Japanese investment in Thailand is set to surge - with life-sciences and hightech companies, in particular, seeking to expand their presence - from the beginning of next year as the two economies recover from recession.
Both Japan and Thailand will be more stable economically and politically next year, said representatives of the Osaka Chamber of Commerce and Industry (OCCI) during a three-day visit to Bangkok.
Japan will hold an election by the end of this month, while the political uncertainties that have plagued investment in Thailand for years are expected to ease during the rest of the year, OCCI vice-chairman Makoto Kato said yesterday.
"The Japanese economy is coming back from recession and companies will be ready to aggressively invest abroad from the beginning of next year," said Mr Kato, who is accompanying governor Toru Hashimoto and executives of 14 Osaka-based firms as they explore business opportunities in Thailand.
"By then, I think the Thai economy will be also on the recovery path while political issues will see some improvement."
Osaka, with 8.8 million residents, contributes 8% of the Japanese economy with a gross domestic product of $333.5 billion. The city is home to the whitegoods giants Sharp and Panasonic and to other leading Japanese brands such as Daihatsu, Kubota, Suntory, Takeda and Mizuno.
"The new wave of Japanese investment in Thailand will be more in high-tech and value-added industries to avoid rising competition from lower-wage countries.Osaka itself has a strong expertise in life sciences, biotechnology and alternative energies and we are keen to invest here,"said Mr Kato.
Technologies for hybrid vehicles and eco-cars, as well as for electric vehicles,are elements Osaka could deliver to Thai partners, he added.
With 258 of its firms present in Thailand, Osaka is second only to Tokyo for its businesses' investment in Thailand.Japan is also Thailand's largest foreign investor with 130 projects worth more than 30 billion baht approved by the Board of Investment in the first seven months of this year.
Thailand Trade Representative Vachara Phanchet said the time is right for Thai investors to invest in Osaka by forming joint ventures with Japanese partners.
"The Japanese economy is bouncing back from the crisis but is not yet as strong as in the past. This provides a good chance for Thai companies to have greater access for investing there," he said.
Japanese financial institutions, including the Japan Bank for International Co-operation and the Development Bank of Japan, have recently agreed to provide financial support to foreign small and medium-sized companies investing in the country, added Mr Vachara.
Osaka is in the mid-western Kansai region, where bilateral trade with Thailand has increased since the launch of the Japan-Thailand Economic Partnership Agreement in November 2007. Exports from Kansai to Thailand stayed at about $6 billion with imports totalling $3.6 billion last year.
Tuesday, August 25, 2009
Ethics and rights protection seen lacking in energy plans
Asia-Pacific countries are being encouraged to incorporate ethics and human rights protection into their energy policies.
Experts yesterday said many countries had not yet included these two factors into their energy development plans.
John Beaton, executive director of Australia's Academy of Social Sciences, told a Unesco forum on ethics and energy technologies held in Bangkok the region faced common challenges in protecting the dignity of people while implementing its energy policies.
In Australia, Mr Beaton said, politicians did not bother about public opinion when it came to power development projects, including nuclear power plants,as they were obsessed with how to win elections.
"It's only recently the National Academy Forum, comprising scholars from pure sciences, social sciences, humanities and technological sciences, have come together to debate how to deal with the issue and public opinion," he said.
Shu-min Huang, director of the In-stitute of Ethnology from Taiwan, said governments did not seem to take adequate heed of, or take the lead in, ensuring the right to information and sharing goals in environmental protection.
"Ethics and social sciences have yet to be considered an integral part of the methodological conceptualising of energy policy decisions, even in my country," Mr Huang said.
Darryl Macer, Unesco regional adviser,said the more governments embraced ethics in their energy technology choices,the more villagers could be involved in bottom-up decision making.
"This empowerment could help people gain energy knowledge and control of their choices," Mr Macer said.
Thara Buakhamsri, Greenpeace coordinator, agreed that ethics and human rights had yet to become part of policy makers' mindsets.
"The hyped concern over global warming has become a pretext to promote nuclear power to replace fossilbased fuels without asking what the Thai people want," Mr Thara said."Policy makers have always designed energy plans based on their own convenience."
Experts yesterday said many countries had not yet included these two factors into their energy development plans.
John Beaton, executive director of Australia's Academy of Social Sciences, told a Unesco forum on ethics and energy technologies held in Bangkok the region faced common challenges in protecting the dignity of people while implementing its energy policies.
In Australia, Mr Beaton said, politicians did not bother about public opinion when it came to power development projects, including nuclear power plants,as they were obsessed with how to win elections.
"It's only recently the National Academy Forum, comprising scholars from pure sciences, social sciences, humanities and technological sciences, have come together to debate how to deal with the issue and public opinion," he said.
Shu-min Huang, director of the In-stitute of Ethnology from Taiwan, said governments did not seem to take adequate heed of, or take the lead in, ensuring the right to information and sharing goals in environmental protection.
"Ethics and social sciences have yet to be considered an integral part of the methodological conceptualising of energy policy decisions, even in my country," Mr Huang said.
Darryl Macer, Unesco regional adviser,said the more governments embraced ethics in their energy technology choices,the more villagers could be involved in bottom-up decision making.
"This empowerment could help people gain energy knowledge and control of their choices," Mr Macer said.
Thara Buakhamsri, Greenpeace coordinator, agreed that ethics and human rights had yet to become part of policy makers' mindsets.
"The hyped concern over global warming has become a pretext to promote nuclear power to replace fossilbased fuels without asking what the Thai people want," Mr Thara said."Policy makers have always designed energy plans based on their own convenience."
Friday, August 21, 2009
2%rise in power use signals recovery
National power consumption is up by 2% this month, the first increase in eight months and a sign of recovery, said Electricity Generating Authority of Thailand (Egat) governor Sombat Sarntijaree.
Consumption was up to 8,293.7 million units (kilowatt/hours) in the first 20 days of August,2% more than in the same period last year.
"This is the first time that power use has been on the rise since the economic crisis began. Since October last year until last month, power consumption has kept declining in line with the slowdown in industry and consumers' purchasing power," he said.
Power demand was below last year's figures from January to July. Consumption in January was down by 13% to 10,140 million units, in February by 0.03%to 10,862 million, March by 3% to 12,628 million, April by 3.3% to 11,898 million,May by 1.7% to 12,552 million, June by 3% to 12,389 million and July by 2.23%to 12,509 million.
In the first quarter there was a 5.5%decline to 33,615 million units.
Last year power consumption edged up almost 1%, with political conflict and high oil prices curbing growth. This year Egat expects power consumption to shrink by between 2% and 2.5% from 2008, said Mr Sombat.
Until this year, Thailand's power de-mand had fallen only once in the last 25 years - during the financial crisis in 1998, when demand slipped 2% before growing 2% the following year.
"The positive growth of demand was genuinely an indicator for the economy that it was recovered. We hope the positive growth this time will also be the same," said Mr Sombat.
He also said Egat was now assessing the damage in suffered from PTT's gas pipeline leak last weekend and would bill PTT."We handled the immediate crisis by using other fuels instead of natural gas and these fuels were more expensive than gas," he said.
An extra 400 million baht in production costs corresponds to one satang per unit of fuel, he said.
The incident shows that the country badly needs to improve its power management, said Egat deputy governor Somboon Arayaskul."At that time [last weekend], we needed to use reserve capacity,which is about 25% of total power capacity. Yet we had to push hydroelectric generators to work exceeding their limits to control the situation," he said.
This reflected Thailand's excessive reliance on natural gas, which accounts for 74% of fuel used in power generation,creating a high risk of blackouts, he said.
Developed countries balance fuels such as gas, coal, nuclear and hydro.When one fuel is disrupted, the impact is limited and others can compensate.
Consumption was up to 8,293.7 million units (kilowatt/hours) in the first 20 days of August,2% more than in the same period last year.
"This is the first time that power use has been on the rise since the economic crisis began. Since October last year until last month, power consumption has kept declining in line with the slowdown in industry and consumers' purchasing power," he said.
Power demand was below last year's figures from January to July. Consumption in January was down by 13% to 10,140 million units, in February by 0.03%to 10,862 million, March by 3% to 12,628 million, April by 3.3% to 11,898 million,May by 1.7% to 12,552 million, June by 3% to 12,389 million and July by 2.23%to 12,509 million.
In the first quarter there was a 5.5%decline to 33,615 million units.
