Speakers include: Hans Jürgen Sauter, VP Middle East and Africa, Nextracker Inc. Dinesh Thakare, Head – Design & Engineering (RT), CleanMax Elena García Ortiz, Project Manager MEA, UL Solutions Finn Chow, Sales Manager APAC Marketing, Antaisolar Moderator: Ritesh Pothan, Director BD – APAC & AMEA, DroneBase
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The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything included therein. The following presentation may include information related to investments made and key commercial terms thereof, including future returns. Such information cannot be relied upon as a guide to the future performance of such investments. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Scatec ASA or any company within the Scatec Group. This presentation contains statements regarding the future in connection with the Scatec Group’s growth initiatives, profit figures, outlook, strategies and objectives as well as forward looking statements and any such information or forward-looking statements regarding the future and/or the Scatec Group’s expectations are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.
Scatec is a leading renewable energy solutions provider, accelerating access to reliable and affordable clean energy in high growth markets. As a long-term player, we develop, build, own and operate renewable energy plants, with 3.5 GW of installed capacity across four continents today. We are targeting 15 GW of renewable capacity to be in operation or under construction by the end of 2025, delivered by our 600 passionate employees who are driven by a common vision of ‘Improving our Future’. Scatec is headquartered in Oslo, Norway and listed on the Oslo Stock Exchange under the ticker symbol ‘SCATC.
Emerging markets leading the way In addition to the environmental perspective, demand for renewables is also driven by economical and geopolitical factors. The relative competitiveness of renewables has strengthened over time compared to conventional energy and is now the most cost-efficient source of energy in many locations and particularly in emerging economies. Authorities in many countries are also seeing the benefit of not relying on imported fossil fuels given price volatility and geopolitical unrest. Emerging economies will be fundamental in this transition, in which accelerating demand for new renewable energy will be driven by high economic growth, rapidly increasing populations, and improving living standards, in combination with initiatives to reduce the use of fossil fuels.
Capturing the full project value Over time we have developed a business model which allows us to capture the total value of a renewable project while retaining control over health and safety matters and managing the potential effects on people, communities, and the environment. Our business model involves the development, construction, ownership, and operation of renewable energy plants in emerging economies and the sale of power predominantly under long-term power purchase agreements (PPAs). Our approach is to offer the most cost-efficient solution for each project which could either be a single technology or a combination of several integrated renewables technologies.
During 2021, we expanded our team internationally by 187 full-time employees, increasing the total number of employees to 622. With their 51 different nationalities, our employees represent true diversity. In order to meet our growth targets, we implemented a new People and Organisation strategy during 2021 that reflects our aims for growth in our core markets. We are focusing on strengthening our organisation, developing our people, and reinforcing our culture. We will build on our heritage and create a robust organisation with solid leaders who are ready to take on the challenge of taking Scatec to the next level. The strategy also sets out key activities for achieving our goals in respect of diversity, equity, inclusion, and belonging (DEIB). We will continue to recruit business development resources in our core markets to capitalise on new project opportunities early on. We are strengthening our employer brand to ensure long-term access to talent and offer unique career opportunities by promoting growth and development. When we recruit, we look for top candidates who have both a cultural and a business understanding of the markets where we operate. We do this to reduce risk and accelerate growth.
Our integrated operations in emerging economies and renewable technologies mean that we are exposed to a variety of risks. Our ability to manage these risks is fundamental to our success and over time has developed into a key competitive advantage for Scatec. We capitalise on our experience of complex environments and risk management systems in order to de-risk an opportunity and move it forward.
Group – Proportionate Financials 2021 proportionate revenues were NOK 4,615 million, up from NOK 2,844 million in 2020. The increase reflects the acquisition of SN Power in January 2021 and new solar plants in Ukraine and Argentina which started operation during the year. With a larger portfolio of power plants in operation, both revenues and EBITDA increased in Power Production, while decreasing in the Development & Construction segment. This change in segment mix resulted in a higher EBITDA margin for the Group compared with the previous year. The increase in operating expenses and depreciation compared with 2020 is mainly driven by the new power plants in operation, strengthened project development and corporate functions. Scatec’s proportionate share of cash flow to equity was NOK 1,284 million in 2021, up from NOK 324 million in 2020. This is mainly explained by the factors above in addition to NOK 397 million from refinancing of assets in the Philippines. Power Production Power Production revenues increased to NOK 4,176 million (1,708) in 2021, while EBITDA increased by 48% to NOK 2,949 million (1,404). Installed capacity was 3,355 MW at year-end and full year production on proportionate basis reached 3,823 GWh, up from 1,602 GWh in 2020. The increase in production volumes and revenues is mainly driven by the acquisition of SN Power.
