Bangchak beams solar aspirations.

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Bangchak beams solar aspirations
Plans to spend B50bn to reach 500 MW
Published: 27/05/2011 at 12:00 AM
Bangkok Post: Newspaper section: Business  

Bangchak Petroleum Plc plans to spend about 50 billion baht to increase its solar power capacity by four times to 500 megawatts.

President Anusorn Sangnimnuan said clean solar power would play a major role in electricity generation and the cost of solar cells should decline on eager demand from other countries.

He didn't reveal when the majority state-owned oil refiner and retailer could achieve the plan, as expansion will rest squarely on the new government's programmes.

Bangchak has three licences for a combined 118 MW for its solar farm. The first 38-MW licence for Bang Pa-in, Ayutthaya, and should be operational in October. A second 32-MW installation and third one of 48 MW will be built by the middle of this year and next year respectively.

Although the Energy Ministry closed licensing to solar power investors after a combined 500 MW in 2009, Dr Anusorn believes the government is likely to call a new round of bids soon, given growing pressure from higher oil prices, lower production cost for solar cells, and the government's recent decision to delay building a nuclear power plant.

Oil prices may rise to US$120 per barrel this year, he said.

Bangchak and other energy players want to encourage the new government to increase solar power production to 2,500 MW from its existing 500 MW.

"Thailand has more potential in solar power than wind, so we need to focus on this technology," said Dr Anusorn.

The first solar project worth 5 billion baht is 70% complete. The second and third cost a combined 10 billion and will seek partnerships and contractors.

Dr Anusorn said the company estimated its earnings before interest, tax, depreciation and amortisation (EBITDA) from solar power of 9 billion baht if it expands to 500 MW.

EBITDA from the refinery and oil retailing each year totals about 6 billion baht, subject to fluctuating global oil prices. The company is keen to diversify its business, he said.

BCP increased its forecast for Dubai crude this year to $120 per barrel from $80 earlier this year.

BCP shares closed yesterday on the Stock Exchange of Thailand at 21.20 baht, down 10 satang, in trade worth 156.59 million baht.