SGC Energy, a South Korean renewables company, is to work with Vietnamese power engineering consultant PECC1 to convert coal power plants into biomass-burning facilities, Bioenergy Insight reports.

The partnership was formed after Vietnam decided to phase out coal power generation. This which currently accounts for 40% of the country’s installed capacity.

Last year, the country announced that it aimed to safeguard its rapidly growing economy by doubling installed capacity to 146GW by 2030 while reducing its dependence on coal.

Vietnamese coal plants have been the focus of international criticism in recent years, as have the Korean companies participating in new projects.

At present, about 25% of Vietnam’s electricity, or 19GW, is generated from renewable sources. The lion’s share of this is taken up by wind and solar. The aim is to increase that to 39GW over the next seven years.

Under the agreement, SGC will be in charge of the operation and management of the power plant. PECC1 will carry out feasibility studies, as well as procurement and construction.

SGC commented: “Because Vietnam has high-capacity and advanced power facilities, and a steadily growing power market, the nation is regarded as an emerging energy market.”

Vietnam has a large biomass potential, particularly in the form of wood pellets and residues from rice farming. The country is the second-largest exporter of wood pellets, after the US, with an annual export volume of more than 3.5 million tonnes, which earned around $400m in 2021.

PECC1 has conducted large-scale projects in Southeast Asia including Vietnam, Laos and Cambodia. The company is controlled by state generator Vietnam Electricity, which owns 54% of its shares.