Clean energy in a sustainable way Scatec is a leading renewable energy solution provider, accelerating access to reliable and affordable clean energy in high growth markets. As a long- term player, Scatec develops, builds, owns and operates solar, wind and hydropower projects and storage solutions. Sustainability is an integral part of our organisation and embedded in all our business units and across our value chain. We have dedicated sustainability resources both at the project and corporate level involved in all project phases for long term approach and impact.
ESG performance and targets Scatec reports on key performance indicators and sets targets across material topics. The table below covers key ESG results and performance from the full year 2021.
Diversity, equity, inclusion and belonging are key business imperatives for Scatec. We embrace these aspects in our practices, policies and procedures, including hiring processes, performance and rewards, learning and development programmes and initiatives.
Cash flow to equity: is a measure that seeks to estimate value creation in terms of the Group’s ability to generate funds for equity investments in new power plant projects and/or for shareholder dividends over time. Management believes that the cash flow to equity measure provides increased understanding of the Group’s ability to create funds from its investments. The measure is defined as EBITDA less net interest expense, normalised loan repayments and normalised income tax payments, plus any proceeds from refinancing. The definition excludes changes in net working capital, investing activities and fair value adjustment of first-time recognition of joint venture investments. Normalised loan repayments are calculated as the annual repayment divided by four quarters for each calendar year. However, loan repayments are normally made bi-annually. Loan repayments will vary from year to year as the payment plan is based on a sculpted annuity. Net interest expense is here defined as interest income less interest expenses, excluding shareholder loan interest expenses, non-recurring fees and accretion expenses on asset retirement obligations. Normalised income tax payment is calculated as operating profit (EBIT) less normalised net interest expense multiplied with the nominal tax rate of the jurisdiction where the profit is taxed.
The following presentation may include information related to investments made and key commercial terms thereof, including future returns. Such information cannot be relied upon as a guide to the future performance of such investments. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Scatec ASA or any company within the Scatec Group. This presentation contains statements regarding the future in connection with the Scatec Group’s growth initiatives, profit figures, outlook, strategies and objectives as well as forward looking statements and any such information or forward-looking statements regarding the future and/or the Scatec Group’s expectations are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.
Power Production – Philippines Short-term impact by seasonality – long-term asset values increasing • Q2’22 production 20% above 5-year average as expected • Production in 2H’22 expected to exceed contractual volumes, benefitting from continued high spot prices • Q3’22 production expected 25% above the five-year average and 45% above the same period last year • 560 – 640 GWh (100% basis) / 280-320 GWh (proportionate basis) • Favourable hydrology and shift in product mix • Long-term asset values increasing – capturing higher energy prices over time with a premium for flexibility.
Development & Construction The Development & Construction segment derives its revenues from the sale of development rights and construction services delivered to power plant companies where Scatec has economic interests. Power Production The power plants produce electricity for sale primarily under long term power purchase agreements (PPAs), with state owned utilities or corporate off-takers, or under government-based feed-in tariff schemes. The weighted average remaining PPA duration for power plants in operation is 17 years. The electricity produced from the power plants in the Philippines is sold on bilateral contracts and in the spot market under a renewable operating license, and as ancillary services.
