Banpu Power Plc (BPP), the subsidiary of Banpu Plc, has signed a share purchase agreement to invest ¥1.143 billion (US$10.5 million) in Global Engineering Co, the leading power retailer in Fukuoka, Japan.
Chief executive Sutee Sukruan said this investment is being made through Banpu Renewable Singapore Pte Ltd (BRS), BPP's wholly owned subsidiary.
"This investment is equivalent to 19.9% of Global, representing a further expansion of BPP's engagement in virtual power plants [VPP] and energy trading business as a platform for efficient future power consumption," he said.
Global is providing services to 2,000 industrial customers and participating in the VPP platform in Japan.
BPP and Global will also work together in Southeast Asia to provide demand management solutions being deployed at a rapid pace following the growth of renewable investments in the region.
This ¥1.14-billion budget is the first batch of BPP's 2020 investment as part of its roadmap on energy technology and cleaner energy over the next decade.
The VPP is a decentralised network of medium-scale power-generating units such as wind farms, solar parks and combined heat and power units, as well as flexible power consumers and storage systems.
The interconnected units are dispatched through the central control room of the VPP, but remain independent in their operations and ownership.
Parent Banpu entered the energy technologies segment a couple of years ago by acquiring a shared ownership in many companies and establishing new subsidiaries.
Banpu North America Corporation acquired a gas operation position in the Barnett Shale Basin in Texas in the US, with a transaction value of $770 million (23 billion baht) in December 2019.
The transaction is expected to be completed in the second quarter of 2020.
Moreover, Banpu has already set up Banpu Next Co as the flagship business in the clean energy portfolio for renewable resources, gas-fired power plants, energy technologies, smart city solutions, electric vehicles, energy storage systems and energy solution services.
Banpu chief executive Somruedee Chaimongkol said Banpu Next will bring together existing subsidiaries Banpu Infinergy Co and BPP in an amalgamated company.
"Banpu Next Co is expected to complete its establishment in February and has two shareholders, as Banpu and BPP have a 50% stake each," Mrs Somruedee said.
She said the clean energy business set a goal over the next five years to increase its ebitda (earnings before interest, taxes, depreciation and amortisation) to 50% of the group's total from 25% now.
While Banpu's core ebitda for coal mining and trading stands at 70% now, the goal is to reduce the figure to below 50% in five years.