Last year power consumption edged up almost 1%, with political conflict and high oil prices curbing growth. This year Egat expects power consumption to shrink by between 2% and 2.5% from 2008, said Mr Sombat.
Until this year, Thailand's power de-mand had fallen only once in the last 25 years - during the financial crisis in 1998, when demand slipped 2% before growing 2% the following year.
"The positive growth of demand was genuinely an indicator for the economy that it was recovered. We hope the positive growth this time will also be the same," said Mr Sombat.
He also said Egat was now assessing the damage in suffered from PTT's gas pipeline leak last weekend and would bill PTT."We handled the immediate crisis by using other fuels instead of natural gas and these fuels were more expensive than gas," he said.
An extra 400 million baht in production costs corresponds to one satang per unit of fuel, he said.
The incident shows that the country badly needs to improve its power management, said Egat deputy governor Somboon Arayaskul."At that time [last weekend], we needed to use reserve capacity,which is about 25% of total power capacity. Yet we had to push hydroelectric generators to work exceeding their limits to control the situation," he said.
This reflected Thailand's excessive reliance on natural gas, which accounts for 74% of fuel used in power generation,creating a high risk of blackouts, he said.
Developed countries balance fuels such as gas, coal, nuclear and hydro.When one fuel is disrupted, the impact is limited and others can compensate.
Thursday, August 20, 2009
Egco starts up green power
NET PROFIT FOR H12009 vs H12008 B4.6 billion B4.2 billion
Egco Group Plc, Thailand's secondlargest private power producer, will spend 2 billion baht developing renewable energy next year, president Vinit Tangnoi said yesterday.
The company is conducting a feasibility study and seeking equipment suppliers and contractors for the projects.
The plan envisages an eight-megawatt wind turbine project worth one billion baht in Nakhon Ratchasima and a solar power grid with a capacity of 13.5 megawatts in Lop Buri.
Its renewable business will invest through its subsidiary Natural Energy Development Co, the equal-stake venture of Egco, Hongkong-based China Light Power Asia and Diamond General Asia, a subsidiary of the Japanese industrial conglomerate Mitsubishi Heavy Industry.
Although solar power production is not viable commercially at present due to the high cost, the company is hopeful of gaining support from the climate change concern body, the United Nations, in carbon-credit trading.
"We can't sell power from our solar farm, even with the adder tariff (a special purchasing rate that is higher than that for conventional fuels) provided by pol-icymakers to help us shoulder the high cost," Mr Vinit said.
"But we hope if we are success in receiving the certification on carbon credit from the United Nation, the carbon-credit income should be enough to offset the cost and make the project viable."
The Electricity Generating Authority of Thailand has offered special purchasing rates for power generated from renewable energy.
For solar power, producers get eight baht a unit more than the three baht that Egat pays for power generated from mainstream fuels.
For wind power, producers will get an adder tariff of 4.50 baht a unit, Mr Vinit said.
Egco's first-half revenue rose 11% to 19.7 billion baht from 17.7 billion baht a year earlier, with net profit rising 9%year-on-year to 4.6 billion baht from 4.2 billion baht.
He attributed the growth to the additional power output from its newly started-up power plants in Saraburi,Kaeng Khoi Power Plant unit 2 and the Philippines' coal-fired Quezon power plant.
The company also confirmed the startup schedule of its new 1,086-megawatt hydropower plant in Laos, Nam Theun 2, on Dec 15 as planned.
Shares of EGCO closed yesterday on the Stock Exchange of Thailand at 75.25 baht, unchanged, in trade worth 22.36 million baht.
Egco Group Plc, Thailand's secondlargest private power producer, will spend 2 billion baht developing renewable energy next year, president Vinit Tangnoi said yesterday.
The company is conducting a feasibility study and seeking equipment suppliers and contractors for the projects.
The plan envisages an eight-megawatt wind turbine project worth one billion baht in Nakhon Ratchasima and a solar power grid with a capacity of 13.5 megawatts in Lop Buri.
Its renewable business will invest through its subsidiary Natural Energy Development Co, the equal-stake venture of Egco, Hongkong-based China Light Power Asia and Diamond General Asia, a subsidiary of the Japanese industrial conglomerate Mitsubishi Heavy Industry.
Although solar power production is not viable commercially at present due to the high cost, the company is hopeful of gaining support from the climate change concern body, the United Nations, in carbon-credit trading.
"We can't sell power from our solar farm, even with the adder tariff (a special purchasing rate that is higher than that for conventional fuels) provided by pol-icymakers to help us shoulder the high cost," Mr Vinit said.
"But we hope if we are success in receiving the certification on carbon credit from the United Nation, the carbon-credit income should be enough to offset the cost and make the project viable."
The Electricity Generating Authority of Thailand has offered special purchasing rates for power generated from renewable energy.
For solar power, producers get eight baht a unit more than the three baht that Egat pays for power generated from mainstream fuels.
For wind power, producers will get an adder tariff of 4.50 baht a unit, Mr Vinit said.
Egco's first-half revenue rose 11% to 19.7 billion baht from 17.7 billion baht a year earlier, with net profit rising 9%year-on-year to 4.6 billion baht from 4.2 billion baht.
He attributed the growth to the additional power output from its newly started-up power plants in Saraburi,Kaeng Khoi Power Plant unit 2 and the Philippines' coal-fired Quezon power plant.
The company also confirmed the startup schedule of its new 1,086-megawatt hydropower plant in Laos, Nam Theun 2, on Dec 15 as planned.
Shares of EGCO closed yesterday on the Stock Exchange of Thailand at 75.25 baht, unchanged, in trade worth 22.36 million baht.
Australia sets "green" target
Australia yesterday passed a clean energy law requiring the country to produce 20% of its power from renewable sources by 2020 in a move that could draw billions of dollars in green investment.
The Australian senate passed the government-sponsored bill just days after parliament rejected furtherreaching but controversial legislation aimed at slashing carbon emissions.
"This is an extremely important achievement and it is one of the key institutional changes in the battle that the government is undertaking to deal with climate change," said Greg Combet,deputy minister for climate change.
"The passage of the legislation will help unlock investment in renewable energy generation and of course in jobs associated with those industries in areas like solar and wind power, amongst others," Combet told parliament.
While the lower house has passed the bill, it will return there for approval on a few minor technical changes before formally becoming law.
Electricity companies will now be forced to buy a portion of their power from renewable sources under the laws,which passed without opposition after being split from the controversial emissions trading bill on Sunday.
Origin Energy, Australia's largest green energy provider, welcomed the renewable energy laws but said they were a poor second to the tougher carbon pollution reduction scheme (CPRS)proposed under the emissions bill.
"In the longer term, the CPRS is the lowest-cost way to drive investment in cleaner technologies," said Origin executive general manager Carl McCamish."We encourage all political parties to negotiate a workable agreement to ensure that the CPRS is passed as soon as possible."
Combet warned that without the CPRS, emissions would be 20% higher in 2020 than they were in 2000.
"It is the principal mechanism by which we will go ahead to reduce greenhouse gas emissions in this country and play a constructive role in international negotiations over climate change," he said.
The conservative opposition joined forces with the Greens and independents in the senate earlier this week to reject the combined renewables-emissions bill, which aims to cut carbon pollution by five to 25% by 2020.
The Greens supported the separate renewable energy plan despite failing in a bid to have the target for renewables lifted from 20% to 30%.
Greens Senator Christine Milne said the bill's passage showed the centreleft Labor government was willing to change its emissions trading plan to get it through parliament ahead of UN climate talks in Copenhagen.
If Labor reintroduces the plan after three months and the Senate again rejects it, Prime Minister Kevin Rudd could call an early election ahead of the late 2010 deadline.
But Rudd, who is riding high in opinion polls, has said he does not have the "slightest intention" of going to an early vote, and this week warned the Senate risked damaging Australia's economy if it again rejected the scheme.
Rudd, who won office in 2007 on a strongly green platform, has described climate change as "the greatest moral challenge of our generation" for Australia, which is in the grip of the worst drought in a century.
The Australian senate passed the government-sponsored bill just days after parliament rejected furtherreaching but controversial legislation aimed at slashing carbon emissions.
"This is an extremely important achievement and it is one of the key institutional changes in the battle that the government is undertaking to deal with climate change," said Greg Combet,deputy minister for climate change.
"The passage of the legislation will help unlock investment in renewable energy generation and of course in jobs associated with those industries in areas like solar and wind power, amongst others," Combet told parliament.