Power Production Second quarter operations were stable with high availability of the power plants. Power production reached 9161) GWh in the second quarter compared to 860 GWh in the same quarter last year. Revenues increased by NOK 140 million to NOK 1,015 million in the second quarter mainly driven by significantly higher power sales in the Philippines, a new power plant in Argentina and foreign currency effects, partly offset by lower revenues in Ukraine after the Russian invasion. In the Philippines, production for the quarter ended 20% above the 5-year average explained by improved hydrology and reขallocation of production volumes from ancillary services to spot sales to optimise revenues However, total power production ended below the contracted sales volumes, as expected, and power was therefore purchased in the market. This led to cost of sales of NOK 198 million, an increase of NOK 131 million compared to the same period last year. Total gross profit for the quarter ended at NOK 810 million, broadly in line with the same period last year. Foreign currency effects, NOK 13 million of non-recurring costs and operating expenses for new power plants in Ukraine and Argentina, led to an increase in operating expenses of NOK 44 million compared to the same quarter last year.
EU Taxonomy update 100 percent of Scatec’s revenues, operating expenses and investments are derived from Taxonomy eligible activities. In 2021, third-party assessments were carried out to evaluate the Company’s alignment to the EU Taxonomy. The assessment of the “Do no Significant Harm” (DNSH) principle of the EU Taxonomy Annex 1 Technical screening criteria confirmed that all six hydropower assets are aligned with the Taxonomy DNSH criteria, but lack a detailed site-specific climate risk assessment. Two site-specific climate risk assessments were completed by end of second quarter 2022 and the remaining four are now under development. The two completed site assessments did not identify any major climate risks related to safety or power production. The remaining assessments will be finalised over the next few months.
During second quarter 2022, Scatec conducted Environmental and Social Impact Assessments (ESIAs) and due diligence or baseline studies for projects located in South Africa, Brazil, India, Cameroon, Rwanda and the Philippines. All assessments were conducted in close dialogue with project and financing partners for all new projects under development with a certain level of maturity. All projects assessed during the second quarter are Category B projects according to the IFC Performance Standards, with potential limited adverse social or environmental impact. The GHG emissions avoided from the renewable power projects where Scatec has operational control amounted to 0.4 million tonnes, broadly in line with first quarter 2022, as no projects reached commercial operation date during second quarter 2022. First half of the year is also consistent with the same period last year.
Basis of preparation These condensed interim consolidated financial statements are prepared in accordance with recognition, measurement and presentation principles consistent with International Financing Reporting Standards as adopted by the European Union (“IFRS”) for interim reporting under International Accounting Standard (“IAS”) 34 Interim Financial Reporting. These condensed interim consolidated financial statements are unaudited. These condensed interim consolidated financial statements are condensed and do not include all of the information and notes required by IFRS for a complete set of consolidated financial statements. These condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements. The accounting policies adopted in the preparation of the condensed interim consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for 2021, except for revenue recognition policy applied in the Philippines. Refer to Note 10 Change in accounting policy for further details.
Hectic construction and repair of roads and bridges are visible in large parts of the Indian border state of Arunachal Pradesh, which witnessed military action during the brief war between India and China from October 20 to November 20, 1962. Six decades after the end of the war, and despite countless rounds of negotiations between the two neighbors to resolve the border dispute, tensions continue to simmer. They have triggered occasional clashes. The schemes to upgrade overland connectivity infrastructure are part of a larger project being implemented by the Indian government to improve infrastructure and enhance surveillance along the 3,488 kilometers-long disputed border with China. China claims 90,000 square kilometers in India’s frontier region of the northeast, roughly including the whole of Arunachal Pradesh. There have been frequent reports of intrusions by the People’s Liberation Army into territory under Indian control. There have been allegations too of China surreptitiously grabbing chunks of territory in Arunachal Pradesh. Currently, there are six zones considered “disputed” and four that are “sensitive” spread across the state.
Among the projects currently being executed by the Indian government in the border states is the construction of 73 roads of operational significance for better access to the Line of Actual Control (LAC). The government has informed Parliament that 2,094 kilometers of roads were constructed along the border at a cost of around $1.8 billion over the past five years.
Enjoying this article? Click here to subscribe for full access. Just $5 a month. Plans have also been firmed up to set up “vibrant villages” to prevent residents from relocating from border zones to areas nearer the cities. Around 185 border villages were depopulated in Uttarakahand in the central sector of the LAC, prompting the government to unveil measures to check the migration. According to a government official, residents have been found to relocate from the border mostly in the twin districts of East Kameng and Dibang Valley. More troops are being deployed in the regions considered vulnerable to Chinese intrusions. Model border outposts are being created and surveillance mounted in the remote zones through UAVs. The Indian army has also begun efforts to organize itself into Integrated Battle Groups, which are bigger brigade formations deploying a mix of infantry, artillery, tanks, air defense, etc., near the border.
