Year 2009

 February 2009

Eastern Sugar postpones power plant

Power demand drop shelves biomass plan intact

Business

By YUTHANA PRAIWAN

The Eastern Sugar Group, Thailand's ninth-largest sugar producer, has suspended its investment in a 2.4-billion-baht electricity generating project as power demand has plunged in line with the economy.

ES president and chief executive Khunying Natthika Angubolkul said the company had previously planned to expand the capacity of its biomass power generation to 20 megawatts from eight MW.

Construction on the power plant was due to start last year and be completed for start-up in 2010.

"We used to project crude priced at US$200 a barrel, with cassava and sugarcane crops expanding drastically to serve the growth of alternative fuels. However, the global recession has turned the situation upside down," she said.

"Last year showed negative signs for the economy. Since we had learned the hard lesson from the Asia financial crisis in 1997, we decided to halt it immediately."

Operated by ES's power arm, ES Power, the plant was intended to integrate with the group's sugar mills, maximising the benefits from sugar production by-products, which would be used in the energy business.

ES has invested more than two billion baht over several years on biogas, ethanol, organic fertilisers and small power generation.

An ethanol factory, whose construction was too advanced to suspend, will operate from March with a daily capacity of 150,000 litres.

She said the government is to blame for the failed development of the company's ethanol business by not delivering a clear and consistent policy for energy usage as well as alternative fuels.

"The government coerced us [the sugar mills] to invest in ethanol as they wanted to see ethanol materialise at that time but now they just leave us in despair," she said.

According to the Department of Energy Development and Efficiency (DEDE), Thailand has a total production capacity of 1.57 million litres of ethanol from 11 licensees. But current utilisation is only 1.2 million litres a day, in turn nearly 300,000 litres more than the demand of 930,000 litres.

Demand for ethanol is expected to rise to 1.2 million litres a day by the end of this year. But if another seven ethanol licensees stick to their production plans, the country's total capacity will rise to 3.92 million litres by the end of this year.

By Bangkok Post

February 3, 2009

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