While the lower house has passed the bill, it will return there for approval on a few minor technical changes before formally becoming law.
Electricity companies will now be forced to buy a portion of their power from renewable sources under the laws,which passed without opposition after being split from the controversial emissions trading bill on Sunday.
Origin Energy, Australia's largest green energy provider, welcomed the renewable energy laws but said they were a poor second to the tougher carbon pollution reduction scheme (CPRS)proposed under the emissions bill.
"In the longer term, the CPRS is the lowest-cost way to drive investment in cleaner technologies," said Origin executive general manager Carl McCamish."We encourage all political parties to negotiate a workable agreement to ensure that the CPRS is passed as soon as possible."
Combet warned that without the CPRS, emissions would be 20% higher in 2020 than they were in 2000.
"It is the principal mechanism by which we will go ahead to reduce greenhouse gas emissions in this country and play a constructive role in international negotiations over climate change," he said.
The conservative opposition joined forces with the Greens and independents in the senate earlier this week to reject the combined renewables-emissions bill, which aims to cut carbon pollution by five to 25% by 2020.
The Greens supported the separate renewable energy plan despite failing in a bid to have the target for renewables lifted from 20% to 30%.
Greens Senator Christine Milne said the bill's passage showed the centreleft Labor government was willing to change its emissions trading plan to get it through parliament ahead of UN climate talks in Copenhagen.
If Labor reintroduces the plan after three months and the Senate again rejects it, Prime Minister Kevin Rudd could call an early election ahead of the late 2010 deadline.
But Rudd, who is riding high in opinion polls, has said he does not have the "slightest intention" of going to an early vote, and this week warned the Senate risked damaging Australia's economy if it again rejected the scheme.
Rudd, who won office in 2007 on a strongly green platform, has described climate change as "the greatest moral challenge of our generation" for Australia, which is in the grip of the worst drought in a century.
Wednesday, August 19, 2009
UMS expects strong H2 revenue rebound
The coal importer Unique Mining Services (UMS) expects a strong rebound in its financial performance in the second half of the year as the improving global economy pushes up coal prices and demand.
Coal could hit US$80 per tonne in the fourth quarter, up from $75 now,said Piya Tanthanaphiphat, acting assistant managing director.
Three months ago, coal fell to a yearlow of $63 per tonne, for coal with a relatively low heat content of 5,000 kilocalories per kilogramme.
"If the economy sees signs of recovery, especially in the fourth quarter,industries that use coal will start to stock up again," Mr Piya told investors at a briefing at the Stock Exchange of Thailand yesterday.
"The increase in the price of oil will also cause business operators to continue changing from fuel-oil boilers to coal boilers. We should see this shift over the next 6-12 months."
UMS, an importer of Indonesian coal,mostly supplies local small and medium-sized companies.
The company will enjoy a good margin on second-half sales as its current stock was purchased at lower prices earlier in the year, said Mr Piya, who heads the company's investment development department.
UMS is also considering a 1-billionbaht joint investment in a new mine in Indonesia. The company is reviewing three possible sites, with a decision expected by the year-end.
To help finance the investment, the company will not pay interim dividends for its first-half performance.
UMS posted first-half revenue of 1.39 billion baht, down from 1.56 billion the same period last year. First-half net profit fell to 191.49 million baht,down from 240 million year-on-year.
Second-quarter revenue slid to 651.45 million baht, down from 704.9 million in the same period last year. Secondquarter profit dropped to 84.3 million,down from 103.7 million year-on-year.
But second-half revenue is expected to rise 20% from the first half to 1.7 billion baht, said Mr Piya. In any case,full-year revenue is projected at 3.1 billion baht, or about 10% less than last year.
UMS shares closed yesterday on the Stock Exchange of Thailand at 12.80 baht, down 50 satang, in trade worth 23.686 million baht.
Coal could hit US$80 per tonne in the fourth quarter, up from $75 now,said Piya Tanthanaphiphat, acting assistant managing director.
Three months ago, coal fell to a yearlow of $63 per tonne, for coal with a relatively low heat content of 5,000 kilocalories per kilogramme.
"If the economy sees signs of recovery, especially in the fourth quarter,industries that use coal will start to stock up again," Mr Piya told investors at a briefing at the Stock Exchange of Thailand yesterday.
"The increase in the price of oil will also cause business operators to continue changing from fuel-oil boilers to coal boilers. We should see this shift over the next 6-12 months."
UMS, an importer of Indonesian coal,mostly supplies local small and medium-sized companies.
The company will enjoy a good margin on second-half sales as its current stock was purchased at lower prices earlier in the year, said Mr Piya, who heads the company's investment development department.
UMS is also considering a 1-billionbaht joint investment in a new mine in Indonesia. The company is reviewing three possible sites, with a decision expected by the year-end.
To help finance the investment, the company will not pay interim dividends for its first-half performance.
UMS posted first-half revenue of 1.39 billion baht, down from 1.56 billion the same period last year. First-half net profit fell to 191.49 million baht,down from 240 million year-on-year.
Second-quarter revenue slid to 651.45 million baht, down from 704.9 million in the same period last year. Secondquarter profit dropped to 84.3 million,down from 103.7 million year-on-year.
But second-half revenue is expected to rise 20% from the first half to 1.7 billion baht, said Mr Piya. In any case,full-year revenue is projected at 3.1 billion baht, or about 10% less than last year.
UMS shares closed yesterday on the Stock Exchange of Thailand at 12.80 baht, down 50 satang, in trade worth 23.686 million baht.
New push coming for coal and nuclear
The government will put more effort into educating the public about the essential need for clean coal technology and nuclear power in order to balance fuel usage, says Energy Minister Wannarat Channukul.
Energy policymakers are again revising the 15-year power development plan (PDP) to place greater emphasis on coal,nuclear and renewable fuels and less emphasis on natural gas.
"Coal-fired power and nuclear power are the most preferred fuels, considering their low costs and emissions," Mr Wannarat said yesterday.
"Yet these fuels are opposed strongly by people. We have to put the utmost effort into making them understand and accept them. This is a very tough task."
Local activists in 2001 forced the cancellation of plans for two large coalfired plants with total capacity of 2,100 megawatts in Prachuap Khiri Khan, because of environmental impact. The fuel was changed to gas and the plants moved to Ratchaburi and Saraburi.
An incident over the weekend in Kanchanaburi has given new impetus to efforts to change the long-term PDP.
A pipeline leak in Kanchanaburi on Sunday disrupted gas supplies from Burma. At the same time, repairs were under way to a leak in the pipeline bringing gas from the Gulf of Thailand.
The Electricity Generating Authority of Thailand had to increase hydroelectricity output at the Srinakarin Dam,leading to floods that damaged communities nearby.
Pornchai Rujiprapha, the ministry's permanent secretary and chairman of Egat, said the agency was open to hearing the views of environmental activists and others about the PDP revision.
Natural gas now accounts for 74% of the fuel in power production, imported and domestic coal 18%, hydroelectricity 6%, with the rest renewable energy and power from Laos and Malaysia.
Under the former PDP, revised in 2007,natural gas usage would be reduced to 38% of total power output by 2021, with imported power from neighbouring countries 28%, coal 21, nuclear power 10% and renewables the rest.
Purchases from abroad will also need to be diversified to reduce heavy dependence on one country, he said.
Energy policymakers are again revising the 15-year power development plan (PDP) to place greater emphasis on coal,nuclear and renewable fuels and less emphasis on natural gas.
"Coal-fired power and nuclear power are the most preferred fuels, considering their low costs and emissions," Mr Wannarat said yesterday.
"Yet these fuels are opposed strongly by people. We have to put the utmost effort into making them understand and accept them. This is a very tough task."
Local activists in 2001 forced the cancellation of plans for two large coalfired plants with total capacity of 2,100 megawatts in Prachuap Khiri Khan, because of environmental impact. The fuel was changed to gas and the plants moved to Ratchaburi and Saraburi.
An incident over the weekend in Kanchanaburi has given new impetus to efforts to change the long-term PDP.
A pipeline leak in Kanchanaburi on Sunday disrupted gas supplies from Burma. At the same time, repairs were under way to a leak in the pipeline bringing gas from the Gulf of Thailand.
The Electricity Generating Authority of Thailand had to increase hydroelectricity output at the Srinakarin Dam,leading to floods that damaged communities nearby.
Pornchai Rujiprapha, the ministry's permanent secretary and chairman of Egat, said the agency was open to hearing the views of environmental activists and others about the PDP revision.
