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Reports of CDM/JI Feasibility Studies: FY2004

Title of the researchFeasibility Study on a Wood Fired Power Plant, including Energy Forestation Planning for Sustainable Fuel Wood Supply, in Southern Vietnam
FYFY 2004
Main research organizationSojitz Research Institute, Ltd.
Research partner(s)People's Committee of Long An Province
Location of the projectSocialist Republic of Vietnam
Summary of the research report (PDF)200419.pdf(72kb)
Description of the projectThe Vietnamese government has encouraged Melaleuca reforestation in the Mekong Delta region of South Vietnam since Melaleuca can grow on acid soil. Melaleuca wood has been used as construction materials, but reinforced concrete has been depriving Melaleuca of market share and the market price of Melaleuca is declining recently.
At present Melaleuca is planted in abandoned land and no solution has been made in spite of intensive studies and researches by the government and farmers.
This is a feasibility study on the sustainable power generation project with Melaleuca as fuel. This project also pursues two CDM possibilities, the one is GHG emission reduction with alternative energy and the other is energy plantation as reforestation CDM project.
Sector of the projectBiomass Utilisation
Duration of the project activity/ crediting periodthe first crediting period: 7 years
(Renewable crediting period)
Baseline methodology/additionalityProject category
(1) The project produces renewable energy from biomass.
(2) The total generation capacity is 5.5 MW (below the 15MW)
→Small Scale CDM project
According to "Appendix B of the simplified modalities and procedures for small-scale CDM project activities", the project classified into;
"Type I -Renewable Energy Projects"
"Category I.D.-Renewable electricity generation for a grid"

[Investment barrier]
The project aims to benefit farmers planting Melaleuca wood, which is surplus to demand for construction materials and it is considered that the fuel cost of Melaleuca will be higher than fossil fuel.
In the absence of the project, from economical point of view, it is not considerable that other power projects utilises Melaleuca as main fuel.

[Technological barrier]
There is no experience to sell electricity generated from wood biomass anywhere in Vietnam and efficient thermal conversion technology has not been fully developed yet.

Project boundary
The physical delineation is defined as the plant site, with the exception of off-site transportation, which is included within the project boundary. Thus, the emission reduction of GHG in the baseline has to be offset with the emissions of transportation.

Baseline and its development
The baseline methodology given in Type I.D. of Appendix B is applied to the project. The baseline is the kWh produced by the renewable generating unit multiplied by an emission coefficient (measured in kg CO2equ/kWh), which is the average of the "approximate operating margin" and the "build margin" in this case.

For this project, an emission coefficient will be calculated with the weighted average emissions during 3 latest years of all generating sources serving the national grid system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation (Approximate Operating Margin), and the weighted average emissions coefficient of 5 most recent plants in Vietnam (Build Margin).
The emission coefficient of the baseline will be;
Estimation of GHG emissionsThe difference between the annual baseline emissions and the annual project activity emissions

The annual baseline emissions calculated with the emission coefficient above will be;
33,759,000 kg CO2 /year.

The project activity uses a little diesel oil, which is input to gas engine as combustion improver. Also the gasifier requires diesel oil for start-up. Therefore, the emission by the project activity should be calculated.
The annual project activity emissions will be;
543,221 kg CO2 /year.

Thus, the annual emission reduction due to the project activity will be 33,216tonnes, and the emission reduction during the crediting period (7 years) will be 232,521 tonnesCO2.
Monitoring methodologyThis methodology involves metering of the electricity generated by the renewable technology. It provides measured data on the amount of electricity generated, the biomass input and the fossil fuel input. With this data, a reliable estimate of the amount of emission reduction can be made.
Environmental impactProvisions are laid down for relaxing the requirements and simplifying the procedure on certain conditions for investment or development projects undertaken by foreign investors since Vietnam encourages foreign investment. This simplified procedure is applied to the project and EIA will end when the Registration for Securing Environmental Standards, a document applying for simplified review of environmental impact, is submitted to the relevant environmental administrative body for review at the same time when the investment license is applied for.
Issues and tasks for project implementationThe Vietnamese government does not have any incentives to renewable energy power produce projects, and theoretically the electric power selling price to the power company will not be much different from that of large scale fossil fuel power generation. Therefore it is necessary to minimize operating (variable) cost as well as plant cost, especially to reduce collecting cost of Melaleuca wood and to establish effective collecting system of Melaleuca.
We would like to improve the project plan in detail next year and expect to begin the project within 2 years.

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