Source: Institute for Energy Economics and Financial Analysis
Thai energy conglomerate PTT Pcl is boosting investments in electricity generation, particularly renewables, given what it says is a “highly uncertain” outlook for oil over the next year.
The country’s biggest company, which is involved in everything from oil exploration and power generation to gasoline and coffee retailing, revised its 2019 capital spending plan in late June, Chief Executive Officer Chansin Treenuchagron said in an email interview. Most of the 33.2 billion baht ($1.1 billion) of extra budget will be spent on electricity projects, he said.
Buffeted by trade wars, geopolitical tension and the North American shale boom, oil faces an uncertain outlook over the next year, according to Chansin. PTT’s pivot toward renewables comes after a unit of the majority state-owned company spent $4.2 billion earlier this year buying electricity producer Glow Energy Pcl, which generates most of its power from gas and coal.
“Under the volatile environment, PTT focuses more on clean energy as well as infrastructure,” Chansin said in the interview last week. “The plan aims to support the subsidiaries’ business expansion in electricity business and renewable energy.”
Thailand is moving toward producing more electricity from renewable sources. The government has a target to have about 27% of its total power generating capacity from such sources by 2037. The country produced 8.7% of its power from non-hydro renewables last year, according to Ministry of Energy data.
The economics of going green are competitive with other power sources. Producing electricity from solar in Thailand currently costs between $62 to $111 per megawatt-hour, compared with $69 to $88 for coal and $90 to $96 for natural gas, according to BloombergNEF research.