Mitr Phol, Asia's largest sugar producer, will invest 3.7 billion baht in its new renewable energy projects in Thailand and expand the group's power business to neighbouring countries, starting with a biomass plant China.
The group has also targeted development of other types of power plants including solar and co-generation, said Suwat Kamolpanus, managing director of Mitr Phol's power business.
"We are in the process of submitting the EIA (environmental impact assessment) for Kalasin Bio-Energy Co's 57-megawatt project that will cost 2.38 billion baht," he said.
The company will also spend 1.3 billion baht on a 32-MW expansion phase for the Dan Chang Bio-Energy Co. Construction of these two projects is expected to start in the next two months.
Currently, Dan Chang Bio produces 65 MW while Mitr Phol's Phu Khieo Bio-Energy Co generates 75 MW. The power business is projected to generate 2 billion baht in revenue this year with another 1.5 billion early next year when the two new projects are operational, he said.
Meanwhile, Mitr Phol has expanded its power business to China by building a 32-MW biomass plant at its sugar plant in Funan on the southern mainland. Through direct and indirect ownerships, Mitr Phol holds 90% in the 1.3-billion-baht project, the first power plant in China that produces electricity from bagasse, a sugarcane crushing byproduct, as the others are mostly coal-fired units and wind farms.
The company has signed a 15-year contract to supply power to the Chinese government and is hoping to sell about 70,000 tonnes of carbon credits a year in addition to the 100,000 tonnes each from Dan Chang and Phu Khieo.
"We are confident in the potential of growing sugar in China, while the country has policies that are very supportive of renewable energy," said Mr Suwat.
The Chinese government early last year increased the adder tariff for biomass producers from 0.25 yuan (1.25 baht) to 0.35 yuan (1.7 baht) per kilowatt/hour for 15 years. The Thai government offers only 0.30 baht a unit for eight years.
Mr Suwat said that including the plant in Funan, Mitr Phol operated sugar mills in five locations in China, all with the opportunity to add bio-energy projects.
"We are also interested in developing renewable projects in Laos, where Mitr Phol currently operates a sugar mill, and Cambodia, where it has a sugarcane plantation," he said. "If government policies are favourable for renewable energy, we will be there."
Mitr Phol submitted a proposal to develop a 2-MW solar plant in Suphan Buri. It is interested in partners in a small co-generation power project.