Four companies win IPP bidding
Losing firms suggest Japanese funding to blame for torpedoing their chances
Four companies belonging either to Japan's sole wholesale power utility, Electric Power Development, or to J-Power, Glow Energy and Advance Agro have won contracts to build Bt102 billion worth of power plants.The four are Siam Energy, Power Generation Supply, Gheco-One and National Power Supply. Combined capacity will be 4,400 megawatts, and power will start being supplied from two coal-fired and two natural-gas plants from 2012-14. The winners were among 20 companies and consortiums submitting bids.
The capacity will be above the original target of 3,200MW, because the offered price is low. Also, the Energy Ministry wants to ensure that the supply will not be disrupted if any of the two coal-fired power plants cannot start up on schedule, said Energy Policy and Planning Office director-general Viraphol Jirapraditkul.
"The Electricity Generating Authority of Thailand (Egat) also faces a one-year delay in generating power from its 800MW coal-fired plant, because it has not found a location yet," Viraphol said.
The plant was originally planned to start supplying power in 2015.
Glow Energy's Gheco-One will operate a coal-fired plant in Rayong with a capacity of 660MW. National Power of Advance Agro will locate its 560MW coal-fired plant in Chachoengsao province.
Siam Energy's 1,600MW natural-gas plant will also be in Chachoengsao, while Power Generation Supply's 1,600MW gas plant will be in Saraburi. All power will be sold to Egat for Bt2.135 to Bt2.648 per unit.
Energy Minister Piyasvasti Amranand yesterday said all of the bid winners had to be approved by the National Environmental Board by next September 1, or else they could not sign the power-purchase agreement. If any are denied approval, the next runner-up will be selected.
He also said Ratchaburi Electricity Generating Holding, which was disqualified from the first round, still stood a chance if it was defined as a non-state enterprise. If its purchase price is lower than the winners, Ratchaburi could then be a winner.
Gheco-One, a 65/35 joint venture between Glow Energy and Hemaraj Land and Development, will spend Bt40 billion.
Glow CEO Peter Termote said: "We are very pleased to have been selected as the first IPP [independent power producer] in this round of IPP bidding. We are confident that this expansion will assist in diversifying the country's fuel supply, providing more reliable electricity at a cheaper price. Thais will benefit from our low tariff, especially with current oil prices being so high. Fuel diversification has now become a necessity for the country.
"The company is confident that the project will gain support and acceptance from the Thai people at large. Environmentally, the plant is expected to be one of the cleanest coal-fired power plants in the world. The emissions will not only be significantly below the World Bank guidelines and Thai regulations, but the plant will meet the statutory limits required for coal-fired plants of even the most stringent international regulations, such as those in the European Union.
Visit Akaravinak, president of losing bidder Electricity Generating, said he was not upset about the loss. The firm quoted a power price of Bt2.70 per unit.
"We cannot compete with them. Their quoted price was extremely low, probably due to the lavish funding from the Japanese investor who wants to invest abroad. It's a pity, though, that the state did not give a Thai company a chance," he noted.
Somkiat Hatthakoson of Thai Oil, which failed to win a contract for its natural-gas plant, also said that without price cutting, Thai Oil would have stood a chance.