PTT Group and the Electricity Generating Authority of Thailand (Egat), both major national energy units, yesterday affirmed plans for Bt1.8 trillion of investment from 2010-2014 in order to ensure energy security.
However, they urged the government to better communicate with local communities if it wanted to see the investments proceed smoothly.
At the "Energy Solves Thailand's Crisis" seminar hosted by the Energy Ministry, PTT president and CEO Prasert Bunsumpun said his company's investment would further strengthen the country's energy security.
For absolute security, he said, PTT needed to be a world-class player with a large business size, integrated value chain, strong competitiveness and strength in good governance.
He added that since its privatisation in 2001, PTT had raced ahead in terms of its development.
"Yet, as a national energy company, PTT still needs support from the government and the general public. Otherwise, PTT would have difficulties in competing against others. Based on the earnings ratio on sale or assets, PTT is relatively small compared to competitors like ExxonMobil or Malaysia's Petronas," he said.
While PTT Exploration and Production (PTTEP) will invest Bt480 billion in the period, PTT and other subsidiaries will invest a combined Bt1 trillion - and Egat another Bt300 billion.
Prasert lamented the government's policy that required PTT to shoulder oil price subsidies worth about Bt40 billion last year. Meanwhile, PTT had to subsidise the price of liquefied petroleum gas to the tune of about Bt5 billion, which only weakened the company.
"In 2008, PTT's net profit totalled US$1.6 billion [Bt53.7 billion] and some social groups said this was too high. Yet, compared to $15 billion at Petronas or $45 billion at ExxonMobil, the profit is small. Meanwhile, PTT is responsible for seeking new energy supplies. Without profits, good governance and government support, how can PTT mobilise funds to finance the expansion?" he said.
PTTEP chief executive officer Anon Sirisaengtaksin echoed Prasert's point, saying that government support was necessary or projects could be disrupted due to high risks.
PTTEP's investment plan is aimed at ensuring sufficient supply, as Thailand's oil consumption will rise from 1.7 million barrels per day to 2.7 million in the next 10 years.
The company now supplies 260,000 barrels a day and is in the process of raising this to 400,000. It is involved in 40 exploration and production projects in 13 countries, with 20 of them under exploration.
Egat governor Sombat Sarntijaree said his agency's investment would depend on the national power development plan, which is being revised.
He said it was necessary for Thailand to diversify fuels for power generation and for the government to further educate the public on nuclear power.
Jiraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said that at present, local communities and non-government agencies were opposed to fuels like biomass, coal and nuclear.
He said the situation would pose threats to national energy security, and the government would therefore do its best to communicate with the public - or no investors would dare to commit to energy projects.
Wednesday, October 28, 2009
Tuesday, October 20, 2009
EGAT, FIRMS INVITED TO MUMBAI
The Electricity Generating Authority of Thailand (Egat) and local energy companies have been asked to join an exhibition in Mumbai, were they can also explore investment opportunities in India.
Raj Eswaran, organising chairman of Elecrama 2010, said all of the exhibitors already signed on were ready of joint ventures and product transactions. The Thai organisations have shown their strength in power transmission and distribution through expansion into neighbouring countries.
"We're also looking for opportunities to hold an exhibition here, to respond to Asean's power-transmission and-distribution needs," he told a press conference in Bangkok yesterday.
The invitation follows the potential expansion of investment and trade between Thailand and India in the wake of free-trade pacts between the countries and between the subcontinent and Asean, Eswaran said.
This would boost bilateral trade from US$6 billion (Bt200 billion) now to $10 billion next year, while Indian-Asean trade woul dincreasde from $48 billion to $60 billion.
He said the event would allow Thai operators to find opportunities for power investment in India.
The Indian economy is expected to grow 8 per cent this year in the face of the global slowdown. Trade and investment in India are expected to triple from $200 billion, and power demand will increase accordingly, offering a huge investment potential for interntional investors, he added.
Organised by the Indian Electricial and Electronics Manufacturers Association, the world-class Elecrama is held every two year. Prior to the ninth event, set for next January 20-24, the exhibition has generated more than $900 million worth of joint ventures, orders, strategic investment, supply contracts, brand sales and other trade opportunities.
Next year's event will feature 1,000 exhibitors from 20 countries, including Germany, Spain, China and South Korea. More than 50,000 visitors from 40 countries, including Thailand, are expected.
The invitation follows the potential expansion of investment and trade in thei wake of FTAs between the two nations.
Raj Eswaran, organising chairman of Elecrama 2010, said all of the exhibitors already signed on were ready of joint ventures and product transactions. The Thai organisations have shown their strength in power transmission and distribution through expansion into neighbouring countries.
