
No 39 40
Name of institution Thang Loi frozen processing plant, Saigon Aquaculture JS Co. Saigon aquaculture JS Co. (Van Duc export food JS Co.) Frozen processing plant, Hoang Ha Trade Co. Ltd. Phuoc Hung aquatic processing plant, Van Duc export food JS Co. Frozen processing plant, Gia Dinh import export JS Co. Long An aquatic export processing plant, Long An aquaculture and export JS Co. Frozen processing plant, Viet Cuong canned food Co. Frozen products plant, Pacific-Long An Aquaculture Co. Ltd. Ba Tri aquaculture plant
Address Lot 4-6-8, Rd. 1A, Tan Tao IP, Binh Tan dist., HCMC Lot C24-24b (C27)/II, Rd. 2F, Vinh Loc IP, Binh Chanh, HCMC Lot III-22, Rd. 19/5A, Industrial group III, Tan Binh IP, Tan Phu dist., HCMC Rd. 6, Vinh Loc IP, Binh Chanh dist., HCMC 285 No Trang Long, Ward 13, Binh Thanh dist., HCMC 31, Nguyen Thi Bay, Ward 6, Tan An commune, Long An prov. Village 1, Nhut Chanh commune, Ben Luc dist., Long An prov. Lot LA1, Rd. 1, Trans-Asia IP, Duc Hoa dist., Long An prov. Village 8, An Thuy commune, Ba Tri dist., Ben Tre prov. Phong Thuan village, Tan My Chanh commune, My Tho City, Tien Giang prov. Dong Hoa village, Song Thuan commune, Chau Thanh dist., Tien Giang prov. 119, Highway 1A, Ward 7, Soc Trang town, Soc Trang prov. 199A, Highway 1A, Ward 7, Soc Trang town, Soc Trang prov. Lot N2, An Nghiep IP, Soc Trang City, Soc Trang prov. 333 Cao Thang, village 2, ward 8, Ca Mau City, Ca Mau prov. No. 3, Airport Rd., Nam Can town, Nam Can dist., Ca Mau prov. Tran Thoi commune, Cai Nuoc dist., Ca Mau prov. No. 4, Nguyen Cong Tru Rd., Ca Mau City, Ca Mau
Telephone (08).7541890 (08).7652063
41
08.8155319
42 43 44
08.425.3090 85,533,387 (072).826267
45
072.872377
46
072.751285 075.856290 856102 (073).850021
47
48
An Lac Co. Ltd.
49
Asia frozen processing plant, Asia export canned food Co. Ltd. Tan Long frozen processing plant, Soc Trang aquaculture JS Co. Phuong Nam Co. Ltd. Branch, Western export aquatic processing plant An Phu frozen processing plant, Soc Trang aquaculture JS Co. Plant No. 2, Ca Mau aquatic processing and import export Co. (CAMIMEX-II) Workshops 1&2, Nam Can Aquaculture import export JS Co. Nam Long aquatic export processing plant, CADOVIMEX aquatic processing and import export JS Co. Ca Mau Fish harbor frozen processing plan, Ca Mau aquatic processing and
73.610211-073.833315
50
(079).822164
51 52 53
(079). 812161 079.623777 (0780).831600
54
(0780).877148
55 56
(0780).881288 0780 835805
79
No
Name of institution services JS Co.
Address prov. 333 Cao Thang, village 2, ward 8, Ca Mau City, Ca Mau prov. 999, Ly Thuong Kiet, ward 6, Ca Mau City, Ca Mau prov. Km 2184, Highway 1A, Tra Kha, Bac Lieu town, Bac Lieu prov. Highway 1A, Ward 8, Bac Lieu town, Bac Lieu prov. Ward 8, Highway 1A, Bac Lieu town, Bac Lieu prov. Lot CIII-1, Zone C, Sa Dec IP, Sa Dec town, Dong Thap prov. Vam Cong IP complex, Binh Thanh commune, Lap Vo dist., Dong Thap prov. Lot II, 18B1-18B2, Tra Noc 2 IP, Phuoc Thoi ward, O Mon dist., Can Tho City. Lot 2.17, Tra Noc II IP, Can Tho City. Le Hong Phong Rd., Binh Thuy ward, Can Tho City. Lot 4, Tra Noc IP, Binh Thuy dist., Can Tho City. Km 2078+300, Highway 1, Ba Lang ward, Cai Rang dist., Can Tho City Lot 3, Tra Noc IP, Binh Thuy dist., Can Tho City. Zone 1, Ba Lang ward, Cai Rang dist., Can Tho City Lot A4, TTCN IP, Thoi Thuan commune, Thot Not dist., Can Tho City. Tan Phu Thanh commune, Chau Thanh A dist., Hau Giang prov. 197, Rd. 14/9, ward 5, Vinh Long town, Vinh Long prov.
Telephone
57
Plant No. 4, Ca Mau aquatic processing and import export Co. Frozen processing plant V, Ca Mau aquatic processing and import export Co. Ba Lieu aquatic processing and export plant, Minh Hai Aquaculture JS Co. Plant No. 3, Tra Khai aquatic processing factory, Minh Hai Aquaculture JS Co. Workshop I, Minh Hai Aquaculture JS Co. Thanh Hung aquatic processing plant, Thanh Hung Co. Ltd. Workshop 1, Multination aquatic processing plant, Multination Investment and Development JS Co. Bien Dong Aquaculture Co. Ltd. Workshop I, Binh An Aquaculture JS Co. Aquaculture 404 Co. Can Tho Trade and Import export partnership plant (CAFISH), Can Tho Aquaculture import export JS Co. (CASEAMEX) Workshop 1, Thuan Hung Co. Ltd. (THUFICO) Can Tho aquatic export plant (CASEAFOOD) TFC aquatic processing plant, Thuan Hung Co. Ltd. (THUFICO) Atlantic N.V frozen aquaculture plant, Atlantic Co. Ltd. Tay Do Aquaculture plant, CAFATEX Aquaculture JS Co. Workshop II, Hung Vuong Co. Ltd., Vinh Long
(0780).837499
58
(0780)560721
59
(0781).821956
60 61 62
(0781).832090 0781.780149 067.763428
63
067.680383
64 65 66
(0710).844201 0710 251403 0710.841083
67
0710.842989
68 69 70 71
071.911624 0710.842989 071.911888 076.834065
72 73
071.913571 070 823273
80
No 74 75 76
Name of institution Workshops 1&2, Cuu Long Aquaculture JS Co. Frozen processing plant 7, An Giang aquaculture import export JS Co. Kien Giang KISIMEX plant, Kien Giang Aquaculture JS Co. (KISIMEX) Kien Luong KISIMEX plant, Kien Giang Aquaculture JS Co. (KISIMEX)
Address 36 Bach Dang, ward 4, Tra Vinh town, Tra Vinh prov. 1234, Tran Hung Dao, Long Xuyen City, An Giang prov. 62 Ngo Thoi Nhiem, An Hoa ward, Rach Gia town, Kien Giang prov. Ba Hon village, Duong Hoa commune, Kien Luong dist., Kien Giang prov.
Telephone 074.852465 076.852368 077.910580
77
077.854115
Appendix 3. Industrial scale sugar production and processing facilities

