Year 2009
February 2009
Egco sees bigger role for two ageing power plants
BY YUTHANA PRAIWAN
Egco Group Plc, Thailand's second largest private power producer, is preparing to renew the power production licences for its ageing Rayong and Khanom power plants in order to sustain its revenue.
The company has operated the plants via two subsidiaries, Rayong Electricity Generating Co (Regco) and Khanom Electricity Generating Co (Kegco) for more than 20 years ago under licences granted by the Electricity Generating Authority of Thailand.
Egco president Vinit Tangnoi said the two plants accounted for around half of its total capacity of 3,967 megawatts.
The licence for the 1,232 MW Regco will expire in 2014, while that of the 824 MW Kegco will end in 2016.
"We have to study hard to see whether to ask for licences for another 10 years to operate the old plants or build new ones on the existing sites. We also have to offer an attractive option for Egat while we should see a worthwhile return on operation," said Mr Vinit.
He said negotiations for licence renewals should be finalised within this year.
"However, if the deal fails we still own that land and the locations are pretty good. They have potential for future development, though it would affect revenue in the short term."
Egco's total revenue last year dropped by 8% to 10.71 billion baht, and net profit also fell 18% to 6.92 billion, due mainly to lower rates under its power purchasing contract with Egat.
Egco has also decided to drop the plan to develop power production from Phuket municipality's garbage, a venture it had studied with PTT Plc and UK-based Wegco.
"The project is not commercially viable due to its expensive production cost and poor sludge separation system," said Mr Vinit. "But it still has a chance if the Phuket municipal administration still wants to develop the project. It can improve the system and we can talk again."
As well, a wind power generation project in Nakhon Si Thammarat has been deemed not viable due to inconsistent of wind speeds.
"Due to the inconsistency at the site, it could operate the generator only 2.5 months a year. We will resume it once the new technology could help fixing problem," he said.
Egco had earmarked a capital investment this year of 1.6 billion baht for the Nam Theun 2 hydroelectric plant in Laos, a 920-MW project set to start operations in mid-December this year.
Egco shares closed yesterday on the Stock Exchange of Thailand at 70 baht, up one baht, in trade worth 17.08 million baht.
By
Bangkok Post
February 25, 2009
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