Country Presentation on status of Bioenergy development in Lao PDR

international workshop on bioenergy in

the ASEAN region

23-24 July 2014

Plaza Athenee Bangkok, Thailand

Overview of Bioenergy

Lao PDR is an agricultural based country. There are a lots of wastes generated every year from agro-forestry production,

Municipal wastes/organic industrial wastes are among the important biomass energy resources.

High potential of energy crops, which can be used as feedstock for biofuels production.

Energy use in the country is mainly in the form of traditional fuels, i.e. the use of biomass such as wood and charcoal for cooking and heating in rural areas

Energy situation in the country

Data collection • What is the legal basis and procedure

to collect energy/agricultural data?

• Who uses the data and how?

• What are the main issues?

Fuel Wood

56.00%

Fuel Oil

17%

Electricity

12.00%

Charcoal

12.00%

Coal

3.00%

• Primary Energy Consumption in Lao PDR

Agriiculture

2%

Commercial

1%

Residential

51% Transport

26%

Industrial

20%

• Energy Consumption by Sector

Electricity Situation in the country

320 GWh

822 GWh

10,043 GWh

1,576 GWh

IPP (Dom)

IPP (Exp)

EDL (Dom)

EDL (Exp)

Electricity Generation in Lao PDR

1,160.0 GWh

799.71 GWh

8.838 GWh

173.93 GWh

39.45 GWh

10.42 GWh

882.62 GWh

ທ ີ່ ຢ ີ່ ອາໄສ Residential

ທຸລະກິດ Commercial

ທ/ກ ບັນເທ ງ Entertainment

ສ/ງ ລັດ Gov.offices

ກະສິ ກໍາ Agriculture

ອ/ກ ສາກົນ Embassies

ອຸດສາຫະກໍາ Industry

Electricity Consumption in Lao PDR

Agriculture situation in the country

Main food crops produced

- Rice, corn, Cassava, sugarcane, Job tears…..

Main export staples

- Rice, Corn…

Crop residues/waste produced

- Rice husk, Corn crops, sugarcane crops /Animal Waste

Agriculture strategy

What are the main issues? (land, water, production,

- storage, export, policy,

Wind

73 MW

SHP

400 MW

For Electricity

Biomass Biogas Waste

58 MW 51 MW 36 MW

Biofuels (ML)

Ethanol 97.64

Biodiesel 194.44

Financial

Incentive for

Investors

Renewable Energy Strategy Development (2011-2025)

Develop and Modify Legal

documents (laws, regulations and guidelines)

Target: increase RE use to 30 % of national demand by 2025 (bio-fuel production to account 10 %)

Objective: Ensure energy security, sustain socio-economic development, and enhance environmental and social sustainability

Bio-Energy

• Establish Renewable Energy Fund

• Financial Mechanism:

- Import duty free on production machinery, equipment and raw materials

- Import duty free on chemical materials necessary for biofuels production within 7 years

- Profit tax is divided in to 3 categories: 20%, 15% and 10%. Profit tax exemption is possible for a certain period depending

on activities, investment areas and size investment

• Subsidies on unit product price depending on energy type and times period

Support

Mechanism

Heat

Biomass Biogas

113 ktoe 178 ktoe

Solar

106 MW

Policy and Strategy for Renewable Energy

CURRENT STATUS OF BIOMASS DEVELOPMENT

Hoang Anh Sugar Mill

Phouvong, district

Attapeu Province

Install Capacity: 30 MW

Feedstock: Bagasse

Mit Lao Sugar Mill

Xaibury, district

Savannakhet Province

Install Capacity: 9.7 MW

Feedstock: Bagasse

Energy Self Sufficiency Village

Pangbong Village

Ngeun District

Xayabury Province

Install Capacity:40 kW

Feedstock: Corn crops 39.74

13

24

58

0

10

20

30

40

50

60

70

2013-2015 2020 2025

Existing (MW)

Target (MW)

CURRENT STATUS OF BIOGAS DEVELOPMENT

TBEC (Lao) Sole Co. Ltd Waste water treatment

from Cassava and produce

biogas 7 million m3/y Production of biogas 90

Million (Nm3) or million

normal cubic meters

(Nm3), approximately at

175 million liters, of heavy

fuel oil (HFO)

reducing as much as

300,000 tones of

greenhouse gas per year

and 60,000 tones of CO2

on an annual basis.

Beer Brewery

Waste water treatment

from beer production and

generate the gas about

1,500 m3/day Reduce CO2 about

3,338 ton/y

5,003 2,850

25,000

50,000

0

10,000

20,000

30,000

40,000

50,000

60,000

2013-2015 2020 2025

Existing Household with biogas

Target houusehold for biogas utilization

10

19

51

0

10

20

30

40

50

60

2015 2020 2025

(MW)

Target

BPP 5,003 HHs (2012)/DFL (MAF)

Biogas for Electricity Generation

Data

U.D. Farm; Mai Village, Phonetong District, Vientiane Province.

Amount of waste 270 cu.m./day

Biogas production 2,090 cu.m./day

Engine and Gen-set capacity 260 kW

Total Project investment cost $357,345

Potential profit per year $80,428

Energy Production 2,927 kWh/day

Operating hours 11.2 Hrs/day

Payback period(No loan and no subsidy) 4.5 years

Status: Under construction will be finished in Feb. 2015

Family scale of Biogas

Lao-Neth Model

4 m3

6 m3

8 m3

10 m3

Biogas Concept

Biogas system converts existing wastes into clean and valuable household products.

Generates clean Biogas energy

Makes organic fertilizer

Clean, easy, modern

cooking and lighting

With Biogas System

Treats Waste

Healthy house and clean area

Statistic for Family scale of Biogas Installation

Year 2007 2008 2009 2010 2011 2012 Total

Number of Biogas 110 188 650 1000 1330 1725 5003

Number of Provinces

1 3 3 5 6 6

Number of Districts

4 15 21 29 41 45

CHALLENGES ON RENEWABLE ENERGY DEVELOPMENT Awareness barriers among policy makers, consumers, suppliers etc

Lack of knowledge concerning opportunities, reliability and lifetime of technologies;

Lack of knowledge concerning impacts on environment from renewable energy production;

Lack of information on resources available and sustainability, in particular with regard to biomass

Financial challenges:

The high investment cost and scare resources support

Renewable energy is hardly variable economically unattractive to provide investor

Lack of financial institutional support and absence of appropriate financing

Administrative challenge:

Long processing/take many paper work for tax exemption

Lack of coordination among government agencies and the private sector which hampers renewable

energy development and promotion in Lao PDR

Socio-cultural challenge

Lack of renewable energy specialist among the decision makers meaning that policy makers are not

be fully aware of characteristics and benefits of renewable energy

No local production

Limited public awareness of renewable energy advantage in daily life

Technical challenge

Some of renewable energy has low energy generation compare to other energy

Need large area

Lack of local standards for renewable energy equipment and systems as renewable energy

technologies are relatively new to the market Environmental and social impacts

Lack of effective measures to prevent the adverse social and environmental impacts of large scale

hydropower projects

Improvement of Data collection in provincial level

Master plan and action plan for Bioenergy

Subsidies on unit product price (adder or FIT)

Carry out resource assessment to estimate potential

Business Model

TA

Thank you