SET-listed Sakol Energy (SKE), a compressed natural gas trader and biomass power plant operator, has secured a long-term agreement to sell refused-derived fuel (RDF) to Siam Cement Group Plc (SCG), marking a significant step in the waste-to-energy (WTE) business.
SKE signed an online agreement yesterday to sell 135,000 tonnes of RDF to SCI Eco Co, the waste management arm of SCG, for three years. SKE operates an RDF production facility in Amata Nakorn Industrial Estate in Chon Buri through its subsidiary N15 Technology Co. Its production capacity stands at between 80,000 and 100,000 tonnes a year.
The company is also building a new RDF plant in Saraburi. It is scheduled to start operation with annual capacity of 200,000 tonnes in the third quarter of 2022, said Jakkraphong Sumethchotimetha, managing director of SKE. The development cost of the Saraburi facility is 400 million baht.
SKE is in talks with other prospective RDF buyers, including RDF-fired power plant operators and cement makers that have plants near its RDF production factory.
The company diversified into the WTE business after it acquired N15 Technology Co at a cost of 145 million baht. SKE then developed a plan to increase RDF production capacity.
Mr Jakkraphong expects WTE power generation systems to become more popular because of growing environmental concerns among government and business sectors to replace fossil fuels, especially coal, with renewable resources. Governments can be convinced to tie operations to global carbon neutrality campaigns, aiming to strike a balance between carbon dioxide emissions and absorption, he said.
SKE also plans to venture into the solid waste management business at landfills nationwide by collaborating with business partners to provide feedstock for RDF processing. Talks on new investment estimated at 100 million baht are slated to finish early next year.