Higher prices for wood chips are causing TPC Power Holding Plc (TPCH), a renewable power generation arm of Thai Polycons Plc, to carefully manage their usage for its biomass-fired power plants in the deep South.
Wood chips are agricultural leftovers and there is usually a surplus during a cropping season.
Strict control of wood chip stocks is needed during the off-season, while a stockpile is accumulated during the cropping season, said Cherdsak Wattanavijitkul, managing director of TPCH.
A shift to careful wood chip management came as the company saw its net profit decline by 38% during the first half of this year to 109 million baht, down from 179 million baht year-on-year.
Mr Cherdsak said the company also plans to use various kinds of crops as fuel for power plants during the off-season to avoid high wood chip prices.
TPCH is conducting a study and running a pilot project to grow "energy crops" such as bamboo and napier grass for fuel.
Napier grass, also known as elephant grass for its great height, is a type of fast-growing plant suitable for use as a biomass fuel.
"We are trying to grow bamboo and napier grass on an industrial scale and conducting research into appropriate management of fuels," said Mr Cherdsak.
TPCH is operating 10 biomass-fired power plants, with a total capacity of 107 megawatts. Five of them, with a combined capacity of 47MW, are in the deep South.
The company is developing another three power projects: two biomass-based facilities in the southernmost provinces of Yala and Pattani, and a waste-to-energy power plant in Nonthaburi.
All three of them, with installed capacity of 122MW, are expected to go online in the fourth quarter of this year or the first quarter of next year.
The company estimates the amount of electricity sold to the Provincial Electricity Authority will grow by 60% to 740 million kilowatts-hour (KWh), up from 460KWh last year.
The amount is expected to increase to 897KWh next year.
Mr Cherdsak said TPCH has also qualified for an Energy for All renewable scheme auction.
Energy for All promotes co-investment between companies and communities in biomass and biogas-based power generation projects.
The company is proposing 10 projects, with 36MW in total capacity, for the bidding. Eight of them use biomass fuels while another two use biogas.
The results of the auction are expected to be announced on Sept 23.
TPCH intends to increase its power generation capacity to 250MW by 2025, up from 107MW at present.