Vietnam has introduced an incentive policy for the first time which will encourage private investors to build waste-generated power projects in Vietnam.
A range of new incentives will encourage waste-generated power projects
“The mechanism, effective from June 20 this year, will be one of the most important pillars to support renewable power projects generated from solid waste. It will help attract investors in this type of renewable energy,” said Nguyen Duc Cuong, head of the Ministry of Industry and Trade’s (MoIT) Institute of Energy.
The incentive feed-in-tariff for renewable power generated from solid waste-power plant will be 10.05 US cents per kilowatt hour. This is higher than the tariff of 7.8 US cents fixed for wind power plants.
MoIT’s Deputy Minister Le Duong Quang said that the waste-to-power model contributed to Vietnam’s environmental protection policy as well as its energy programme.
Le Anh Hung, chairman of Ecotech Vietnam, a technological and environmental solution provider, stated that investors in this sector were waiting for this mechanism to come online. He added that Ecotech Vietnam had a strong desire to contribute to the development of the waste-to-power sector as well as develop environmental protection and pollution treatment facilities here.
He said his company was currently consulting on the establishment of waste-to-power projects in Hanoi, Ho Chi Minh City and Ba Ria-Vung Tau with the estimated investment capital of $150 million for each project.
Although Vietnam is said to have huge potential for renewable energy, private investors have not yet invested much in this sector due to a lack of incentive mechanisms. Currently, the Vietnamese government is supporting small hydro-power projects, wind power projects and biomass power projects dating from 2008, 2011 and 2014 respectively.
In past years, several private investors proposed building renewable energy projects generated from solid waste, but most of them were not actually built due to a lack of support mechanisms. Australian-based Trisun International Development proposed a $400 million waste-to-power project, as did Vietnam Waste Solutions Company, however neither of these projects made it off the ground. The $30 million waste-to-power project in Hanoi, which is a joint venture of Japan’s Hitachi Zosen Company and Hanoi Urban Environment Company, is the only one being developed so far.
All investors have proposed a feed-in tariff of around 10 US cents per kilowatt hour. Trisun International Development even proposed a feed-in-tariff of 12 US cents per kilowatt hour.
Before the provision of support mechanisms for power generation projects using solid waste in Vietnam, Yoshioka Toru, director of Hitachi Zosen stated that the cost of investment in a waste-to-power plant was very high. He added that investors would hardly make a profit if they built renewable power plants in Vietnam due to the low retail price of electricity.
Its project is scheduled to go into operation in 2014 with the capacity to treat 75 tonnes or 30 per cent of Hanoi’s daily industrial waste. The plant will use advanced Japanese technology, and the subsequent energy produced will be harnessed to generate power for about 4,500 households and a neighbouring industrial park.
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