The rapid transition of non-oil energy conglomerate Banpu Group towards clean energy could not have happened without the establishment of Banpu Power Plc (BPP).
The spin-off of BPP, which was listed on the Stock Exchange of Thailand in 2016, created a new company specialising in power generation. Banpu, which started as a coal miner and supplier almost four decades ago, remains focused on energy resources.
Banpu's announcement of its Smart Energy for Sustainability campaign set a five-year direction, starting in 2021, for BPP to push ahead with renewable energy projects and make them the centre of business operations.
The coal business is no longer a focus as the company caps coal production and switches to clean or smart energy development as well as new businesses, including electric vehicles (EVs).
TEXAS TWO-STEP
BPP sees this year as an opportunity to benefit from its power generation facilities overseas, aiming to increase electricity generation capacity, said Kirana Limpaphayom, chief executive of BPP.
He said BPP set a five-year plan to increase capacity to 5.3 gigawatts, up from 2.9GW, by 2025.
Of the new total capacity, 2.5GW is set to be produced by power plants with "high efficiency, low emission" technology; 2GW is going to be generated by thermal power plants; and 0.8GW is set to come from renewable energy.
Mr Kirana said the US state of Texas is among the markets where BPP can expand its reach by developing new electricity generation capacity after power plants there with a combined capacity of 6.3GW are scheduled to retire between 2022 and 2026.
BPP plans to do business with grid operator Electric Reliability Council of Texas, which buys electricity from various sources ranging from fossil fuel-fired power plants to renewable power generation facilities.
Last year BPP announced it acquired a new power plant in Texas in a share purchase deal worth US$430 million, or around 14.1 billion baht.
The deal, made through BKV-BPP Power Llc, a joint venture between BPP and Banpu Group, led to the purchase of 100% of shares in Generation Intermediate Holdings II Llc, which runs Temple 1 power plant.
Temple 1 is a combined cycle gas-fired power plant, with generation capacity of 768 megawatts. The plant, which has operated since July 2014, should help Banpu rack up revenue immediately without waiting for construction of a new facility, he said.
It uses combined cycle gas turbine technology to ensure more efficient electricity production, which is also environmentally friendly.
Texas has high demand for electricity and the plant has first priority to supply the market under a "merit order" system because it has low cost and steady power generation, according to Mr Kirana.
PACIFIC RIM
Others Banpu assets in Japan and Australia also have potential to generate revenue for the company.
BPP acquired 2.5 billion baht worth of shares in Nakoso IGCC Management (Nimco), which owns the 543MW Nakoso IGCC power plant in Japan's Fukushima Prefecture, as BPP sought quick returns.
The facility, starting operation in April last year, is equipped with environmentally friendly gasification combined cycle (IGCC) technology, which uses a gasifier to turn coal into gas as fuel. This technology enables Nakoso IGCC to generate more power per tonne of coal with low emissions.
Among Banpu's investments is the acquisition of two utility-scale solar farms in New South Wales, Australia, in a deal worth A$97.5 million (2.33 billion baht).
The new assets -- Beryl Solar Farm with a capacity of 111MW and Manildra Solar Farm with 55.9MW -- marked another step in Banpu's move towards renewable generation in Australia, where it has been operating coal mines for more than two decades.
Mr Kirana is determined to make BPP a leader in the power generation industry and aims to have a portfolio balanced between the renewable and thermal energy sectors in Asia-Pacific.
"Renewable energy technology has just started to disrupt the power business. I believe it will not be too long before the technology brings about lower operation costs," he said.
NEW BUSINESSES
EV development and energy management solutions are among the businesses that promise a sustainable path for Banpu, said Mr Kirana.
Batteries for EVs need to be improved to have a lighter weight, require less charging time and have a longer life, he said.
BPP and Banpu Group also jointly established Banpu Next Co to develop energy technology businesses.
Earlier last year Banpu Next and local startup Urban Mobility Technology launched Haup Car mobile application for EV ride-sharing to facilitate transport. The business plan calls for EVs in the venture to increase from 100 in 2021 to 1,000 this year.
A goal of 5,000 EVs is set for 2025.
Banpu Next also launched the MovMi app for electric tuk-tuks. The three-wheel vehicles primarily serve as feeders taking commuters to and from minor roads to electric trains in Bangkok.
The company also launched the smart city project, which promotes wise use of energy, at Rugby School Thailand, a private co-educational British international school in Chon Buri's Bang Lamung district.
"The new structures of our businesses are shaping up. We will continue to make updates to ensure a successful business direction in the post-pandemic period," said Mr Kirana.
