part 1: overview of cogeneration and its status in asia - Fire

Summary of country study – Viet Nam
Reciprocating engine
Textile mill “A” R.E.(PM.) H.F.O. 800 + 26.4
Textile mill “B” R.E.(TM.) H.F.O. 800 + 20.1
R.E.(PM.) H.F.O. 800 + 27.7
Textile mill “C” R.E.(PM) H.F.O. 870 + 25.2
Paper mill “D” R.E.(TM.) H.F.O. 800 + 29.4
Paper mill “E” R.E.(PM) H.F.O. 870 + 40.5
Rubber factory “H” R.E.(TM.) H.F.O. 780 + 21.2
R.E.(PM.) H.F.O. 780 + 20.5
Hotel “F” R.E.(TM) D.O 1,540 + 29.6
R.E.(PM) D.O 1,540 + 27.5
(c): It is the percentage escalation when the IRR value reaches the hurdle rate (17 per cent)
(+ means the IRR always remains above the hurdle rate; and – means the IRR always
remains below the hurdle rate)
Changes in the income tax rate
The income tax is varied from 5 to 35 per cent to see its impact on the profitability of the
project, in terms of IRR. The results are given in Table 4.15.
Table 4.15 Impact of increase in income tax rate (5-35 per cent per year) on IRR
Steam turbine
Factory Alternative Fuel type Elect. Price % increase in
(VND/kWh) tax rate (d)
IRR %
Textile mill “A” S.T.(TM) H.F.O. 800 + 19.9
Textile mill “B” S.T.(TM) H.F.O. 800 25% 20.0
Textile mill “C” S.T.(TM) Coal 800 + 31.7
Paper mill “D” S.T.(TM) H.F.O. 800 23% 19.8
Paper mill “E” S.T.(TM) Coal 870 35% 37.1
S.T.(PM) Coal 870 + 34.9
S.T.(TM) H.F.O. 870 + 24.6
Rubber factory “H” S.T.(TM) Coal 780 + 30.9
Reciprocating engine
Textile mill “A” R.E.(PM.) H.F.O. 800 + 26.4
Textile mill “B” R.E.(TM.) H.F.O. 800 25.0 20.1
R.E.(PM.) H.F.O. 800 + 27.7
Textile mill “C” R.E.(PM) H.F.O. 870 + 25.2
Paper mill “D” R.E.(TM.) H.F.O. 800 + 29.4
Paper mill “E” R.E.(PM) H.F.O. 870 + 40.5
Rubber factory “H” R.E.(TM.) H.F.O. 780 + 21.2
R.E.(PM.) H.F.O. 780 15% 20.5
Hotel “F” R.E.(TM) D.O 1,540 + 29.6
R.E.(PM) D.O 1,540 + 27.5
(d): It is the percentage increase when the IRR value reaches the hurdle rate (17 per cent)
(+ means the IRR always remains above the hurdle rate; and – means the IRR always
remains below the hurdle rate)
In the case of steam turbine, an increased tax rate does not affect the IRR much. All coal
fired boiler options are attractive with the IRR being higher than the hurdle rate. The heavy
fuel oil fired boiler option is also attractive up to a tax rate of 23 to 25 per cent beyond which
the IRR falls below the hurdle rate. So far, there has not been any official document on
taxation of energy generated from unconventional plants. However, higher than 20 per cent
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