"We're also looking for opportunities to hold an exhibition here, to respond to Asean's power-transmission and-distribution needs," he told a press conference in Bangkok yesterday.
The invitation follows the potential expansion of investment and trade between Thailand and India in the wake of free-trade pacts between the countries and between the subcontinent and Asean, Eswaran said.
This would boost bilateral trade from US$6 billion (Bt200 billion) now to $10 billion next year, while Indian-Asean trade woul dincreasde from $48 billion to $60 billion.
He said the event would allow Thai operators to find opportunities for power investment in India.
The Indian economy is expected to grow 8 per cent this year in the face of the global slowdown. Trade and investment in India are expected to triple from $200 billion, and power demand will increase accordingly, offering a huge investment potential for interntional investors, he added.
Organised by the Indian Electricial and Electronics Manufacturers Association, the world-class Elecrama is held every two year. Prior to the ninth event, set for next January 20-24, the exhibition has generated more than $900 million worth of joint ventures, orders, strategic investment, supply contracts, brand sales and other trade opportunities.
Next year's event will feature 1,000 exhibitors from 20 countries, including Germany, Spain, China and South Korea. More than 50,000 visitors from 40 countries, including Thailand, are expected.
The invitation follows the potential expansion of investment and trade in thei wake of FTAs between the two nations.
Wednesday, October 14, 2009
Ministry takes a close look at wind power
The feasibility of wind power will be studied by an Energy Ministry department as part of plans to reduce Thailand's dependence on imported energy, a senior officials says.
The Thai Meteorological Department conducted the last study on wind power a decade ago and found that only limited areas in Thailand could make use of wind power to generate electricity due to the technology's low level of development at the time, said Krairit Nilkuha,director-general of the Energy Ministry's Department of Alternative Energy Development and Efficiency (DEDE).
The state agency now needs a new study to help encourage private investment in wind-power as the DEDE plans to auction concessions, under an independent power producer model, for the technology.
"Most of Thailand's highland areas are the property of state agencies," he said."So, any projects developed on such land will have to be operated as concessions."
Silpakorn University has been assigned to conduct the feasibility study which is scheduled to be completed within the first quarter of next year.
"The old data only found potential sites [for wind power turbines] in the lowlands and near to the coast," he said."However, with new technology, even highland areas that are 800 to 900 metres above sea level, such as mountains and cliffs, can be used to develop projects.We need a new study to confirm the possibility."
Many of the old wind-power projects failed commercially. Some were only able to operate for a few days every month due to low wind speeds, Mr Krairit said.
Under Thailand's renewable power development plan for 2007 to 2022, windpower would be developed to produce 115 megawatts of electricity per year within 2011, rising to 375 MW in 2016 and 800 MW in 2022.
The DEDE will also conduct a feasibility study on solar power in Thailand to reflect recent developments in solar cell technology.
"Both solar and wind-power should be promoted and developed, either the public or private sector should be gathered to help speed up our progress on renewable energy," he said."We depend too much on imported energy."
Thailand's current wind-power capacity is just one megawatt per year,according to DEDE, but this is expected to increase to more than 10 MW within 2011 with Ratchaburi Generating Holding Plc's development of new projects in Nakhon Ratchasima and Phetchabun.
The Thai Meteorological Department conducted the last study on wind power a decade ago and found that only limited areas in Thailand could make use of wind power to generate electricity due to the technology's low level of development at the time, said Krairit Nilkuha,director-general of the Energy Ministry's Department of Alternative Energy Development and Efficiency (DEDE).
The state agency now needs a new study to help encourage private investment in wind-power as the DEDE plans to auction concessions, under an independent power producer model, for the technology.
"Most of Thailand's highland areas are the property of state agencies," he said."So, any projects developed on such land will have to be operated as concessions."
Silpakorn University has been assigned to conduct the feasibility study which is scheduled to be completed within the first quarter of next year.
"The old data only found potential sites [for wind power turbines] in the lowlands and near to the coast," he said."However, with new technology, even highland areas that are 800 to 900 metres above sea level, such as mountains and cliffs, can be used to develop projects.We need a new study to confirm the possibility."
Many of the old wind-power projects failed commercially. Some were only able to operate for a few days every month due to low wind speeds, Mr Krairit said.
Under Thailand's renewable power development plan for 2007 to 2022, windpower would be developed to produce 115 megawatts of electricity per year within 2011, rising to 375 MW in 2016 and 800 MW in 2022.
The DEDE will also conduct a feasibility study on solar power in Thailand to reflect recent developments in solar cell technology.