Natural gas now accounts for 74% of the fuel in power production, imported and domestic coal 18%, hydroelectricity 6%, with the rest renewable energy and power from Laos and Malaysia.
Under the former PDP, revised in 2007,natural gas usage would be reduced to 38% of total power output by 2021, with imported power from neighbouring countries 28%, coal 21, nuclear power 10% and renewables the rest.
Purchases from abroad will also need to be diversified to reduce heavy dependence on one country, he said.
Tuesday, August 18, 2009
Nurturing the best ideas
By day, Kishor Gadkaree puts samples of a honeycomb-shaped filter into a miniature gas chamber that simulates the insides of a coal-burning smokestack.These rigorous tests will take years. But by night, Gadkaree dreams that this filter, which is designed to neutralise the poisonous mercury spewed by the world's coal-fired power plants,will be the next big hit for a nearly 160-year-old company that recently survived a brush with extinction.
At its newly expanded research haven, Corning Inc is betting tens of millions of dollars that tougher environmental regulations, plus a few more years of experiments, will turn the mercury trap into something that can generate at least $500 million to $1 billion (17 billion baht to 34 billion baht) in annual sales.
"We are going over those hurdles one by one,"Gadkaree said as he showed off his shelf-top mini-flue at Sullivan Park, a hilltop campus outside this rural town of 10,000, which gave the company its name."We can show it works. Now we're trying to find out how much customers will pay for it."
Corning is famed for entwining specialty materials in potent technologies, from figuring how to make light bulb blanks for Thomas Edison in 1880 to devising hair-thin optical fibres that helped spur the internet revolution.
"We have set ourselves up to be patient," said Mark Newhouse, who oversees Corning's development of new technologies."We talk about how many businesses we will create in 10 years,not in a couple of years."
But while Corning amassed a decade-afterdecade array of breakthroughs ranging from ovenproof Pyrex dinner plates and cathode ray tubes to auto-pollution filters and space-telescope mirrors, the company has had to endure multiple reincarnations.
Never did a cyclical slide turn so ugly as in 2001 to 2002, when the dot-com bust punctured the booming telecommunications equipment market.
Lopsided investments in fibre optics almost capsized Corning - its stock tumbled from $113 in September,2000, to a mere $1.10 in October,2002, as annual revenue shrank to $3.2 billion from $7.1 billion.
Corning quickly reshaped itself as the world's biggest maker of liquid-crystal-display (LCD) glass for flat screen televisions and computers. The ultra-thin monitors delivered 90 percent of Corning's $2.2 billion profit in 2007.
Nonetheless, the company has learned the hard way that it needs to spread its risks over a variety of high-growth businesses.
During its perilous downturn, former chiefexecutive James Houghton came out of retirement to right the ship launched by his great-greatgrandfather, Amory Houghton Sr, when he bought a stake in a Massachusetts glass-maker in 1851.Known to some as "Dark Angel" for his 1980s moves to shelve slow-growth Corning businesses,upon his return James Houghton mothballed fibre plants and slashed the work force from 43,000 to 22,500. He offloaded the once-stellar photonics business, which made the optical switches and other exotica that manage the rapid flow of light signals through optical fibre.
The patriarch and his chosen successor,Wendell Weeks, also turned back the clock. They championed wider exploration of arenas in which Corning boasts expertise, a more freewheeling philosophy once associated with Bell Laboratories and other high-tech powerhouses.
One key difference: while ensuring an unusually high 10 percent of revenue is allocated to research,Corning's management imposed a more rigorous,company-wide system for nurturing the best ideas along, step by step. Out of hundreds of projects each year, it chooses to keep pursuing just a handful seen as likely to hit the jackpot.Among the latest high-wager hopefuls, in addition to the mercury filters for coal plants: Green lasers to equip mobile phones with projectors, microreactors to enhance chemical processing and silicon bonded to glass to extend battery life for hand-held electronics.
"Anything related to glass and glass derivatives,they have probably the best, most concentrated group of experts on the planet," said analyst C.J.Muse of Barclays Capital.
With the economy hurling missiles, Corning's stock stands about $11(375 baht) a share, down from $28(955 baht) in May. The company recently trimmed its plans for 2009 capital spending by up to $200 million (681.4 million baht) after an abrupt slowdown in LCD TV sales - a nagging reminder that relying on one colossal cash cow product leaves it vulnerable to cyclical swings.
So far, research is largely unscathed. With lab space enlarged by a $300 million investment last year, Sullivan Park is packed again with 1,800 scientists, engineers and technicians, up from 1,100 in 2002.
Gadkaree, who has 67 patents in 25 years at Corning, is one of 15 active research fellows who are given more leeway to explore projects of special interest.
In the 1990s, he developed a water-purification filter that was shelved because the market wasn't deemed big enough. But because it was also capable of capturing metals, the filter got another look in 2004 when signs resurfaced that a longanticipated federal law eventually could impose a 90 percent reduction on mercury emissions.
Burning coal sends an estimated 300 tonnes of mercury into the air annually, with US power plants alone accounting for nearly 50 tonnes. As many as 630,000 children born each year in the US are at risk of learning disabilities and physical ailments related to the neurotoxin, according to the Environmental Protection Agency (EPA).
Laws in New Jersey, Connecticut and Massachusetts already require coal plants to snare at least 85 percent of mercury emissions, and more than a dozen other states led by Maryland and Pennsylvania are imposing their own stringent restrictions beginning in 2010.
Corning expects its carbon filter will be more cost-effective than a current technique of injecting activated carbon-based chemicals into flue gas.While the chemicals absorb mercury, they can also contaminate a plant's fly ash residues, which are an ingredient in cement and other construction materials.
The new filter employs a ceramic honeycomb that was invented by Corning in the early 1970s,and sits at the heart of the smog-busting catalytic converter in vehicles. The filter contains hundreds of tiny passages impregnated with chemicals that stabilise and collect mercury particles.
The big question is whether the filter will be able to capture 90 percent of mercury "as we make the filter larger and run ever longer periods",Gadkaree said."In 2004, I would have said the probability [of success] is about 10 percent. Now I'd say maybe 50 percent."
Even those odds are encouraging to Corning,given how big the market for mercury abatement could be. Coal-fired utilities are the largest source of mercury pollution that remains unregulated by the EPA, and yet coal is plentiful and homegrown.
Despite the rise of wind, solar and other renewable-energy alternatives,"there's at least 20 years where even we will concede that there's a role for coal", said John Rumpler, the senior lawyer for Boston-based Environment America."That's a long time horizon for anybody to be investing in mercury-control technologies."
Gadkaree,55, knows too well that without customers, great innovations go nowhere. He hopes this one can leave a bigger mark.
"Getting a paycheck, everybody can do that,right?" he said."But 'you did something good'- at the end of my career, I want to be able to say that."
At its newly expanded research haven, Corning Inc is betting tens of millions of dollars that tougher environmental regulations, plus a few more years of experiments, will turn the mercury trap into something that can generate at least $500 million to $1 billion (17 billion baht to 34 billion baht) in annual sales.
"We are going over those hurdles one by one,"Gadkaree said as he showed off his shelf-top mini-flue at Sullivan Park, a hilltop campus outside this rural town of 10,000, which gave the company its name."We can show it works. Now we're trying to find out how much customers will pay for it."
Corning is famed for entwining specialty materials in potent technologies, from figuring how to make light bulb blanks for Thomas Edison in 1880 to devising hair-thin optical fibres that helped spur the internet revolution.
"We have set ourselves up to be patient," said Mark Newhouse, who oversees Corning's development of new technologies."We talk about how many businesses we will create in 10 years,not in a couple of years."
But while Corning amassed a decade-afterdecade array of breakthroughs ranging from ovenproof Pyrex dinner plates and cathode ray tubes to auto-pollution filters and space-telescope mirrors, the company has had to endure multiple reincarnations.
Never did a cyclical slide turn so ugly as in 2001 to 2002, when the dot-com bust punctured the booming telecommunications equipment market.
Lopsided investments in fibre optics almost capsized Corning - its stock tumbled from $113 in September,2000, to a mere $1.10 in October,2002, as annual revenue shrank to $3.2 billion from $7.1 billion.
Corning quickly reshaped itself as the world's biggest maker of liquid-crystal-display (LCD) glass for flat screen televisions and computers. The ultra-thin monitors delivered 90 percent of Corning's $2.2 billion profit in 2007.
