Commercial Development Opportunities for Small and Medium Scale Biogas in Vietnam
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1 Commercial Development Opportunities for Small and Medium Scale Biogas in Vietnam Dagmar Zwebe Sector Leader Renewable Energy Vietnam June 2013
2 Content of this presentation Introduction to SNV History of Biogas in Vietnam SNV Domestic Biogas Developments in short SNV s Medium Scale Biogas Developments Bottlenecks for commercial scale up 2
3 About SNV Netherlands based non-profit, international development organisation, with >45 years of on the ground experience. Local presence: 800 professionals in 36 developing countries in Africa, Asia and Latin America. Capacity development services to local public and private organisations increasing access to basic services, income and employment. Effectiveness empowering local actors Connection leveraging critical mass Scalability seeking a systems change Market-Based Solutions to Eliminate Poverty 3
4 SNV Presence Worldwide 4
5 What we do 3 sectors Agriculture Renewable Energy & REDD+ Water, Sanitation and Hygiene 4 key success factors Inclusive development Systemic change Local ownership Contextualised solutions 3 roles Advisory services Knowledge networking Evidence Based Advocacy 5
6 SNV and Renewable Energy We currently work on: Domestic biogas: > 500,000 households reached (Dec, 2012) Carbon Finance: credits earned in Asia on biogas programmes Nepal, Vietnam, Cambodia. Programmes in Pakistan CDM-PoA registered. Biomass fuelled improved cook stoves: founding partner of the Global Alliance for clean cook stoves (targeting 350,000 ICS by 2017 in Nepal and Lao and another 200,000 ICS in Africa) Solar PV lighting and communication: several initiatives running Improved Watermills: benefitting > 300,000 households Bio-fuels: benefitting households 6
7 Content of this presentation Introduction to SNV History of Biogas in Vietnam SNV Domestic Biogas Developments in short SNV s Medium Scale Biogas Developments Bottlenecks for commercial scale up 7
8 Biogas Developments in Vietnam First developments started mid 60 and were put on hold until 1975 Between 1976 and the late 80 several donor funded projects stimulated local design development with support from international TA By 90 about 2000 installations were constructed, all small scale Development continued and in 03 SNV -in cooperation with the Ministry of Agriculture and Development (MARD)- initiated a first large scale biogas program in Vietnam In the last decade awareness increased and stimulated interest and investments in larger scale technology 8
9 Animal Husbandry in Vietnam See also Biomass Business Opportunities Viet Nam Report Published in 2012 by Agency NL, written by SNV Vietnam 9
10 Animal Farming in Vietnam The livestock sector is worth approximately USD 3 billion per annum It accounts for 6-7% of GDP of Vietnam. It contributed 22% of agricultural production during , increasing to about 44% in
11 Animal Farming in Vietnam Farming household The number of farming households is estimated at >6,3 million Biogas has reached less than 3% of the farming households A farm is 'a relatively larger production scale defined as 100 pigs, or 50 cows/ buffaloes, or 2,000 chickens/birds Estimations from 2006 are >17,500, recent indications by MARD are that his number has grown to >26,000 by 2012 Growth of medium scale farms is estimated at >10% per year Anaerobic digestion systems have reached less than 0.5% of the medium and large scale farms The total manure production in Vietnam is estimated around 95 million tonne per year (GSO, 2010). 11
12 Content of this presentation Introduction to SNV History of Biogas in Vietnam SNV Domestic Biogas Developments in short SNV s Medium Scale Biogas Developments Bottlenecks for commercial scale up 12
13 BP for the Animal Husbandry Sector A cooperation between The Ministry of Agriculture and Rural Development (MARD) SNV Netherlands Development Organisation DGIS Dutch Ministry of Foreign affairs Mason Training Bac Ninh May 2011 To develop a commercially viable domestic biogas sector. To improve livelihood and life quality of rural farmer in Vietnam through exploiting the market and non-market benefits of domestic biogas plants. 13
14 Most Popular Domestic Biogas Models Most Popular Models KT1/KT2 (fixed dome) Vacvina (square shaped) Composite model HDPE / covered lagoon Fixed Dome Da Nang EQ2 Can Tho University Plastic Bag 14 14
15 SNV s approach for market development Develop private sector Access to (Micro) Finance Quality Management Capactiy Building and Training Sector Development (Financial) Incentives R&D Extension Promotion, Marketing and Sales 15
16 Training
17 Finished plants 17
18 Most common appliances Cookstoves (household and pig feed cooking) Lamps Piglet heating Egg Hatching Live breading Boilers (for showering) Rice cooking 18