"Both solar and wind-power should be promoted and developed, either the public or private sector should be gathered to help speed up our progress on renewable energy," he said."We depend too much on imported energy."
Thailand's current wind-power capacity is just one megawatt per year,according to DEDE, but this is expected to increase to more than 10 MW within 2011 with Ratchaburi Generating Holding Plc's development of new projects in Nakhon Ratchasima and Phetchabun.
Tuesday, October 13, 2009
Glow upbeat on Map Ta Phut despite court ruling
Glow Energy Plc's three ongoing power plant projects worth 60 billion baht in Map Ta Phut remain on track despite concerns that a court ruling may force their clients to suspend operations.
The SET-listed power producer, however, said its local and foreign creditors have started asking how its projects'future prospects could be dampened by stricter environmental regulations.
Glow, which is majority-owned by France-based GDF Suez Energy International, targets to secure as many bank loans as possible to finance the 60-billionbaht expenditure required for its three power projects,including a115-megawatt coal-fired power plant set to be operational in December this year.
"Investors and creditors are concerned about the uncertainties over the Thai regulations that additional requirements might be introduced in the near future,"Suthivong Kongsiri, executive vicepresident and chief financial officer of Glow told the Bangkok Post ."Those criteria might put our (power)business in a tougher situation than before."
Major clients of Glow are subsidiaries of Siam Cement Group (SCG), US-based Dow Chemical, and Vinythai Plc. SCG's 20 ongoing projects worth 106 billion baht are among 76 projects totalling 400 billion baht that were forced to suspend construction by a Sept 29 Administrative Court ruling.
"We updated with customers last week and found that nothing has changed.Construction of those projects have continued," Mr Suthivong said, noting that the 115-megawatt (MW) power plant is projected to lift Glow's net profit by 500 million baht in 2010 from this year's target of 4 billion.
"If their projects cannot proceed, we might have to look into the viability of our coming projects," he said.
Glow's 382-MW gas-turbine power plant, which is scheduled to be come online in Sept 2011, is another project that could be affected by the Map Ta Phut ruling. The company is also developing a 660-MW coal-fired power plant with operations due to start in Dec 2011 under an independent power producer license with the Electricity Generating Authority of Thailand.
Finansia Syrus Securities said in the worst-case scenario Glow may have to delay its 115-MW project for a year which could lower the power producer's earnings next year by 17% from an estimated 5.1 billion baht.
The brokerage forecasts Glow to post a net profit of 3.59 billion baht this year on revenue of 32.4 billion. Next year's turnover is projected at about 40.2 billion baht.
"But that scenario has minimal chance to happen, therefore, we have maintained our annual earning growth for Glow at 31% on average during 2010 to 2012,"FSS said in a recent report.
Shares of Glow closed yesterday on the Stock Exchange of Thailand at 33.25 baht, down 50 satang, in trade worth 25.79 million baht.
The SET-listed power producer, however, said its local and foreign creditors have started asking how its projects'future prospects could be dampened by stricter environmental regulations.
Glow, which is majority-owned by France-based GDF Suez Energy International, targets to secure as many bank loans as possible to finance the 60-billionbaht expenditure required for its three power projects,including a115-megawatt coal-fired power plant set to be operational in December this year.
"Investors and creditors are concerned about the uncertainties over the Thai regulations that additional requirements might be introduced in the near future,"Suthivong Kongsiri, executive vicepresident and chief financial officer of Glow told the Bangkok Post ."Those criteria might put our (power)business in a tougher situation than before."
Major clients of Glow are subsidiaries of Siam Cement Group (SCG), US-based Dow Chemical, and Vinythai Plc. SCG's 20 ongoing projects worth 106 billion baht are among 76 projects totalling 400 billion baht that were forced to suspend construction by a Sept 29 Administrative Court ruling.
"We updated with customers last week and found that nothing has changed.Construction of those projects have continued," Mr Suthivong said, noting that the 115-megawatt (MW) power plant is projected to lift Glow's net profit by 500 million baht in 2010 from this year's target of 4 billion.
"If their projects cannot proceed, we might have to look into the viability of our coming projects," he said.
Glow's 382-MW gas-turbine power plant, which is scheduled to be come online in Sept 2011, is another project that could be affected by the Map Ta Phut ruling. The company is also developing a 660-MW coal-fired power plant with operations due to start in Dec 2011 under an independent power producer license with the Electricity Generating Authority of Thailand.
Finansia Syrus Securities said in the worst-case scenario Glow may have to delay its 115-MW project for a year which could lower the power producer's earnings next year by 17% from an estimated 5.1 billion baht.