Nonetheless, the company has learned the hard way that it needs to spread its risks over a variety of high-growth businesses.
During its perilous downturn, former chiefexecutive James Houghton came out of retirement to right the ship launched by his great-greatgrandfather, Amory Houghton Sr, when he bought a stake in a Massachusetts glass-maker in 1851.Known to some as "Dark Angel" for his 1980s moves to shelve slow-growth Corning businesses,upon his return James Houghton mothballed fibre plants and slashed the work force from 43,000 to 22,500. He offloaded the once-stellar photonics business, which made the optical switches and other exotica that manage the rapid flow of light signals through optical fibre.
The patriarch and his chosen successor,Wendell Weeks, also turned back the clock. They championed wider exploration of arenas in which Corning boasts expertise, a more freewheeling philosophy once associated with Bell Laboratories and other high-tech powerhouses.
One key difference: while ensuring an unusually high 10 percent of revenue is allocated to research,Corning's management imposed a more rigorous,company-wide system for nurturing the best ideas along, step by step. Out of hundreds of projects each year, it chooses to keep pursuing just a handful seen as likely to hit the jackpot.Among the latest high-wager hopefuls, in addition to the mercury filters for coal plants: Green lasers to equip mobile phones with projectors, microreactors to enhance chemical processing and silicon bonded to glass to extend battery life for hand-held electronics.
"Anything related to glass and glass derivatives,they have probably the best, most concentrated group of experts on the planet," said analyst C.J.Muse of Barclays Capital.
With the economy hurling missiles, Corning's stock stands about $11(375 baht) a share, down from $28(955 baht) in May. The company recently trimmed its plans for 2009 capital spending by up to $200 million (681.4 million baht) after an abrupt slowdown in LCD TV sales - a nagging reminder that relying on one colossal cash cow product leaves it vulnerable to cyclical swings.
So far, research is largely unscathed. With lab space enlarged by a $300 million investment last year, Sullivan Park is packed again with 1,800 scientists, engineers and technicians, up from 1,100 in 2002.
Gadkaree, who has 67 patents in 25 years at Corning, is one of 15 active research fellows who are given more leeway to explore projects of special interest.
In the 1990s, he developed a water-purification filter that was shelved because the market wasn't deemed big enough. But because it was also capable of capturing metals, the filter got another look in 2004 when signs resurfaced that a longanticipated federal law eventually could impose a 90 percent reduction on mercury emissions.
Burning coal sends an estimated 300 tonnes of mercury into the air annually, with US power plants alone accounting for nearly 50 tonnes. As many as 630,000 children born each year in the US are at risk of learning disabilities and physical ailments related to the neurotoxin, according to the Environmental Protection Agency (EPA).
Laws in New Jersey, Connecticut and Massachusetts already require coal plants to snare at least 85 percent of mercury emissions, and more than a dozen other states led by Maryland and Pennsylvania are imposing their own stringent restrictions beginning in 2010.
Corning expects its carbon filter will be more cost-effective than a current technique of injecting activated carbon-based chemicals into flue gas.While the chemicals absorb mercury, they can also contaminate a plant's fly ash residues, which are an ingredient in cement and other construction materials.
The new filter employs a ceramic honeycomb that was invented by Corning in the early 1970s,and sits at the heart of the smog-busting catalytic converter in vehicles. The filter contains hundreds of tiny passages impregnated with chemicals that stabilise and collect mercury particles.
The big question is whether the filter will be able to capture 90 percent of mercury "as we make the filter larger and run ever longer periods",Gadkaree said."In 2004, I would have said the probability [of success] is about 10 percent. Now I'd say maybe 50 percent."
Even those odds are encouraging to Corning,given how big the market for mercury abatement could be. Coal-fired utilities are the largest source of mercury pollution that remains unregulated by the EPA, and yet coal is plentiful and homegrown.
Despite the rise of wind, solar and other renewable-energy alternatives,"there's at least 20 years where even we will concede that there's a role for coal", said John Rumpler, the senior lawyer for Boston-based Environment America."That's a long time horizon for anybody to be investing in mercury-control technologies."
Gadkaree,55, knows too well that without customers, great innovations go nowhere. He hopes this one can leave a bigger mark.
"Getting a paycheck, everybody can do that,right?" he said."But 'you did something good'- at the end of my career, I want to be able to say that."
TISTR in deal to make gas from wood
Thai and Japanese scientists are looking at collaborating to produce an alternative energy source to fossil fuels by creating gas from wood.
The Thailand Institute of Scientific and Technological Research (TISTR)signed a deal on Monday with Japanese energy firm Kansai Corporation to develop the "gasification" technology which produces gas from wood chips.
Wood chips emit methane when heated to between 400 and 1,200C,said Wirachai Soontornrangsi, the TISTR researcher heading the project.
"If we can operate a gasification plant on a commercial scale, we will have another renewable source of fuel for vehicles and electricity-generatin g systems," Mr Wirachai said.
"It could help the country save bi g money on oil purchases."
Thailand has plenty of materials,such as wood chips and biomass, that can be used to create methane via such a process, but it lacked technical skills.
The TISTR has studied the technology for four years and now aims to produce methane commercially.
Kansai's chief engineer, Hiroyuki Monobe, said the company had researched and developed gasification technology for many years.
The technology uses a catalyst to produce the high temperatures required to create the methane, which produces fewer greenhouse gas emissions than other energy sources.
"We have good technology but lac k the materials," Mr Monobe said."The Thai-Japanese cooperation is a perfect match for the gasification project, which is a promising source of energy to replace fossil fuels."
The Thailand Institute of Scientific and Technological Research (TISTR)signed a deal on Monday with Japanese energy firm Kansai Corporation to develop the "gasification" technology which produces gas from wood chips.
Wood chips emit methane when heated to between 400 and 1,200C,said Wirachai Soontornrangsi, the TISTR researcher heading the project.
"If we can operate a gasification plant on a commercial scale, we will have another renewable source of fuel for vehicles and electricity-generatin g systems," Mr Wirachai said.
"It could help the country save bi g money on oil purchases."
Thailand has plenty of materials,such as wood chips and biomass, that can be used to create methane via such a process, but it lacked technical skills.
The TISTR has studied the technology for four years and now aims to produce methane commercially.
Kansai's chief engineer, Hiroyuki Monobe, said the company had researched and developed gasification technology for many years.
The technology uses a catalyst to produce the high temperatures required to create the methane, which produces fewer greenhouse gas emissions than other energy sources.
"We have good technology but lac k the materials," Mr Monobe said."The Thai-Japanese cooperation is a perfect match for the gasification project, which is a promising source of energy to replace fossil fuels."
Banpu plans to increase coal output by 12%
Banpu Plc will boost its coal output next year by 2010 in anticipation of higher demand as the global economy returns to growth.
New output will come mainly from its mines in Indonesia, and some from China. Overall output will reach 23 million tonnes in 2010, from an estimated 20.5 million this year, said Banpu president Chanin Vongkusolkit.
The upswing in output is planned in line with higher demand as the global economy recovers next year, he said.
"Global demand for coal from the second half onward may recover significantly to cope with a better global economy," he said yesterday.
The price of coal is expected to rise next year, he said. But it is unlikely to reach July 2008's peak of $170 per tonne.
Banpu expects this year's group revenue to be on par with 2008-56.8 billion baht, with a net profit of 9.22 billion - despite higher sales volumes driven by cheaper coal prices.
"Coal prices are sensitive to crude oil prices. Coal prices have been down since the price of crude collapsed last year,"he said.
Banpu recorded much stronger performance in the second quarter compared with the first, on the back of increased holdings in China, larger sales volumes and higher prices for its highergrade Indonesian coal.
Banpu's second-quarter consolidated profit totalled 3.98 billion baht, up 73%year-on-year, on sales of 12.93 billion, a 17% increase from a year earlier. Firsthalf profit doubled to 8.78 billion baht from 4.37 billion a year earlier.
The company plans next year to spend $20 million to expand the operational area of its Indominco mine in Indonesia,increasing output by 2 million tonnes.
The firm, however, has yet to complete its five-year investment plan, ending in 2013, which it had intended to finish early this year.
"We had planned to finish the plan early this year, but coal prices have been so volatile. We had to revise the plan to catch up with the economy. But I think we will probably complete it within this year," said Mr Chanin.
Banpu's previous investment plan ended in 2008, with the company spending $400 million more than the planned $660 million. The additional amount was used to finance the acquisition of coal mines in China.
