IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v29y2004i7p1039-1051.html
   My bibliography  Save this article

Economic buy-back rates for electricity from cogeneration: Case of sugar industry in Vietnam

Author

Listed:
  • Bhattacharyya, Subhes C
  • Quoc Thang, Dang Ngoc

Abstract

Cogeneration of heat and power could be an attractive option for meeting electricity demand in Vietnam, which is facing acute shortage in generation capacity due to high demand growth spurred by rapid economic growth of the country. The sugar industry has significant potential for cogeneration. This paper focuses on the cogeneration potential of the sugar industry and estimates, based on avoided cost, the economic rate at which excess power could be sold to the utility. We found that cogeneration would be a financially viable option for medium and large size sugar plants. Time-of-day rates would be the most suitable form of buy-back rate and the IRR ranges between 12% and 15% in this case. The sensitivity analysis indicates that cogeneration plants would be vulnerable to changes in buy-back rates and investment costs. The internal rate of return is more sensitive to changes in buy-back rates than those in investment costs. Medium and large sized plants would be in a better position to withstand such changes in the business environment.

Suggested Citation

  • Bhattacharyya, Subhes C & Quoc Thang, Dang Ngoc, 2004. "Economic buy-back rates for electricity from cogeneration: Case of sugar industry in Vietnam," Energy, Elsevier, vol. 29(7), pages 1039-1051.
    • Handle: RePEc:eee:energy:v:29:y:2004:i:7:p:1039-1051
    DOI: 10.1016/j.energy.2003.04.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544204000155
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2003.04.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chi-Keung Woo, 1988. "Inefficiency of Avoided Cost Pricing of Cogenerated Power," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 103-113.
    2. Kenneth Rose & John F. McDonald, 1991. "Economics of Electricity Self-Generation by Industrial Firms," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 47-66.
    3. Lesser, Jonathan A & Feinstein, Charles D, 1999. "Electric Utility Restructuring, Regulation of Distribution Utilities, and the Fallacy of "Avoided Cost" Rules," Journal of Regulatory Economics, Springer, vol. 15(1), pages 93-110, January.
    4. Kliman, Mel, 1994. "Competitive bidding for independent power: Developments in the USA," Energy Policy, Elsevier, vol. 22(1), pages 41-56, January.
    5. Bernow, Stephen & Biewald, Bruce & Marron, Donald, 1990. "Avoided cost contracts can undermine least-cost planning," Energy Policy, Elsevier, vol. 18(7), pages 624-630, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Compernolle, Tine & Witters, Nele & Van Passel, Steven & Thewys, Theo, 2011. "Analyzing a self-managed CHP system for greenhouse cultivation as a profitable way to reduce CO2-emissions," Energy, Elsevier, vol. 36(4), pages 1940-1947.
    2. Xiaolong Yang & Yan Li & Dongxiao Niu & Lijie Sun, 2019. "Research on the Economic Benefit Evaluation of Combined Heat and Power (CHP) Technical Renovation Projects Based on the Improved Factor Analysis and Incremental Method in China," Sustainability, MDPI, vol. 11(19), pages 1-23, September.
    3. Arshad, Muhammad & Ahmed, Sibtain, 2016. "Cogeneration through bagasse: A renewable strategy to meet the future energy needs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 732-737.
    4. Lizarraga-Garcia, Enrique & Ghobeity, Amin & Totten, Mark & Mitsos, Alexander, 2013. "Optimal operation of a solar-thermal power plant with energy storage and electricity buy-back from grid," Energy, Elsevier, vol. 51(C), pages 61-70.
    5. Badami, M. & Camillieri, F. & Portoraro, A. & Vigliani, E., 2014. "Energetic and economic assessment of cogeneration plants: A comparative design and experimental condition study," Energy, Elsevier, vol. 71(C), pages 255-262.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wickart, Marcel & Madlener, Reinhard, 2007. "Optimal technology choice and investment timing: A stochastic model of industrial cogeneration vs. heat-only production," Energy Economics, Elsevier, vol. 29(4), pages 934-952, July.
    2. Zarnikau, Jay & Reilley, Bob, 1996. "The evolution of the cogeneration market in Texas," Energy Policy, Elsevier, vol. 24(1), pages 67-79, January.
    3. Westner, Günther & Madlener, Reinhard, 2011. "Development of cogeneration in Germany: A mean-variance portfolio analysis of individual technology’s prospects in view of the new regulatory framework," Energy, Elsevier, vol. 36(8), pages 5301-5313.
    4. Schwob, Marcelo Rousseau Valença & Henriques Jr., Maurício & Szklo, Alexandre, 2009. "Technical potential for developing natural gas use in the Brazilian red ceramic industry," Applied Energy, Elsevier, vol. 86(9), pages 1524-1531, September.
    5. Ghosh, Ranjan & Kathuria, Vinish, 2014. "The transaction costs driving captive power generation: Evidence from India," Energy Policy, Elsevier, vol. 75(C), pages 179-188.
    6. Jae-Cheol Kim & Byong-Hun Ahn, 1990. "On the Economics of Cogeneration: Pricing and Efficiency in Government Owned Utilities," The Energy Journal, , vol. 11(1), pages 87-100, January.
    7. Mary Jialin Li, 2016. "Cogeneration Technology Adoption in the U.S," Working Papers 16-30, Center for Economic Studies, U.S. Census Bureau.
    8. Dismukes, David E. & Kleit, Andrew N., 1999. "Cogeneration and electric power industry restructuring," Resource and Energy Economics, Elsevier, vol. 21(2), pages 153-166, May.
    9. Bonilla, David, 2007. "Fuel Price Changes and the Adoption of Cogeneration in the U.K. and Netherlands," The Electricity Journal, Elsevier, vol. 20(7), pages 59-71.
    10. Reinhard Madlener & Marcel Wickart, 2003. "The Economics of Adoption of Industrial Cogeneration: A Deterministic Model in Continuous Time," CEPE Working paper series 03-27, CEPE Center for Energy Policy and Economics, ETH Zurich.
    11. Seeto, Dewey & Woo, C. K. & Horowitz, Ira, 1997. "Time-of-use rates vs. Hopkinson tariffs redux: An analysis of the choice of rate structures in a regulated electricity distribution company," Energy Economics, Elsevier, vol. 19(2), pages 169-185, May.
    12. Strachan, Neil & Dowlatabadi, Hadi, 2002. "Distributed generation and distribution utilities," Energy Policy, Elsevier, vol. 30(8), pages 649-661, June.
    13. Woo, Chi-Keung & Olson, Arne & Horowitz, Ira & Luk, Stephen, 2006. "Bi-directional causality in California's electricity and natural-gas markets," Energy Policy, Elsevier, vol. 34(15), pages 2060-2070, October.
    14. Soares, J. B. & Szklo, A. S. & Tolmasquim, M. T., 2001. "Incentive policies for natural gas-fired cogeneration in Brazil's industrial sector -- case studies: chemical plant and pulp mill," Energy Policy, Elsevier, vol. 29(3), pages 205-215, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:29:y:2004:i:7:p:1039-1051. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.