Banpu targets 200MW renewable power portfolio

Battling a slump in international coal prices that began more than three years ago, the listed company has kept on track all of its plans to complete existing power projects and to buy or build new ones.
The company recently took the first step in expanding into renewable energy with its investments in Japanese solar farms spreading across the northern and central parts of the country, with a total power generating capacity of 37MW, equity-based.
“We are evaluating investment and acquisition opportunities in renewables throughout the Asia-Pacific region, including in China, India and Asean countries. These types of projects offer the advantage of a short lead time, plus a short payback |period. Banpu expects to scale up renewable power generation to 200MW within a three-year time frame,” said chief executive officer Somruedee Chaimongkol.
Banpu reported disappointing second-quarter financial results on Thursday that showed it had swung into a net loss of Bt54 million, compared with a net profit of Bt686 million booked in the same period last year.
However, Somruedee told a press conference yesterday that the losses mainly stemmed from a change in the company’s accounting policy to become one of only two listed Thai firms to apply a strict international accounting standard.
“During the first half, our power business had an operating profit of US$40 million [Bt1.41 billion] and the coal business $61 million, making a total operating profit of $101 million. However, we booked a net income of less than $1 million for the first half after applying the new accounting rules and paying interest rates,” she said.
“Banpu’s power-assets portfolio is growing, and the growth will be significant in 2018 when we have a total of 2,300MW of equity-based capacity from all committed projects.
“Currently our equity capacity is around 1,400MW, but this will increase by an additional 900 equity-megawatts when the Hongsa and Shanxi Lu Guang power plants reach full commercial operations,” she said.
Adding new conventional and renewable power projects under negotiation and plans across the Asia-Pacific region, the company could increase its Asia-Pacific power-plants portfolio to 4,000MW by 2020, she said. “Thanks to our company-wide cost-control efforts and efficient cash-flow management, the total cost of sales in the first half of 2015 reduced by 17 per cent year on year, a saving of $171 million, to $865 million,” said the CEO.
The company hopes that coal prices will bottom out from the middle of next year.