The new business plan will focus on increasing the firm's overseas presence and positioning it as one of the coal mining industry's top players in Asia.Banpu will focus on coal and power in Indonesia, China and Australia, said Mr Chanin.
"Over the past 10 years, we have developed and improved our technology and human skills. We are confident that we are ready to be one of the leaders in Asia," he said.
Banpu is keen to acquire the Berau coal mine in Indonesia from a local operator. Bidding will open in September.
The firm has set a $208-million budget for this year, most which will be used to develop coal mines in Indonesia, such as Bontang, Bharinto and Indominco.
Shares of Banpu closed on the Stock Exchange of Thailand at 398 baht, down 18 baht, in trade worth 1.58 billion baht.
New output will come mainly from its mines in Indonesia, and some from China. Overall output will reach 23 million tonnes in 2010, from an estimated 20.5 million this year, said Banpu president Chanin Vongkusolkit.
The upswing in output is planned in line with higher demand as the global economy recovers next year, he said.
"Global demand for coal from the second half onward may recover significantly to cope with a better global economy," he said yesterday.
The price of coal is expected to rise next year, he said. But it is unlikely to reach July 2008's peak of $170 per tonne.
Banpu expects this year's group revenue to be on par with 2008-56.8 billion baht, with a net profit of 9.22 billion - despite higher sales volumes driven by cheaper coal prices.
"Coal prices are sensitive to crude oil prices. Coal prices have been down since the price of crude collapsed last year,"he said.
Banpu recorded much stronger performance in the second quarter compared with the first, on the back of increased holdings in China, larger sales volumes and higher prices for its highergrade Indonesian coal.
Banpu's second-quarter consolidated profit totalled 3.98 billion baht, up 73%year-on-year, on sales of 12.93 billion, a 17% increase from a year earlier. Firsthalf profit doubled to 8.78 billion baht from 4.37 billion a year earlier.
The company plans next year to spend $20 million to expand the operational area of its Indominco mine in Indonesia,increasing output by 2 million tonnes.
The firm, however, has yet to complete its five-year investment plan, ending in 2013, which it had intended to finish early this year.
"We had planned to finish the plan early this year, but coal prices have been so volatile. We had to revise the plan to catch up with the economy. But I think we will probably complete it within this year," said Mr Chanin.
Banpu's previous investment plan ended in 2008, with the company spending $400 million more than the planned $660 million. The additional amount was used to finance the acquisition of coal mines in China.
The new business plan will focus on increasing the firm's overseas presence and positioning it as one of the coal mining industry's top players in Asia.Banpu will focus on coal and power in Indonesia, China and Australia, said Mr Chanin.
"Over the past 10 years, we have developed and improved our technology and human skills. We are confident that we are ready to be one of the leaders in Asia," he said.
Banpu is keen to acquire the Berau coal mine in Indonesia from a local operator. Bidding will open in September.
The firm has set a $208-million budget for this year, most which will be used to develop coal mines in Indonesia, such as Bontang, Bharinto and Indominco.
Shares of Banpu closed on the Stock Exchange of Thailand at 398 baht, down 18 baht, in trade worth 1.58 billion baht.
ENERGY, AGRICULTURE EXPERTS WARN ON BIOFUELS PLAN
Plenty of proposals were floated at last week's "Alternative Energy Development" roundtable, alogn with a warning to the government that unless it tackled the issues raised, Thailand's ambitious goals for the biofuels industry would not be achieved.
Most of the proposals were centred on overcoming obstacles to increasing production of the biofuelsethanol and biodiese-obstacles that persist despite an abundant supply of raw materials.
On ethanol, Anusorn Sangnimnuan, president of Bangchak Petroleum, said it remians unclear how Thailand will be able to boost domestic ethanol consumption to 9 million litres per day by 2022, based on the current petrol consumption of 20 million litres a day. Doing so, he said, would require an ethanol content of more than 20 per cent. Though farmers would be pleased, oil retailers with their wn refineries would be discouraged by the drop in demand for refined oil. To express their unhappiness with such a situation, they could shelve a plan to increase the number of petrol stations that sell high-ethanol-content products, he said.
"E85 should be just an option, while E10 and E20 should be core products. In that case, about 4 million litres would be exported, potentially to japan, South Korea and China. But Thailand will need to do more marketing to persuade them to mix ethanol with their oil products, probably through joint investment in Thailand," he said, He also suggsted the Energy Ministry set a timetable for when it will abolish the sale of 91-and 95-octane petrol.
Citing the construction of an increasing number of tapioca-based ethanol plants, Anusorn voiced concern over pricing, as tapioca costs less than molasses-an alternation. He said it would be unfair if ethanol produced from both sources quoted a similar price.
On the subject of Thailand's goal of becoming an ethanol hub, Anusorn pointed out that ethanol export prices are now set by traders in Singapore. If they retain this role, Thailand would simply be a producer and reap no benefits from pricing, he said.
Anusorn also urged an amendment to the oil trading law, which currently bars retailers from exporting ethanol producers to export the product themselves, he said, as they do not have their own ports and tanks, as some retailers do.
"If we're to be the hub, we must have our own technology, while personnel must be improved. If we are good, we can export our expertise to help our neighbours," he said.
On biodiesel, Anusorn suggested the level of biodiesel conten in diesel be raised in line with any additional palm-oil supply, to assure farmers of income. As the country's palm plantation area is to be increased by 500,000 rai per year from 2008 to 2012 the planned compulsory ratio of 5-per-cent biodiesel could be moved forward from 2012, he said.
As plam-oil suuply is below expectations, he suggested establishing a minumum price in the initial period to encourage the establishment of more plantations.
Apichart Jongsakul, director-general of the Office of Agricultural Economics, urged the government to look closely at the value chain of palm oil. While tapioca starch can be used in the manufacturing of citric acid, and palm sterine-ther "hard" part of palm oil-can be used in cosmetics and weapon manufactruing, if such manufactruing activities occur it would increase demand for palm oil. This would benefit farmers more than a price guarantee, he said.
Wiwan Boonyaprateeprat, secretary-general of the Thai Oil Palm and Palm Oil Association, said palm growers are concerned about the coming free trade within Asean, which would allow imports and dampen domestic prices. As 90 per cent of Thai growers ar small operators, she said their plantation costs are higher than those of their counterparts in Malaysia.
She also expressed concern over price volatility resulting from high concentrations of palm-oil factories in some areas. Running at half capacity, the prowers. Some farmers were encouraged by the high price and cut their young palm kernels early. Low yields then pushed down the price sharply. When factoreis have to source palms from other provinces, they see an increase in operating costly than imports.
"A zoning system should be in place. A factory must be located in a designated area within which supply can be channelled directly to it," Wiwan said. Apichart noted that Thailand has the potential to become an ethanol hub, as Thailand is the world's largest tapioca exporter, though not the country with the largest output.
Thailand also has a significant share of the global sgar market.
Most of the proposals were centred on overcoming obstacles to increasing production of the biofuelsethanol and biodiese-obstacles that persist despite an abundant supply of raw materials.
On ethanol, Anusorn Sangnimnuan, president of Bangchak Petroleum, said it remians unclear how Thailand will be able to boost domestic ethanol consumption to 9 million litres per day by 2022, based on the current petrol consumption of 20 million litres a day. Doing so, he said, would require an ethanol content of more than 20 per cent. Though farmers would be pleased, oil retailers with their wn refineries would be discouraged by the drop in demand for refined oil. To express their unhappiness with such a situation, they could shelve a plan to increase the number of petrol stations that sell high-ethanol-content products, he said.
"E85 should be just an option, while E10 and E20 should be core products. In that case, about 4 million litres would be exported, potentially to japan, South Korea and China. But Thailand will need to do more marketing to persuade them to mix ethanol with their oil products, probably through joint investment in Thailand," he said, He also suggsted the Energy Ministry set a timetable for when it will abolish the sale of 91-and 95-octane petrol.
Citing the construction of an increasing number of tapioca-based ethanol plants, Anusorn voiced concern over pricing, as tapioca costs less than molasses-an alternation. He said it would be unfair if ethanol produced from both sources quoted a similar price.
On the subject of Thailand's goal of becoming an ethanol hub, Anusorn pointed out that ethanol export prices are now set by traders in Singapore. If they retain this role, Thailand would simply be a producer and reap no benefits from pricing, he said.
Anusorn also urged an amendment to the oil trading law, which currently bars retailers from exporting ethanol producers to export the product themselves, he said, as they do not have their own ports and tanks, as some retailers do.
