BPP acquiring Japanese solar project with PPA

BPP acquiring Japanese solar project with PPA

Solar panels are seen at the site of Banpu's Ozenosato power plant in Japan. A Banpu subsidiary, BPP, is expected to seal an M&A deal to acquire a solar farm project in Japan.
Solar panels are seen at the site of Banpu's Ozenosato power plant in Japan. A Banpu subsidiary, BPP, is expected to seal an M&A deal to acquire a solar farm project in Japan.

Banpu Power Plc (BPP), the electricity arm of Thailand's largest coal miner and trader, Banpu Plc, is expected to seal a merger and acquisition (M&A) with a solar farm project in Japan next month, says Worawut Leenanon, chief executive and managing director.

He declined to give the name of the company that is about to be acquired, saying the two sides are expected to finalise the deal in November.

The acquisition target has a power-purchasing agreement (PPA) with a power-buying firm, but construction and operation have not yet been completed, Mr Worawut said.

The M&A deal is part of BPP's goal to increase power generation to total 4,300 megawatts by 2025. Of the total, some 20%, or around 860MW, is projected to be from renewable power, he said.

BPP has a current power generation capacity of 2,686MW from 26 projects. Some 2,057MW from 14 projects have already started operations, while the remaining 629MW from 12 projects are under development, due to start operations by 2020.

But Mr Worawut said he expects a slight slowdown in operations in the second half of this year due to the scheduled maintenance shutdown of the Hongsa coal-fired power plant in Laos and the BLCP coal-fired power plant in Map Ta Phut.

Hongsa and BLCP are BPP's biggest power plants in terms of capacity, but the shutdowns for maintenance and repairs are unlikely to affect overall revenue because the combined power capacity from the three power plants in China, which run at maximum capacity, should offset the shutdowns.

Other projects that start partial operations and could help offset the shutdown are the Shanxi Lu Guang coal-fired power plant in China and the new solar farm operations in Japan.

He said the business plan over the rest of the year will focus on both fossil-based and renewable projects in other Asean countries such as Vietnam and Indonesia.

Mr Worawut said BPP is preparing to bid for licences with a combined capacity under Thailand's renewable Small Power Producer (SPP) with a hybrid-firm PPA.

The Energy Regulatory Commission (ERC) has opened bidding for SPP hybrid-firm PPA this week.

The pilot project aims to shift PPAs from non-firm PPAs to become firm PPAs after opening to renewables for more than a decade.

Under the firm PPA, power-generating companies must commit to producing a certain amount of power for the state utilities' grid.

On Monday alone, up to 25 investors were bidding for licences with a combined capacity of 541MW, well above the quota of 300MW, said ERC secretary-general Narupat Amornkosit.

BPP shares closed yesterday on the SET at 31.75 baht, up 1.75 baht, in trade worth 970 million baht.

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