The brokerage forecasts Glow to post a net profit of 3.59 billion baht this year on revenue of 32.4 billion. Next year's turnover is projected at about 40.2 billion baht.
"But that scenario has minimal chance to happen, therefore, we have maintained our annual earning growth for Glow at 31% on average during 2010 to 2012,"FSS said in a recent report.
Shares of Glow closed yesterday on the Stock Exchange of Thailand at 33.25 baht, down 50 satang, in trade worth 25.79 million baht.
Wednesday, October 7, 2009
Egat unit shifts to services
With power demand falling, Egat International Co, an overseas investment arm of the Electricity Generating Authority of Thailand, is shifting its focus to operating and maintenance services for power plant operators.
The international business subsidiary,established in 2007, oversees all of Egat's investments outside Thailand, said Sutat Patmasiriwat, a deputy governor of the state power utility.
But plummeting power demand has made Egat International postpone two overseas projects - the 440-megawatt Nam Ngiep hydropower plant in Laos and the Hutgyi hydropower plant in Burma - neither of which have started construction.
Egat holds both plants' operating licences from their governments.
To develop its new business focus,Egat International is in talks with the US-based GE Group on conducting a feasibility study into providing operating and maintenance services to privately run power plants.
Egat is not only looking at the domestic market but has hopes of opportunities across Indochina. The company may also hold discussions with Siemens AG on doing business together. It is also planning to diversify into coal mines,but Mr Sutat declined to give details.
In June, Egat invested in Egat Diamond Service, a new joint venture in which Egat and the Mitsubishi Group each hold 45% and Ratchaburi Power Generating Holding Plc 10% of the registered capital of 623 million baht.
It aims to provide gas-turbine generator part repairs, targeting overseas gasfired power plants, starting from 2011.
The international business subsidiary,established in 2007, oversees all of Egat's investments outside Thailand, said Sutat Patmasiriwat, a deputy governor of the state power utility.
But plummeting power demand has made Egat International postpone two overseas projects - the 440-megawatt Nam Ngiep hydropower plant in Laos and the Hutgyi hydropower plant in Burma - neither of which have started construction.
Egat holds both plants' operating licences from their governments.
To develop its new business focus,Egat International is in talks with the US-based GE Group on conducting a feasibility study into providing operating and maintenance services to privately run power plants.
Egat is not only looking at the domestic market but has hopes of opportunities across Indochina. The company may also hold discussions with Siemens AG on doing business together. It is also planning to diversify into coal mines,but Mr Sutat declined to give details.
In June, Egat invested in Egat Diamond Service, a new joint venture in which Egat and the Mitsubishi Group each hold 45% and Ratchaburi Power Generating Holding Plc 10% of the registered capital of 623 million baht.
It aims to provide gas-turbine generator part repairs, targeting overseas gasfired power plants, starting from 2011.
Friday, October 2, 2009
Wind farms may pay off
Investment in wind power generation could pay off for Thais, says the Senate's committee on energy.
Senator Lertrat Ratanawanich,who chairs the committee, said many investors had shown an interest in developing this alternative form of energy.
The government could help with research and development of technologies to make the most of wind power, he said.
However, legal barriers facing plans to build wind farms in forest areas were holding back development of the sector.
Proposals to develop wind energy generation by the government and the Electricity Generating Authority of Thailand have been submitted for approval.
The wind farms, if built here,could produce 1,000 megawatts of energy.
Once wind energy generation facilities are fully developed, the total output could reach that of a typical nuclear power plant, or 2,000 to 3,000 megawatts of electricity.
Senator Lertrat Ratanawanich,who chairs the committee, said many investors had shown an interest in developing this alternative form of energy.
The government could help with research and development of technologies to make the most of wind power, he said.
However, legal barriers facing plans to build wind farms in forest areas were holding back development of the sector.
Proposals to develop wind energy generation by the government and the Electricity Generating Authority of Thailand have been submitted for approval.
The wind farms, if built here,could produce 1,000 megawatts of energy.
Once wind energy generation facilities are fully developed, the total output could reach that of a typical nuclear power plant, or 2,000 to 3,000 megawatts of electricity.
PTT, EGAT PLAN TO INVEST BT1.8 TRILLION
PTT Group and the Electricity Generating Authority of Thailand (Egat), both major national energy units, yesterday affirmed plans for Bt1.8 trillion of investment from 2010-2014 in order to ensure energy security.
However, they urged the government to better communicate with local communities if it wanted to see the investments proceed smoothly.
At the "Energy Solves Thailand's Crisis" seminar hosted by the Energy Ministry, PTT president and CEO Prasert Bunsumpun said his company's investment would further strengthen the country's energy security.
