Thai Energy Giant Lines Up $200 Million for U.S. Renewable Push
(Bloomberg) -- Banpu Power Pcl, a Thai power producer, is doubling down on its U.S.-led growth strategy by pledging to invest at least $200 million in renewable energy projects to add to its existing shale gas and electricity portfolios.
Banpu Power, the electricity generation unit of Banpu Pcl, plans to build solar and wind projects totaling about 400 megawatts capacity in Texas next year, according to Chief Executive Officer Kirana Limpaphayom. By 2025, the Texas facilities may account for 50% of Banpu’s global renewable portfolio, which also includes plants in Australia, China and Japan, he said.
Banpu is the latest Thai company to target the U.S. renewable market, citing the nation’s growing demand for power from clean sources. Banpu Power along with a group firm bought a Texas power producer earlier this year for $430 million with a target to supply natural gas from its own shale gas assets in the U.S.
“The U.S. has high energy demand and continuous growth, and in Texas alone, the size of demand is comparable to that of Thailand,” Kirana said in an interview. “While demand in Thailand is growing each year, supply from power projects is also growing at the same pace, so there are more opportunities elsewhere.”
The U.S. focus of Thai companies such as B.Grimm Group and Electricity Generating Pcl shows higher growth potential outside of their home country. According to BloombergNEF, the Southeast Asian nation’s lack of new programs to spur capacity growth and its high reserve margin in the electricity system is expected to hold back the growth of solar and wind power capacity additions over the next five years.
While Thailand has pledged to reduce all greenhouse-gas emissions to net zero by 2065, it’s still highly reliant on coal and gas for power and electricity generation is still dominated by state-run Electricity Generating Authority of Thailand. With an oversupply situation and a lack of large-scale opportunities, community biomass and biogas projects will be one of the main drivers of renewable power developments in Thailand, BloombergNEF analysts Allen Tom Abraham and Caroline Chua said in a note on Nov. 22.
For Banpu Power, an annual demand growth of 1%-2% and the suitable environment for solar and wind farms make Texas an “attractive destination,” Kirana said.
“Texas is a booming place for renewable energy. It has plenty of wind, sunshine and land that’s bigger than Thailand,” Kirana said. “Opportunities for renewable power aren’t just limited to the U.S. of course, but in the near-term, the focus will be in the U.S.”
©2021 Bloomberg L.P.