These projects are in response to similar activities by China in its Tibet Autonomous Region (TAR), including an extensive rail network and roads spanning over 60,000 kilometers. There are reports suggesting that military and air bases have been upgraded along the entire border region.ADVERTISEMENT Here’s a peek into some projects that are currently being implemented in Arunachal Pradesh.
Since the outbreak of COVID-19, health cooperation and solidarity in fighting the pandemic has been essential in mitigating the crisis. In turn, cooperation on health issues has strengthened overall diplomatic support between nations. After the breakout of COVID-19 in Wuhan, China faced a crucial crisis at home and also pressure abroad, in the form of accusations that it mishandled the pandemic’s early stages. Some politicians in the United States even raised a conspiracy theory over the origins of the virus. Then-U.S. President Donald Trump repeatedly accused China of being responsible for spreading the virus; he even used the expression “Chinese Virus” in public addresses, which created the impression of China as a threat to the world. This confrontational approach led to a significant deterioration in diplomatic relations between the U.S. and China. By contrast, Beijing sought to use vaccine diplomacy to highlight its role as a responsible actor on global health issues. China has practiced health and vaccine diplomacy around the world, including in the Middle East and North Africa.
In 2020, China sent doctors, nurses and researchers to hold conferences with doctors in Abu Dhabi. In August of that year, China established a laboratory in Baghdad, Iraq, with support of Chinese experts to help the country to confirm cases during the start of COVID-19 outbreak. In addition, China provided test kits, medical masks, personal protection suits, and other anti-COVID-19 supplies to Yemen. It also provided test kits and ventilators to both Palestine and Algeria. Moreover, China also localized vaccine production with Egypt, Algeria, the UAE, Bahrain, and Turkey, while Iran and Palestine both relied exclusively on Chinese vaccines in fighting the pandemic.
In Asia and Africa, most of the countries who received the vaccine were already participants in the Belt and Road Initiative (BRI). Through its vaccine diplomacy, China thus highlighted and reinforced the importance of the BRI in countries strategically important to Beijing. For instance, in Egypt, where the Suez Canal is an important strategic crossroad to Europe, in addition to vaccine donations, China also built a factory to manufacture Chinese vaccines in Egypt. This will allow Egyptian partners to gain influence and increase their exports to other African nations.ADVERTISEMENT However, the effectiveness and safety of Chinese vaccines has remained a crucial concern across the MENA region. There is a perception in many countries that Chinese products are of low quality; this has affected public trust levels toward the efficacy of the vaccines from Sinopharm and Sinovac. In Egypt, the populace has been skeptical of Chinese vaccines, while showing great trust in Western vaccines such as AstraZeneca. In part this is due to the apparent transparency of scientific research in the West in contrast to more opaque methods in China. In 2021, Saudi Arabia announced specific requirements for visitors to take at least one dose of the Pfizer, AstraZeneca, Moderna, or Johnson and Johnson vaccines in order to enter the country – or at least two booster shots of Sinovac and Sinopharm. Despite the wide use of Chinese vaccines across the region by many countries, positive opinions of the Chinese vaccines declined once alternative options were available from Western countries.
Despite the fact that the U.S. entered the vaccine diplomacy race later, Chinese vaccine diplomacy has faced a big challenge due to the spread of the highly transmissible Omicron subvariants BA.4 and BA.5. Chinese vaccines were less effective against the new subvariant, even if they were used for a booster shot. Subsequently, Sinopharm and Sinovac exported a total of 6.78 million doses in April, down 97 percent from the peak in September 2021. Western vaccines such as Pfizer and Moderna are based on newer mRNA technology, which is not yet available in China, and both are more effective against the virus than the Chinese vaccine in single doses.