"If we're to be the hub, we must have our own technology, while personnel must be improved. If we are good, we can export our expertise to help our neighbours," he said.
On biodiesel, Anusorn suggested the level of biodiesel conten in diesel be raised in line with any additional palm-oil supply, to assure farmers of income. As the country's palm plantation area is to be increased by 500,000 rai per year from 2008 to 2012 the planned compulsory ratio of 5-per-cent biodiesel could be moved forward from 2012, he said.
As plam-oil suuply is below expectations, he suggested establishing a minumum price in the initial period to encourage the establishment of more plantations.
Apichart Jongsakul, director-general of the Office of Agricultural Economics, urged the government to look closely at the value chain of palm oil. While tapioca starch can be used in the manufacturing of citric acid, and palm sterine-ther "hard" part of palm oil-can be used in cosmetics and weapon manufactruing, if such manufactruing activities occur it would increase demand for palm oil. This would benefit farmers more than a price guarantee, he said.
Wiwan Boonyaprateeprat, secretary-general of the Thai Oil Palm and Palm Oil Association, said palm growers are concerned about the coming free trade within Asean, which would allow imports and dampen domestic prices. As 90 per cent of Thai growers ar small operators, she said their plantation costs are higher than those of their counterparts in Malaysia.
She also expressed concern over price volatility resulting from high concentrations of palm-oil factories in some areas. Running at half capacity, the prowers. Some farmers were encouraged by the high price and cut their young palm kernels early. Low yields then pushed down the price sharply. When factoreis have to source palms from other provinces, they see an increase in operating costly than imports.
"A zoning system should be in place. A factory must be located in a designated area within which supply can be channelled directly to it," Wiwan said. Apichart noted that Thailand has the potential to become an ethanol hub, as Thailand is the world's largest tapioca exporter, though not the country with the largest output.
Thailand also has a significant share of the global sgar market.
B80m for biogas projects
The Energy Ministry has earmarked 80 million baht to invest in building biogas projects in 10 municipalities, according to Energy Minister Wannarat Channukul.
The ministry is following up on the success of pilot projects in five municipalities, in collaboration with the local administrations and universities, to build biogas plants that use methane from sludge and waste.
The pilot projects started in 2006 and have resulted in better waste management in communities as well as electricity cost savings. "Not only are the municipalities managing waste better, they also can produce fertilisers and use methane as a cooking gas in the community," Mr Wannarat said.
The selected municipalities produce 24,000 tonnes of waste per year out of a national total of 14 million. About 74% of the waste in the target municipalities goes to recycling plants or incinerators and the rest to landfills.
The 10 municipalities are expected to produce 635,100 cubic metres of biogas per year, equivalent to 300 tonnes of liquefied petroleum gas, with carbon emissions cut to 5,700 tonnes.
Local administrations will provide the sites and workers. Bids will be called for contractors by the end of this year and operations should start 12 to 18 months afterward.
The selected municipalities include Sam Ngam in Nakhon Pathom, Kok Kroud and Phimai in Nakhon Ratchasima, Wang Kapi in Uttaradit, Yan Ta Koa in Trang, Klang in Rayong, Isan in Buri Ram, Dej Udom in Ubon Ratchathani, Ban Klang in Lamphun and Singha Nakorn in Songkhla.
The ministry is following up on the success of pilot projects in five municipalities, in collaboration with the local administrations and universities, to build biogas plants that use methane from sludge and waste.
The pilot projects started in 2006 and have resulted in better waste management in communities as well as electricity cost savings. "Not only are the municipalities managing waste better, they also can produce fertilisers and use methane as a cooking gas in the community," Mr Wannarat said.
The selected municipalities produce 24,000 tonnes of waste per year out of a national total of 14 million. About 74% of the waste in the target municipalities goes to recycling plants or incinerators and the rest to landfills.
The 10 municipalities are expected to produce 635,100 cubic metres of biogas per year, equivalent to 300 tonnes of liquefied petroleum gas, with carbon emissions cut to 5,700 tonnes.
Local administrations will provide the sites and workers. Bids will be called for contractors by the end of this year and operations should start 12 to 18 months afterward.
The selected municipalities include Sam Ngam in Nakhon Pathom, Kok Kroud and Phimai in Nakhon Ratchasima, Wang Kapi in Uttaradit, Yan Ta Koa in Trang, Klang in Rayong, Isan in Buri Ram, Dej Udom in Ubon Ratchathani, Ban Klang in Lamphun and Singha Nakorn in Songkhla.
POWER TO THE PEOPLE
Mae Ya Noi is a small Karen hill tribe village about 80km south of Chiang Mai province. To get there, you wind your way to Doi Inthanon National Park, then veer left onto a dirt road. Through soaked rice paddies and dense cornfields, it takes another hour to arrive, crossing narrow pot-holed tracks made muddy by the monsoonal rain - a time when the village is cut off from outside if the rain comes down too fiercely.
Mae Ya Noi is not on the map, so it is not surprising that this village never had electricity.
Yet its remote location did not spare this village from change.
Ten months ago, a 23kW microhydropower plant was built in this village.Constructed by utilising the laws of gravity and the plentiful water supply, it now provides 100 households across three villages with the ability to do what most in Thailand take for granted - turn on a light whenever they want.
Monsit Anurakrimtarn, the village leader,believes it is just the start of things to come.
"With electricity, we can do so many things. For the first time, the temple and village school can function at night as well as during the day. Already we have started classes for older villagers who come after working in the fields. I think the electricity will widen everyone's perspective, teaching them about a world outside Mae Ya Noi."
Mae Ya Noi is not alone. Its very small power plant - producing less than 1MW of electricity - is one of more than 180 very small power plants - fuelled by clean energy like biomass, biogas, wind, and solar, and hydro like this one - dotting the landscape in villages and towns across Thailand. That number is expected to double in the next two years. This explosion of renewable-energy alternatives did not happen by accident. It had its genesis in a forward-thinking decision taken eight years ago.
In 2001, the UNDP Thailand joined forces with the Global Environment Facility and the Energy for Environment Foundation to tackle climate change by promoting the use of renewable energy.
The aimwas to show that Thailand could lessen its dependence on foreign oil and in the process substantially reduce its carbon emissions.
"When the project started, banks were not familiar with the renewable-energy industry. Now that we have shown how successful it can be, banks are actively searching out power plants to invest in,"said Piyasvasti Amranand, chairman of the advisory board of the Energy and Environment Foundation (E for E) and a former energy minister.
With the backing of the Thai government,which provided financial incentives to make the renewable-energy industry more competitive, the project has been a success.
By 2008,1,252MW of renewable-energy capacity - enough to supply households in Bangkok, Nonthaburi and Samut Prakan provinces - was operational throughout Thailand. This is an almost-fourfold increase from 1999, and the equivalent of 21% of the power provided by the Metropolitan Electricity Authority (MEA).
It's estimated that renewable-energy plants in Thailand have already reduced greenhouse gas emissions by 5 million tonnes annually. This is the same as taking every one of Thailand's 1.5 million cars off the road for a year.
Mr Piyasvasti believes it's just the beginning."With the existing technology,Thailand should be able to produce about 8,000MW worth of renewable power by 2020. If technology advances and we make greater use of wind and solar power, this figure could be much, much higher."
The small-scale local approach, epitomised by Mae Ya Noi, is having results. In eight years, Thailand has gone from being a renewable-power backwater to a leader in the region.
The Biomass Clearing House - a onestop shop set up by the project to share the latest renewable-energy information - has been so successful that it is pumping more investment into the sector, including wind, solar and hydro projects, through a new Green Energy Mechanism (GEM). It does this by bringing together Thailand's top companies that view investment in renewable energy as not just a savvy business decision, but also a way to showcase their social responsibilities. Like a diner in a restaurant, an investor is now presented with a menu of renewable-energy options.They can choose to put their money into whatever project fits their investment needs.
This is how the people of Mae Ya Noi came to have continuous electricity.Investors in the Green Energy Mechanism provided the capital for the hydropower plant's construction, the Department for Alternative Energy built it, and the local community maintains it and gains the benefit.
To an elderly Mae Ya Noi villager, it's a decision that has had profound effects.
"I'm very happy with the electricity. I can now read when I want and cook when I want. I don't want my life to change too much, but electricity is great."
Adam Sims is a communication officer at the United Nations Development Programme (UNDP). The article was written on a field trip taken last month.
