Bangchak Petroleum is looking for sites to set up two more 30-megawatt solar farms as part of its drive to increase the earnings contribution of green business to 30 per cent by 2013.
"Diversifying into the green energy business will not only help reduce risk from volatile global oil prices but also increase gross profit margins," president Anusorn Sangnimnuan said yesterday.
If renewable energy is to amount to 30 per cent of total earnings before interest, tax, depreciation and amortisation, as projected in its five-year investment plan, the company should have at least three solar power plants, he said.
The company is constructing its first 30MW solar plant in Ayutthaya at a cost of Bt3 billion, with completion scheduled for next year.
Locations for future solar plants should be adjacent to the substations of the Electricity Generating Authority of Thailand or the Provincial Electricity Authority, he added.
The company last year disclosed its five-year plan to invest about Bt5 billion in the renewable energy business, which it calls "the green business", including the construction of solar power plants, upgrading of oil products to the Euro IV standard and expansion of production capacity for biodiesel B100.
Bangchak has allocated Bt2 billion for the renewable-energy business this year.
"The operating cost of a solar power plant is now US$2 [Bt66.50] per watt, down from $3. This makes the business more attractive to invest in for future growth," Anusorn said.
Return on investment from renewable-energy projects should reach at least 15 per cent, he said.
Bangchak has not yet finalised the deals to acquire stakes in existing ethanol plants, as rising ethanol prices have complicated negotiations. It cannot therefore forecast when the deals will be concluded, he added.