No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Company Cao Bang sugarcane Co. Tuyen Quang sugarcane Co. Son La sugarcane Co. Hoa Binh sugarcane Co. Lam Son sugarcane JS Co. Vietnam-Taiwan sugarcane Co. Ltd. Nong Cong sugar Co. Quang Ngai sugar factory Binh Dinh sugar Co. Tuy Hoa sugarcane Co. Cam Ranh sugar plant Kon Tum sugarcane Co. Bourbon Gia Lai sugarcane Co. Ltd. Dac Nong sugarcane Co. Bourbon Tay Ninh sugarcane Co. Ltd. (France) Bien Hoa sugar JS Co. Address Ta Lung commune, Phung Hoa dist., Cao Bang town, Cao Bang prov. 5 Tran Hung Dao, Minh Xuan ward, Tuyen Quang City, Tuyen Quang prov. Ward 1, Hat Lot town, Mai Son dist., Son La prov. Cluster 19, Huu Nghi ward, Hoa Binh City, Hoa Binh prov. Lam Son town, Tho Xuan dist., Thanh Hoa prov. Thanh Van commune, Thach Thanh dist., Thanh Hoa prov. Thang Long commune, Nong Cong dist., Thanh Hoa prov. 2 Nguyen Chi Thanh, Quang Ngai City, Quang Ngai prov. Dong Pho commune, Tay Son dist., Binh Dinh prov. Hoa Phu commune, Tuy Hoa dist., Phu Yen prov. Tan Quy village, Cam Thanh Bac commune, Cam Ranh, Khanh Hoa Vinh Quang commune, Kon Tum City, Kon Tum prov. 561 Tran Hung Dao, Treo Reo ward, Adumba town, Gia Lai prov. Tam Thang IP, Tam Thang commune, Cu Rut dist., Dac Nong prov. Tan Loi village, Tan Hung commune, Tan Chau dist., Tay Ninh prov. Tan Phuoc village, Tan Binh commune, Tay Ninh town, Tay Ninh prov.
81
No 17 18 19 20 21 22 23
Company Binh Dinh sugar Co. Binh Thuan sugar plant Ben Tre sugar Co. Kien Giang sugarcane Co. (Kien Giang sugar plant) Tra Vinh sugarcane Co. Soc Trang sugarcane Co. La Nga sugarcane JS Co.
Address Vo Minh Duc Rd., zone 5, Phu Kho ward, Thu Dau 1 town, Binh Duong prov. Ma Lam town, Ham Thuan Bac dist., Binh Thuan prov. Thuan Dien village, An Thiep commune, Chau Thanh dist., Ben Tre prov. Long Thach commune, Giong Rieng dist., Kien Giang prov. Cho village, Luu Nghiep Anh commune, Tra Cu dist., Tra Vinh prov. 845 Pham Hung Rd., ward 8, Soc Trang City, Soc Trang prov. Village 4, La Nga commune, Dinh Quan dist., Dong Nai prov.
82

