Commercial Development Opportunities for Small and Medium ... · through exploiting the market and non-market benefits of domestic biogas plants. Mason Training – Bac Ninh – May

Dagmar Zwebe

Sector Leader Renewable Energy Vietnam

June 2013

Commercial Development Opportunities for

Small and Medium Scale Biogas in Vietnam

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

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• 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.

Connection “leveraging critical mass”

Scalability “seeking a systems change”

Effectiveness “empowering local actors”

Market-Based Solutions to Eliminate Poverty

About SNV

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SNV Presence Worldwide

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What we do

3 sectors

Agriculture

Renewable Energy & REDD+

Water, Sanitation and Hygiene

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3 roles

Advisory services

Knowledge networking

Evidence Based Advocacy

4 key success factors

Inclusive development

Systemic change

Local ownership

Contextualised solutions

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 56 000 households

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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

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Animal Husbandry in Vietnam

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See also “Biomass Business Opportunities Viet Nam” Report Published in 2012 by Agency NL, written by SNV Vietnam

http://www.snvworld.org/en/vietnam/publications/biomass-business-opportunities-in-vietnam











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 2001-

2005, increasing to about 44% in 2008.

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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).

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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.

Mason Training – Bac Ninh – May 2011

A cooperation between

• The Ministry of Agriculture and Rural Development (MARD)

• SNV Netherlands Development Organisation

• DGIS – Dutch Ministry of Foreign affairs

BP for the Animal Husbandry Sector

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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

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Sector Development

Develop private sector

Quality Management

(Financial)

Incentives

Promotion, Marketing and

Sales

R&D

Extension

Capactiy Building and

Training

Access to (Micro) Finance

SNV’s approach for market development

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Training

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Finished plants

Most common appliances

• Cookstoves (household and pig feed cooking)

• Lamps

• Piglet heating

• Egg Hatching

• Live breading

• Boilers (for showering)

• Rice cooking

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-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2007 2008 2009 2010 2011 2012 2013*

BP QSEAP LIFSAP Not covered

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.

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130,000 biogas plants installed in 53 provinces

>600,000 beneficiaries

>1000 Biogas Enterprises developed

>5 tCO2 eq. reduced per plant per year

International recognition through

– Energy Globe Award 2006 – Ashden Award 2010

– World Energy Award 2012

BP Accomplishments

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• 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

Background & rationale

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“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:

SNV’s approach: Sector Development

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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

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Medium Scale Biogas Technology (cont’d)

300m3 digester at Mr Nghia’s farm in Nam Dinh close to

completion April 2012

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Medium Scale Biogas Technology (cont’d)

500m3 digester at Mr Chau’s farm in Quang Ninh close to

completion October 2012

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Case Study – Mr. Quang’s Farm, Bac Ninh

• 800 fattening pigs

• 200m3 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 kWh/mth @ $0.06/kWh = $475/mth

• Biogas production (calculated)

100m3 biogas/day – equivalent to 5,000 kWh/mth electricity (60%)

300 tonne CO2e avoided per year

• Actual biogas use: distributed and sold to neighbour

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Case Study (cont’d)

Open lagoon bubbling methane and over-flowing into irrigation canal

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February 2012

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April 2012

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July 2012

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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

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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

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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: 7.6 US$ cents/kWh

Indonesia: 6.77 US$ cents/kWh

Thailand: 8.5 US$ cents/kWh

Philippines: 17.52 US$ cents/kWh

Cambodia : 17.68 US$ cents/kWh

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Source: Giles Cooper, Duane Morris, June 2012

Documents

Commercial Development Opportunities for Small and Medium ... · through exploiting the market and non-market benefits of domestic biogas plants. Mason Training – Bac Ninh – May