The U.S.-led world order has witnessed a big shift in terms of the role of China as a rising power. Indeed, the COVID-19 situation accelerated the competition between two powers. The future world order will no longer be defined by a single power; therefore one single country will find it difficult to lead this order. China has emerged from the COVID-19 pandemic as an influential actor; vaccine diplomacy has been effective in upgrading China’s relations with many poorer countries. This situation puts China in a favorable position to pursue global leadership, but the degree of its involvement will matter in the long term. At least theoretically, there should be no natural conflict between the United States and China in the Middle East. Both share an interest in stability, and both are deeply invested in the status quo. The Chinese approach in the MENA region is more focused on economic and development integration, rather than challenging the interest of other nations. China is a leading regional power in terms of infrastructure and technologies. The vast growth in the Chinese presence in many areas, such as infrastructure, technology, clean energy, and finance, has contributed to boosting its foreign direct investment and provided employment opportunities in developing countries, which the U.S. and Western powers have failed to achieve.
China enjoys a strong friendship with most of most of the countries in the MENA region. China’s position in the region of course serves its interests – to maintain a stable domestic environment by focusing on economic cooperation – but overall China’s engagement with the region has been successful due to the declining U.S. role in the region, which has happened gradually over time. While the two powers’ competition includes the race to distribute vaccines, Chinese diplomacy will maintain its focus on prioritizing its interests without becoming involving in regional issues that might lead to a conflict with the United States. Ultimately, neither the U.S. nor China has been able to be very successful in ending the COVID-19 pandemic. Their policies at home and globally prioritize their different values and political systems. Subsequently, the pandemic has brought their competition to a sharper point.
FOREWORD Throughout 2020, UN Thailand repositioned rapidly to support public health and social-economic responses to the COVID-19 pandemic while at the same time ensuring continued progress towards the Sustainable Development Goals. In the collaborative work of all UN agencies, the interconnected domains of People, Planet, Prosperity, Peace and Partnership established the priorities for sustainable development and the mandate to Leave No One Behind in the recovery. Progress towards the 2030 Agenda and Thailand’s development goals is founded on the UN’s long-term partnerships with Government, the private sector, academia, and civil society and youth groups. This whole-of-society approach leverages UN networks and technical expertise to support the strengths, knowledge and skills of every sector. I would like to take the opportunity to thank all our partners for their collaboration over this uniquely challenging year.
KEY DEVELOPMENTS IN THE COUNTRY Like many countries around the globe, the key development situation in Thailand was overshadowed by the COVID-19 pandemic, with the fiscal and technical response initiated to enable economic recovery and steer the country to stay on course to achieve the SDGs by 2030. In January 2020, the country became the second in the world to confirm a COVID-19 infection. Subsequently, Thailand rapidly implemented a national response, successfully flattening the epidemic curve while maintaining a low case fatality rate. Thailand’s relatively strong healthcare delivery system and the near-universal health insurance coverage have contributed to effectively containing the spread of the virus, with a relatively low number of confirmed cases and deaths, ranking it among the top-ten most prepared countries to deal with the coronavirus and first among upper-middle-income countries1 . Government’s effective response to the pandemic included rapid and accurate case detection, isolation, treatment and tracing close contacts of cases in quarantine, and effective communication with the public. More than four decades of investment in primary health care resulted in an excellent health response with hundreds of technical experts trained in disease outbreak investigation and 1 million village volunteers supporting contact tracing in communities. There is significant trust between the community and the health system across the country. Thailand’s near universal health coverage has also ensured that no Thai has endured financial hardship for COVID-19-related health services. However, the outbreak response is more challenging in some marginalized populations including non-Thais and migrants, due to difficulties 1 Based on the 2019 Global Health Security Index. in accessing documentation, language barriers and distrust among host communities. The RTG addressed some of these gaps by issuing a Cabinet Resolution on 29 December 2020 that supported the regularization of irregular migrant workers, opening access to health services such as COVID-19 check-ups and purchase of the Migrant Health Insurance Scheme.