For absolute security, he said, PTT needed to be a world-class player with a large business size, integrated value chain, strong competitiveness and strength in good governance.
He added that since its privatisation in 2001, PTT had raced ahead in terms of its development.
"Yet, as a national energy company, PTT still needs support from the government and the general public. Otherwise, PTT would have difficulties in competing against others. Based on the earnings ratio on sale or assets, PTT is relatively small compared to competitors like ExxonMobil or Malaysia's Petronas," he said.
While PTT Exploration and Production (PTTEP) will invest Bt480 billion in the period, PTT and other subsidiaries will invest a combined Bt1 trillion - and Egat another Bt300 billion.
Prasert lamented the government's policy that required PTT to shoulder oil price subsidies worth about Bt40 billion last year. Meanwhile, PTT had to subsidise the price of liquefied petroleum gas to the tune of about Bt5 billion, which only weakened the company.
"In 2008, PTT's net profit totalled US$1.6 billion [Bt53.7 billion] and some social groups said this was too high. Yet, compared to $15 billion at Petronas or $45 billion at ExxonMobil, the profit is small. Meanwhile, PTT is responsible for seeking new energy supplies. Without profits, good governance and government support, how can PTT mobilise funds to finance the expansion?" he said.
PTTEP chief executive officer Anon Sirisaengtaksin echoed Prasert's point, saying that government support was necessary or projects could be disrupted due to high risks.
PTTEP's investment plan is aimed at ensuring sufficient supply, as Thailand's oil consumption will rise from 1.7 million barrels per day to 2.7 million in the next 10 years.
The company now supplies 260,000 barrels a day and is in the process of raising this to 400,000. It is involved in 40 exploration and production projects in 13 countries, with 20 of them under exploration.
Egat governor Sombat Sarntijaree said his agency's investment would depend on the national power development plan, which is being revised.
He said it was necessary for Thailand to diversify fuels for power generation and for the government to further educate the public on nuclear power.
Jiraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said that at present, local communities and non-government agencies were opposed to fuels like biomass, coal and nuclear.
He said the situation would pose threats to national energy security, and the government would therefore do its best to communicate with the public - or no investors would dare to commit to energy projects.
However, they urged the government to better communicate with local communities if it wanted to see the investments proceed smoothly.
At the "Energy Solves Thailand's Crisis" seminar hosted by the Energy Ministry, PTT president and CEO Prasert Bunsumpun said his company's investment would further strengthen the country's energy security.
For absolute security, he said, PTT needed to be a world-class player with a large business size, integrated value chain, strong competitiveness and strength in good governance.
He added that since its privatisation in 2001, PTT had raced ahead in terms of its development.
"Yet, as a national energy company, PTT still needs support from the government and the general public. Otherwise, PTT would have difficulties in competing against others. Based on the earnings ratio on sale or assets, PTT is relatively small compared to competitors like ExxonMobil or Malaysia's Petronas," he said.
While PTT Exploration and Production (PTTEP) will invest Bt480 billion in the period, PTT and other subsidiaries will invest a combined Bt1 trillion - and Egat another Bt300 billion.
Prasert lamented the government's policy that required PTT to shoulder oil price subsidies worth about Bt40 billion last year. Meanwhile, PTT had to subsidise the price of liquefied petroleum gas to the tune of about Bt5 billion, which only weakened the company.
"In 2008, PTT's net profit totalled US$1.6 billion [Bt53.7 billion] and some social groups said this was too high. Yet, compared to $15 billion at Petronas or $45 billion at ExxonMobil, the profit is small. Meanwhile, PTT is responsible for seeking new energy supplies. Without profits, good governance and government support, how can PTT mobilise funds to finance the expansion?" he said.
PTTEP chief executive officer Anon Sirisaengtaksin echoed Prasert's point, saying that government support was necessary or projects could be disrupted due to high risks.
PTTEP's investment plan is aimed at ensuring sufficient supply, as Thailand's oil consumption will rise from 1.7 million barrels per day to 2.7 million in the next 10 years.
The company now supplies 260,000 barrels a day and is in the process of raising this to 400,000. It is involved in 40 exploration and production projects in 13 countries, with 20 of them under exploration.
Egat governor Sombat Sarntijaree said his agency's investment would depend on the national power development plan, which is being revised.
He said it was necessary for Thailand to diversify fuels for power generation and for the government to further educate the public on nuclear power.
Jiraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said that at present, local communities and non-government agencies were opposed to fuels like biomass, coal and nuclear.
He said the situation would pose threats to national energy security, and the government would therefore do its best to communicate with the public - or no investors would dare to commit to energy projects.
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