19 Domestic Biogas Developments Free market activity is now created 30% of the total market is estimated to be commercial 50% of the number of digesters that are constructed inside the BP program supported by SNV, is also built commercially. 35,000 30,000 25,000 20,000 15,000 10,000 5, * BP QSEAP LIFSAP Not covered 19
20 BP Accomplishments 130,000 biogas plants installed in 53 provinces >600,000 beneficiaries >1000 Biogas Enterprises developed >5 tco 2 eq. reduced per plant per year International recognition through Energy Globe Award 2006 Ashden Award 2010 World Energy Award
21 Content of this presentation Introduction to SNV History of Biogas in Vietnam SNV Domestic Biogas Developments in short SNV s Medium Scale Biogas Developments Bottlenecks for commercial scale up 21
22 Background & rationale Currently there are >26,000 medium to large farms in Vietnam The Government of Vietnam stimulates the growth from small scale (household farming) to medium and large scale farming This results in a growth of medium scale farms of >10% p.a. Only less than 0.5% is currently served by anaerobic digesters Service capability is low Other projects and programs (only a few) focussed on foreign technologies with high investments, limiting the access for the average farmer No strategy for scale up or national wide coverage has been developed 22
23 SNV s approach: Sector Development Market introduction of the medium-scale plug-flow biogas digester in Vietnam Create demand (through awareness raising) Strengthen the supply chain through capacity building activities and introducing affordable technologies With a short term goal of designing and constructing 10 low-cost, medium-scale biogas digesters for farms with 300-1,500 pigs Develop the scale-up strategy for market development Partners: 23
24 Medium Scale Biogas Technology Working principle same as small scale digester = opportunities to utilise an already developed skills base Constructed using locally sourced materials = sustainable, reduced dependence on developing supply chain Modular = adaptable 24
25 Medium Scale Biogas Technology (cont d) 300m 3 digester at Mr Nghia s farm in Nam Dinh close to completion April
26 Medium Scale Biogas Technology (cont d) 500m 3 digester at Mr Chau s farm in Quang Ninh close to completion October
27 Case Study Mr. Quang s Farm, Bac Ninh 800 fattening pigs 200m 3 digester Open lagoon treatment, overflowing into public irrigation canal Complaints about smell and downstream condition of water $11,800 (9,500 ) total construction cost 50% materials, 30% labour, 10% equipment, 10% VAT Farm power requirements heaters, ventilation, pumping 8,000 $0.06/kWh = $475/mth Biogas production (calculated) 100m 3 biogas/day equivalent to 5,000 kwh/mth electricity (60%) 300 tonne CO 2e avoided per year Actual biogas use: distributed and sold to neighbour 27
28 Case Study (cont d) Open lagoon bubbling methane and over-flowing into irrigation canal 28
29 Case Study (cont d) February
30 Case Study (cont d) April
31 Case Study (cont d) July
32 SNV s aimed next steps for Sector Development Short term A Phase II 18 month to 2 year 5 provinces, 15 digesters constructed Innovation on basic design And/or Longer term Low Carbon Farms 4 to 5 year programme 30 provinces, 200 digesters constructed Technical innovation adapted models, designs and materials Inclusion post treatment and linkages with agricultural use of bioslurry High level technical training and mentoring 10 engineering Co s Construction, O&M training Business training and mentoring Awareness, advocacy, policy, regulation 32
33 Content of this presentation Introduction to SNV History of Biogas in Vietnam SNV Domestic Biogas Developments in short SNV s Medium Scale Biogas Developments Bottlenecks for commercial scale up 33
34 Challenges in commercial scale-up of medium scale Outbreaks of diseases (like Blue Ear epidemics) Lack of knowledge on post treatment or bioslurry use Lack of knowledge and real live experience on co-digestion Limited access to affordable biogas appliances / generators Flaring is common instead of utilizing the biogas (which is also the case when biogas is produced from industrial waste water/streams) Limited access to financial resources to invest Medium segment is industrial scale but still family owned Several donors are now stepping into this segment in Vietnam among which ADB, UNEP and KfW 34
35 Challenges in commercial scale-up of medium scale >97% of Vietnam has access to the electricity grid frequent power cuts The consumer electricity tariff is regulated by the Electric Regulatory Authority of Vietnam (ERAV). EVN, in principle, cannot purchase electricity from independent power plants at rates higher than the consumer rates. Current average consumer rate: about 6 US cents/kwh. In comparison with other ASEAN countries (in 2010): Malaysia: Indonesia: Thailand: Philippines: Cambodia : 7.6 US$ cents/kwh 6.77 US$ cents/kwh 8.5 US$ cents/kwh US$ cents/kwh US$ cents/kwh Source: Giles Cooper, Duane Morris, June
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