Thai Solar Energy Plc (TSE), an MAI-listed subsidiary of Channel 3, says the potential for renewable power plants in Thailand has become unfavourable after energy policymakers have put off plans to buy power generated from renewables for five years.
Moreover, policymakers announced new renewable power generators will have the same feed-in tariff as fossil-fuel power generators, 2.40 baht per kilowatt-hour, because their production cost is equal to or lower than their traditional peers.
Renewable power generators' adder rate (the rate state utilities pay operators) was 5-8 baht.
Cathleen Maleenont, TSE's chairman and chief executive, said the country has no potential to operate a renewable power plant and sell electricity to state utilities because profits will decline under the new rate.
Some renewable investors operate under a power purchase agreement with the Electricity Generating Authority of Thailand and Metropolitan Electricity Authority under a business-to-government (B2G) model.
But Ms Cathleen said selling power in the business-to-business (B2B) segment remains of interest to renewable investors because both parties can negotiate on prices and terms.
"We can invest in renewable power plants in the country for B2B purposes, but there is less business opportunity in the B2G segment," she said. "For our overseas outlook, TSE is very keen on operating renewable power plants because other governments still offer a high adder rate."
In a related development, TSE submitted a letter to the Stock Exchange of Thailand informing the bourse that TSE sold up to 40% of shares in total paid-up capital in TSE Overseas Group Co (TSEO), which is TSE's wholly owned subsidiary, to MAI-listed auto-parts maker Fortune Parts Industry Plc (FPI).
FPI will own 74 million shares in TSEO at a par value of 10 baht, totalling a transaction value of 1.695 billion baht.
Ms Cathleen said TSEO is in charge of eight solar power plants across Japan with a total capacity of 176.72 megawatts.
Five power plants with a combined capacity of 6.99MW have already secured revenue with a feed-in tariff of ¥36 yen (10.41 baht) per kilowatt-hour to sell electricity to Japan's state utilities on a 20-year contract.
The Jyoso solar power plant has 1.25MW and is scheduled to begin operations in the second quarter this year. Two large power plants in Ishikawa and Miyagi are expected to start operations in 2019 and 2022, respectively.
Ms Cathleen said the partnership with FPI is another milestone for investment and expansion in other renewable power plants in Japan. TSE is interested in developing biomass or biogas power plants in that country, she said.
Funds from the share sale will be used to pay off TSE's financial debt from the Onikoube solar power plant with 154.98MW in Miyagi, said Ms Cathleen, which should be among the top three largest solar power plants in Japan once it is completed.