The Cogeneration Potential of the Sugar Industry in Vietnam

Abstract

Vietnam produces about 15 million tons (mt) of sugarcane per year and about 5 mt of bagasse. There is the potential for cogeneration using bagasse, which can also help overcome power shortages in the country. This paper analyses the potential for cogeneration from the sugar industry in Vietnam under three different scenarios and finds that between 100 to 300 megawatts of power-generating capacity could be supported by the bagasse generated from sugar mills, depending on the technology considered for sugar mills and cogeneration and the possibility of renovation of the existing mills. The paper also assesses the expense of cogeneration and finds it to be a cost effective option for all types of sugar mills. It is found that the cost savings from cogeneration would more than offset the cost of introducing cogeneration in sugar mills with inefficient cane processing technologies. Sugar mills with modern technologies would have a significant amount of excess power and most of these plants would break-even if they sell excess power at around 4.5 cents/kWh. The break-even cost and the average production cost are sensitive to the investment cost assumptions. The paper thus suggests that cogeneration from sugar industry is an attractive option for the investors for existing mills or new sugar mills alike.