Vietnam Sugar Association Proposes Minimum 8.47 US cent/kWh for Biomass Electricity

Recently, the Vietnam Sugar Association (VSSA) officially submitted a proposal to the Prime Minister to address obstacles in developing biomass electricity from sugar mills. The most notable proposal is to maintain a unified support electricity price at 8.47 US cents/kWh, aiming to effectively harness this clean energy source.

Background of the Proposal

In the context of Vietnam's efforts to diversify energy sources and move toward sustainable development goals, biomass electricity from sugar cane is emerging as a promising solution. However, sugar mills continue to face numerous challenges in developing biomass electricity models due to unstable pricing mechanisms and cumbersome regulations.

The Vietnam Sugar Association argues that a clear and stable policy for biomass electricity pricing will encourage businesses to invest in this sector, contributing to the addition of clean energy sources to the national power system.

Key Proposal Contents

In the submission to the government, VSSA presented specific recommendations:

• Maintain the support electricity price for biomass electricity from sugar cane at 8.47 US cents/kWh
• Establish a stable, long-term electricity pricing mechanism to enable business investment planning
• Adjust current regulations to create favorable conditions for sugar mills to develop biomass electricity
• Create a clear legal framework for electricity trading between sugar mills and electricity purchasing units

Why 8.47 US cents/kWh for Biomass Electricity?

The 8.47 US cent/kWh price proposed by VSSA is not arbitrary but based on calculations of production costs for biomass electricity from sugar cane. This price ensures economic feasibility for sugar mills while remaining competitive compared to other renewable energy sources.

Biomass Electricity from Sugar Cane: Potential and Challenges

Vietnam is one of the largest sugar cane producers in Southeast Asia, with an annual output of approximately 18-20 million tons. This creates abundant raw material for biomass electricity production.

Sugar mills can utilize bagasse - a by-product of sugar production - to burn and generate steam, producing electricity and heat for the mill. According to calculations, each ton of sugar cane produces about 250-300kg of bagasse, enough to generate approximately 150-200 kWh of electricity.

However, to develop effectively, sugar mills need to invest in modern systems to optimize conversion efficiency. This initial investment cost is a significant barrier for many businesses, especially small and medium-sized enterprises.

Expert Perspectives

According to energy analysts, biomass electricity from sugar cane offers several advantages compared to other renewable energy sources:

• Stable and predictable supply (not dependent on weather conditions like solar power)
• Proven technology readily available in the market
• Helps address agricultural by-product treatment issues
• Reduces greenhouse gas emissions compared to coal-fired power

However, some experts have also expressed concerns about the sustainability of raw materials if biomass electricity from sugar cane is developed on a large scale. Clear planning is needed to ensure it does not impact sugar production and food security.

Industry Reactions

Many businesses in the sugar industry believe that VSSA's proposal is necessary and timely. Mr. Nguyen Van V, Director of a sugar mill in Tay Ninh, shared: "We have invested in biomass electricity systems, but operations have not been effective due to unstable electricity selling prices. A fixed price as proposed will help us develop long-term business plans."

However, some opinions suggest that the feasibility of this model needs more careful consideration, particularly regarding competition with other renewable energy sources currently enjoying government incentives.

The Position of the Vietnam Sugar Association

The Vietnam Sugar Association (VSSA), established in 1998, is a socio-professional organization representing sugar production and business enterprises nationwide. The association operates with the goal of developing Vietnam's sugar industry sustainably, enhancing competitiveness, and protecting the rights of its members.

In recent years, VSSA has actively participated in policies related to the sugar industry, particularly regarding sugar prices, tax policies, and biomass electricity development. This latest proposal is one of the association's efforts to promote the sugar industry's transition to a circular economy model.

Projected Development of Biomass Electricity from Sugar Cane

If VSSA's proposal is accepted, Vietnam's sugar industry could achieve significant results:

• Increase biomass electricity capacity from sugar cane to 500-700 MW by 2025
• Reduce emissions by approximately 1-1.5 million tons of CO2 annually
• Create an additional 2,000-3,000 direct and indirect jobs
• Increase income for sugarcane farmers through by-product utilization

Conclusion

The Vietnam Sugar Association's proposal for a minimum electricity price of 8.47 US cents/kWh for biomass electricity represents a significant step in promoting renewable energy development from the country's available resources. If approved by the government, this policy would not only help the sugar industry develop sustainably but also contribute to Vietnam's clean energy transition goals.

However, effective implementation requires coordination between various ministries and sectors, along with commitment from businesses. At the same time, strict monitoring mechanisms are needed to ensure transparency and efficiency of biomass electricity projects.

In the context of climate change and increasing energy demand, biomass electricity from sugar cane promises to become an important component of Vietnam's energy system, contributing to the country's sustainable development.

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