The UN Office for South-South Cooperation has worked closely with the Ministry of Foreign Affairs and the Thailand International Cooperation Agency and benefitted from the secondment of staff from the Thailand International Cooperation Agency in support of South-South Cooperation. Thailand with ESCAP and UNOSSC brought together heads of national development and technical cooperation agencies to share experiences and exchange ideas at the 3rd Asia-Pacific Directors-General Forum for South-South and Triangular Cooperation held in November 2020. Thailand officially become a member of the Partnership for Action on Green Economy (PAGE) in 2020 through collaboration between the RTG and UNIDO. UN PAGE agencies including ILO, UNDP, UNEP and UNIDO in collaboration with the NESDC have secured US$400,000 from Germany’s Green Recovery Fund to support Thailand’s bio-circular-green recovery efforts.
Key Lessons The UNCT also took note of the lessons, accompanying strategies on leveraging partnerships and the UN convening role, which was particularly critical during the response to the COVID-19 pandemic. Collaborating closely and developing successful partnerships is key to maximizing development results. The UN leverages its partnerships with Government, civil society, the private sector and academia to advance development gains. For example, the UN is leveraging its partnership with the private sector through the Global Compact Network Thailand to increase participation of all sectors in sustainable national development and innovative solutions to development challenges. In another example, the SDGs Youth Panel, an informal feedback mechanism from youth to Heads of Agencies, is enabling the meaningful inclusion of youth’s voices in decision-making.
Financial Reporting In 2020, 891 UN personnel in Thailand across 21 UN entities delivered programmes at an overall envelope of US$75.2 million, of which US$15.2 million was allocated to the COVID-19 health response with US$60 million directed to “building back better”. An estimated US$2 million was redirected from existing programming to address the COVID-19 response and cover impact assessments; promote community resilience and food security; reduce the vulnerabilities of at-risk communities including people living with HIV and AIDS, youth, persons with disabilities, the LGBTI community and others; and sustain social cohesion. These figures are estimates self-reported by UN entities in Thailand, and are not audited financial data. This is aligned with UNPAF’s vision in advancing sustainable, people-centred, and equitable development for all people in Thailand.
In Thailand and worldwide, 2020 was an unprecedented year on many levels. While there were many challenges, there were also many achievements and opportunities to build upon for 2021. First, managing the COVID-19 response and resilience recovery will be a top priority. Another important focus will be localizing the SDGs in Thailand. The UN Sustainable Development Cooperation Framework, which will be developed by the UNCT in partnership with Government, will be one of the top priorities and act as the main instrument for the planning and implementation of UN development activities. Thailand’s membership marks its 75th anniversary in the UN and an opportunity to reflect on the successes and challenges for future partnerships.
The first ASEAN (Association of Southeast Asian Nations) member state to institute the equivalent of a feed-in tariff (FiT), more solar power capacity has been installed in Thailand than in any other of the 10 ASEAN members. That’s a diverse group that, along with Thailand, ranges from Cambodia, Laos and Myanmar, Indonesia and the Philippines to Brunei, Vietnam, Malaysia and Singapore. Thailand’s solar and renewable energy potential far exceeds what’s been installed to date, however. Thailand has the one of the largest, and the most diverse, bases of renewable energy resources of any ASEAN nation, according to national and international assessments, which means there’s plenty of room for growth. Political instability in the wake of the military takeover of the government in 2014, a shifting, uncertain energy policy environment and a large surplus of natural gas and coal-fired power generation capacity installed during a period of large-scale utility grid investment and rapid expansion all cloud the outlook for solar and renewable energy growth and development , however. So do environmental concerns, most prominently air quality that seasonally reaches unhealthy, very unhealthy or even worse levels of particulate matter 2.5 (PM2.5) in Bangkok and other Thai cities.