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EXPLORING BIOGAS MARKET OPPORTUNITIES IN VIETNAM

EXPLORING BIOGAS MARKET OPPORTUNITIES IN VIETNAM

Exploring Biogas Market Opportunities in Vietnam

2. UNDERSTANDING AND ASSESSING THE BIOGAS ENERGY MARKET IN VIETNAM

Exploring Biogas Market Opportunities in Vietnam

4. RECOMMENDATIONS FOR POTENTIAL PROJECTS IN THE BIOGAS ENERGY TECHNOLOGY MARKET

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

1. Review and analysis of the electricity industry in Vietnam

Power demand (GWh) Nhu cu in (GWh)

Exploring Biogas Market Opportunities in Vietnam

440 600 105 300 100 600 600 537

169.5 37.5 330 3,197

EVN EVN EVN

Exploring Biogas Market Opportunities in Vietnam

Generators 8GT+S9+S10 4GT+ST23,26 3GT+S14 2GT+ST3 4GT 4GT

Owner Joint venture EVN EVN EVN EVN EVN Private

1 B Ra 2 Ph M 21 3 Ph M 1 4 Ph M 4 5 Th c 6 Cn Th V VI Diesel-fired and micro hydropower plants Non-EVN

2 3 2 2 2 2 2 3 2 2 2 2 2 2 3 1 2GT+ST3 2GT+ST3 2GT+ST3 1GT 2GT+ST1 2GT+ST4

Exploring Biogas Market Opportunities in Vietnam

Rated capacity (MW) 13.5 72 24 21 1000

Owner Foreign investors Foreign investors Foreign investors PVN Imported

23 Amata 24 Vedan 25 Bourbon 26 Ph M ammonium nitrate

27 Import from China

Figure 1.2. Distribution of sources, by owner

Foreign NT nc ngoi investors 10% 10%

Joint C phn ventures 11% 11%

Figure 1.3. Distribution of sources, by supply mode and fuel

Nhigas-fired t in du Fuel 3% thermoelectricity 3%

Nhi t in than Coal-fired 18% thermoelectricity

Nhi t in chy Gas-fired thermoelectricity kh 2% 2%

Exploring Biogas Market Opportunities in Vietnam

1.2. Electricity pricing

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

1,117 1,192 1,217 1,291 1,242 1,291

5.4 5.7 5.8 6.2 5.96 6.2

Exploring Biogas Market Opportunities in Vietnam

603 573 575 1,772

590 567 568

561 563 555

529 481 511

498 468 501

484 460 492

242 230 246

1.3. Power production and potentials to 2020 (next 10 years)

Exploring Biogas Market Opportunities in Vietnam

Exploring Biogas Market Opportunities in Vietnam

Figure 1.4. Distribution of power sources by 2020

NLTT Renewable energies 5.6% 5.6%

Exploring Biogas Market Opportunities in Vietnam

1.5. Electricity market actors

1.6. Roadmap for the competitive electricity market

Exploring Biogas Market Opportunities in Vietnam

b) Phase 2, stage 1: full-fledged competitive electricity generation market (2009-2014).

c) Phase 1, stage 2: pilot competitive wholesale electricity market (2015-2016).

d) Phase 2, stage 2: full-fledged competitive wholesale electricity market (2017-2022).

) Phase 1, stage 3: pilot competitive retail electricity market (2022-2024).

e) Phase 2, stage 3: full-fledged competitive retail electricity market (from 2024).