How are you helping to reduce your carbon footprint?Share your eco-friendly activities or comment or disapproval by emailing outlook@bangkokpost.co.th.Write "Earth Alert" on the Subject line.
"'With electricity, we can do so many things'
Mae Ya Noi is not on the map, so it is not surprising that this village never had electricity.
Yet its remote location did not spare this village from change.
Ten months ago, a 23kW microhydropower plant was built in this village.Constructed by utilising the laws of gravity and the plentiful water supply, it now provides 100 households across three villages with the ability to do what most in Thailand take for granted - turn on a light whenever they want.
Monsit Anurakrimtarn, the village leader,believes it is just the start of things to come.
"With electricity, we can do so many things. For the first time, the temple and village school can function at night as well as during the day. Already we have started classes for older villagers who come after working in the fields. I think the electricity will widen everyone's perspective, teaching them about a world outside Mae Ya Noi."
Mae Ya Noi is not alone. Its very small power plant - producing less than 1MW of electricity - is one of more than 180 very small power plants - fuelled by clean energy like biomass, biogas, wind, and solar, and hydro like this one - dotting the landscape in villages and towns across Thailand. That number is expected to double in the next two years. This explosion of renewable-energy alternatives did not happen by accident. It had its genesis in a forward-thinking decision taken eight years ago.
In 2001, the UNDP Thailand joined forces with the Global Environment Facility and the Energy for Environment Foundation to tackle climate change by promoting the use of renewable energy.
The aimwas to show that Thailand could lessen its dependence on foreign oil and in the process substantially reduce its carbon emissions.
"When the project started, banks were not familiar with the renewable-energy industry. Now that we have shown how successful it can be, banks are actively searching out power plants to invest in,"said Piyasvasti Amranand, chairman of the advisory board of the Energy and Environment Foundation (E for E) and a former energy minister.
With the backing of the Thai government,which provided financial incentives to make the renewable-energy industry more competitive, the project has been a success.
By 2008,1,252MW of renewable-energy capacity - enough to supply households in Bangkok, Nonthaburi and Samut Prakan provinces - was operational throughout Thailand. This is an almost-fourfold increase from 1999, and the equivalent of 21% of the power provided by the Metropolitan Electricity Authority (MEA).
It's estimated that renewable-energy plants in Thailand have already reduced greenhouse gas emissions by 5 million tonnes annually. This is the same as taking every one of Thailand's 1.5 million cars off the road for a year.
Mr Piyasvasti believes it's just the beginning."With the existing technology,Thailand should be able to produce about 8,000MW worth of renewable power by 2020. If technology advances and we make greater use of wind and solar power, this figure could be much, much higher."
The small-scale local approach, epitomised by Mae Ya Noi, is having results. In eight years, Thailand has gone from being a renewable-power backwater to a leader in the region.
The Biomass Clearing House - a onestop shop set up by the project to share the latest renewable-energy information - has been so successful that it is pumping more investment into the sector, including wind, solar and hydro projects, through a new Green Energy Mechanism (GEM). It does this by bringing together Thailand's top companies that view investment in renewable energy as not just a savvy business decision, but also a way to showcase their social responsibilities. Like a diner in a restaurant, an investor is now presented with a menu of renewable-energy options.They can choose to put their money into whatever project fits their investment needs.
This is how the people of Mae Ya Noi came to have continuous electricity.Investors in the Green Energy Mechanism provided the capital for the hydropower plant's construction, the Department for Alternative Energy built it, and the local community maintains it and gains the benefit.
To an elderly Mae Ya Noi villager, it's a decision that has had profound effects.
"I'm very happy with the electricity. I can now read when I want and cook when I want. I don't want my life to change too much, but electricity is great."
Adam Sims is a communication officer at the United Nations Development Programme (UNDP). The article was written on a field trip taken last month.
How are you helping to reduce your carbon footprint?Share your eco-friendly activities or comment or disapproval by emailing outlook@bangkokpost.co.th.Write "Earth Alert" on the Subject line.
"'With electricity, we can do so many things'
Asia Green to sell more coal
Asia Green Energy Plc (AGE) aims to increase its coal sales by 20% to 1 million tonnes this year, given the global economic rebound and a price gap that could encourage industrial operators to switch from fuel oil to coal for energy,said assistant managing director Somyos Thitisuriyarux.
But the SET-listed coal importer and distributor said yesterday that in the worst case its turnover could slip by 10% this year from 2.35 billion baht in 2008, with net profit sliding in line with coal prices down from 123 million baht last year.
In the first six months of 2009, AGE's revenue increased 15% year-on-year to one billion baht as coal from Indonesian mines rose 14.6% by volume to 414,072 tonnes. But net profit sank from 68 million baht to 39 million as the margin shrank 8% year-on-year.
Coal prices have stabilised between US$60 and $70 per tonne since the past quarter, or 2,600 baht as quoted locally,while crude has risen steadily to $70,said Mr Somyos. With fuel oil now at 13-14 baht a litre, it is 40% more expensive than coal, he said.
"Last year,7% of 30,000 boilers at industrial plants nationwide were modified from fuel oil to coal to save about 30%. As the gap has widened, we expect more and more industrialists to switch to coal this year," he said.
AGE's customers are up to 520 from 500 at the end of last year, with the energy sector climbing to contribute 24%of sales volume, while food provides 29%, textiles 23% and paper 14%.
"We have remained on track to boost sales from 840,000 tonnes in 2008 to 1 million tonnes this year. Many sectors,including energy, have placed more orders but several were made for restocking," said Mr Somyos.
Although the global economic picture in the second half is unclear, without unexpected incidents the economy could steadily improve both locally and globally.
But AGE's sales revenue for 2009 will not be as good as projected earlier, when 20% growth was considered possible,he said. Coal prices are expected to stay between 2,500 and 2,800 baht this year,compared with 2,800 to 3,200 baht last year, due to the sluggish world economy in the first half.
"After getting the financial results of the first half, we are now anticipating that revenue could vary by 10% plus or minus from the 2008 figure," said Mr Somyos.
Next month, AGE will start operating its fourth warehouse in Si Racha in Chon Buri, with storage capacity of 10,000 tonnes of coal. The new facility will contribute to revenue from the fourth quarter onward. Currently,14% of its customers are in the eastern region, he said.
Shares of AGE closed yesterday at 6.30 baht, unchanged, in trade worth 1.72 million baht.
But the SET-listed coal importer and distributor said yesterday that in the worst case its turnover could slip by 10% this year from 2.35 billion baht in 2008, with net profit sliding in line with coal prices down from 123 million baht last year.
In the first six months of 2009, AGE's revenue increased 15% year-on-year to one billion baht as coal from Indonesian mines rose 14.6% by volume to 414,072 tonnes. But net profit sank from 68 million baht to 39 million as the margin shrank 8% year-on-year.
Coal prices have stabilised between US$60 and $70 per tonne since the past quarter, or 2,600 baht as quoted locally,while crude has risen steadily to $70,said Mr Somyos. With fuel oil now at 13-14 baht a litre, it is 40% more expensive than coal, he said.
"Last year,7% of 30,000 boilers at industrial plants nationwide were modified from fuel oil to coal to save about 30%. As the gap has widened, we expect more and more industrialists to switch to coal this year," he said.
AGE's customers are up to 520 from 500 at the end of last year, with the energy sector climbing to contribute 24%of sales volume, while food provides 29%, textiles 23% and paper 14%.
"We have remained on track to boost sales from 840,000 tonnes in 2008 to 1 million tonnes this year. Many sectors,including energy, have placed more orders but several were made for restocking," said Mr Somyos.
Although the global economic picture in the second half is unclear, without unexpected incidents the economy could steadily improve both locally and globally.
But AGE's sales revenue for 2009 will not be as good as projected earlier, when 20% growth was considered possible,he said. Coal prices are expected to stay between 2,500 and 2,800 baht this year,compared with 2,800 to 3,200 baht last year, due to the sluggish world economy in the first half.
"After getting the financial results of the first half, we are now anticipating that revenue could vary by 10% plus or minus from the 2008 figure," said Mr Somyos.
Next month, AGE will start operating its fourth warehouse in Si Racha in Chon Buri, with storage capacity of 10,000 tonnes of coal. The new facility will contribute to revenue from the fourth quarter onward. Currently,14% of its customers are in the eastern region, he said.
Shares of AGE closed yesterday at 6.30 baht, unchanged, in trade worth 1.72 million baht.
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