Utility-scale solar power farms account for nearly all the solar power capacity that has been installed in Thailand to date — well above 90 percent according to one study. Similar to an FiT, a “solar adder” fueled the rapid growth. Authorities abolished the solar adder in 2015 amid concerns about over-investment and over-expansion that would leave the government in a fiscal hole, as it did in Spain earlier this decade. Government review of projects was put on hold, which has resulted in a backlog of solar power projects awaiting approval. In the meantime, Thailand’s Ministry of Energy shifted its focus to developing a policy framework and approving solar and renewable power projects that demonstrate grid parity. The Thai government and power industry have also experimented with using small-scale solar, as well as hydro and biomass, to electrify off-grid communities and improve lives and livelihoods in agricultural and remote areas. Poorly conceived and executed, and poorly coordinated with other, much larger natural gas generation and grid expansion initiatives, a small, initial solar home systems-based rural electrification program failed to much media attention back in the early 2000’s, Noah Kittner, senior researcher in the Group for Sustainability and Technology at ETH Zürich and a former visiting researcher at Thailand’s Chulalongkorn University’s Energy Research Institute, recounted in an interview. Memory of the initial program’s failure persisted nonetheless, leaving solar with a bad reputation in Thailand. Conditions didn’t really start changing for the better until the fourth quarter of 2017 when the Energy Ministry ended a decades-long restriction prohibiting households and commercial buildings from selling electricity generated by on-site solar power and other distributed energy systems to Thailand’s two state-run distribution utilities.
Can growth of solar and other environmentally friendly energy resources make a substantial contribution to alleviating poverty and realizing Thailand’s sustainable development, rural and national electrification, international greenhouse gas reduction and climate change goals all at the same time? “It really depends on policy objectives and designs,” Sopitsuda Tongsopit, Energy Policy Analyst at University of California Davis’ Policy Institute for Energy, Environment, and the Economy, its Institute of Transportation Studies and a partner at the Creagy Company Ltd., said in an interview. Tongsopit also led the Thailand Solar PV Roadmap Initiative, a project that Kittner contributed to, as well.
“Thailand in the past has experimented with targeting low-income customer groups for off-grid solar, but the failure of this program was well-documented in the literature and has not yet been learned by politicians. During the Yingluck (Shinawatra) administration (ended in 2014), there was also a solar farm program announced to increase income for agricultural cooperatives, but the design of the program did not result in income redistribution as the policy intended,” Tongsopit told Solar Magazine.
Thailand Energy Strategy 4.0 That said, residential and commercial-industrial solar power systems are becoming more common in Thailand, Kittner pointed out. More broadly, straightforward economics, more specifically ongoing declines in the installed costs of both solar energy and advanced battery-based energy storage systems, is leading Thailand’s energy authorities to refocus on implementing policies, rules and regulations that can spur growth of distributed solar and other local, renewable energy resources. “Thailand’s 4.0 Energy Strategy is trying to promote electric vehicles and solar. I would pay attention to energy storage technologies, as well,” Kittner said. “I think we will see more focus on distributed applications in urban areas,” he continued. “Local self-consumption is becoming more and more attractive in Thailand. Grid power demand peaks at around 2-3 PM, which coincides with peak solar power generation…Solar could provide more on-demand generation to meet those peak loads.”
SOLAR FLOATING The first pilot project for private sector of the group company
ORGANIZATIONAL STRUCTURE AND OPERATION OF THE GROUP OF COMPANIES POLICY AND BUSINESS OVERVIEW Thai Solar Energy Public Company Limited, its subsidiaries and jointly controlled entities (collectively, the “Group of Company”) are committed to being the leader in the power plant business from renewable energy. By focusing on doing business by choosing the right technology. Provide good and stable returns in the long term. including providing efficient power plant construction and equipment procurement (Engineering Procurement and Construction: EPC), In addition the Group of Companies has studied and expanded the business of generating electricity from solar energy in the form of solar farm, solar rooftop and solar floating, including more forms of renewable energy such as biomass energy, biogas energy, wind energy, waste energy, etc., as well as seeking investment opportunities abroad to become a leading company in renewable energy business in Thailand and Asia.
BIOMASS POWER PLANT The production process of a biomass power plant consists of 7 main systems: 1) A fuel preparation system consisting of scales, piles, fuel shredders, belt drive system, a fuel storage silo, and a fuel feeding system to the furnace 2) A fuel furnace system consisting of the furnace body, which is designed to be sloped in order to convey fuel into the combustion chamber and slag kiln 3) A steam generator system or boiler, consisting of high heat resistant metal pipes, which is coiled back and forth in order to exchange heat to water in the pipe to become steam 4) Power generation systems such as steam turbines and generator 5) Treatment and filtration system for hot gas that leaves the chimney, including hot gas treatment system and a gas chimney 6) The water production system, used in the production process, consisting of the cooling water system and the wastewater treatment system from the production process and 7) the ash collection system for disposal or used to make fertilizer for farmers.
