Japan’s Erex plans biomass power plant in northern Vietnam

Japanese renewable energy firm Erex Co., Ltd. plans to build a biomass power plant in the northern highlands province of Lao Cai, a company executive said Friday.

Director Tomoki Kakuta, who oversees the company’s Vietnamese market operations, announced its new plan at a working session with provincial authorities.

He urged Lao Cai province and the central government to facilitate the company’s investment, noting that it plans to conduct a survey in September-October as the biomass energy potential in the province is currently unknown.

Lao Cai Chairman Trinh Xuan Truong responded that the province has to pursue biomass energy as wind and solar power development was not feasible and hydropower was the only other potential option.

He stressed the province’s strong economic potential, noting that it planned to become a gateway for trade activities between Vietnam, ASEAN countries and southwestern provinces of China.

Truong also said that Lao Cai consistently supported businesses with various measures including incentives related to land use fees, land rent and corporate income tax.

Lao Cai’s electricity generation reached 1,687 million kWh in the first seven months of this year, reaching just 33.75% of the year plan, the provincial Department of Industry and Trade reported.

It attributed the weak performance to unfavorable hot weather conditions early in the year, which negatively impacted the operation of hydropower plants. The weather conditions have improved since July with more rainfall, the department said.

In July, Erex and local partner Sakura Green Energy JSC broke ground for a VND474.8 billion ($19.99 million) biomass fuel plant in Yen Bai province, which neighbors Lao Cai. The companies said the plant was part of the 50th anniversary celebration of Vietnam-Japan relations. The three-hectare factory, named Erex Sakura Yen Bai, has a designed annual capacity of 150,000 tons of wood pellets and 305,000 tons of wood chip products a year.

Erex is researching three other projects in Yen Bai: a wood pellet factory; a biomass power plant; and another for collection of wood byproducts. These projects have a total estimated investment of $127 million, provincial authorities said.