MONITORING PROCESS For the power plant operation controlling process, the Group has CCTV and operational control systems that have been developed in a modern manner to easily and accurately control the process with centralized control in real-time through the internet network for controlling, commanding, and monitoring the operation of power plants in various points. There is a team to control, supervise, solve problems, repair and maintain the power plants of the Group consisting of experienced internal or external experts who have passed strict selection from the Group to ensure that any problems can be solved quickly within the specified time according to the standards and the power plant is kept in good condition, ready for use, and able to distribute electricity normally
COMMERCIALLY OPERATED POWER PLANTS As of the end 2021, TSE Group engages in the administration of and investments in local and international renewable-energy businesses has 35 projects. Divided into 33 projects in Thailand with a total capacity of 145.2 MW and 2 projects in Japan, with a total capacity of 146.5 MW, representing a total production capacity of 291.7 MW A total of 34 commercial power distribution projects are divided into 33 projects in Thailand, 1 project in Japan, representing a total production capacity of 158.7 MW Details are as follows:
OVERVIEW OF ELECTRICAL SYSTEMS IN THAILAND The current Thai power system is a centralized system which is, having a power plant and a large transmission system covering the whole country. However, in the future, there will be a distribution of electricity generation and an electrical system control center to the community, as well as an increase in the proportion of electricity generation from renewable energy. Therefore, the advancement of the electricity industry in the era of changing technology must support the arrival of renewable energy, which is to create flexibility of the electrical system. The power plant must be flexible and be able to operate quickly. The power transmission and distribution system must be developed into a Smart Grid system that works through a remote monitor and is able to retrieve information and commands from the control center to resolve emergency situations immediately. The integration of data from outside agencies is needed for the prediction or forecast of future electricity demand. Renewable energy that still has limitations on instability should be developed in the form of a combination of renewable energy and the main fuel (RE Hybrid Firm) to reduce volatility and be able to produce electricity within the specified contract period, such as solar cells with hydroelectric power plants, wind power plants and fuel cells, and biomass fuel with solar cells. These combinations will become an important alternative for the development of renewable energy in the future, along with the development of energy storage systems to help stabilize electricity distribution from renewable energy. EGAT has piloted three energy storage battery installation projects, namely; the project in Mueang District, Mae Hong Son Province, with a capacity of 4 MW; the Chai Badan high power station in Lopburi Province, with a capacity of 21 MW per hour; and the Bamnet Narong High Voltage Power Station in Chaiyaphum Province, with a capacity of 16 MW-hours.
ELECTRICITY CONSUMPTION Electricity demand and electricity generation (Net Generation): projected according to the 4.5% GDP growth rate in 2021 as reported by the Office of the National Economic and Social Development Council (NESDB) on June 5, 2020, and the short-term electricity demand forecast for the year 2020-2024 according to the resolution of the electricity demand analysis working group on August 13, 2020, as well as the assessment of the trend of impact on electricity consumption from the current situation of the COVID-19 pandemic in January – April 2021, it is expected that the total electricity generation and purchase will be 60,685 million units, increasing by 1,775 million units or 3.01% from the previous forecast (September – December 2020), which was at 58,910 million units
ISSUE MANAGEMENT IN THE BUSINESS VALUE CHAIN The Group recognizes the importance of stakeholder participation and believes that solid relationships built on trust, as well as stakeholder comments and suggestions, will influence the organization’s ability to develop and grow sustainably. Furthermore, stakeholder management will assist the Company in effectively responding to stakeholders’ requests and reducing the danger of damage to its image and economic chances.
THE BOARD OF DIRECTORS’ RESPONSIBILITY FOR FINANCIAL REPORTING The Board of Directors is responsible for the preparation of consolidated and separate financial statements of Thai Solar Energy Public Company Limited and its subsidiaries and jointly controlled entity, including the financial information presented in this annual report. The aforementioned financial statements are prepared in accordance with Thai Financial Reporting Standards, using careful judgment and the best estimations. Important information is adequately and transparently disclosed in the notes to financial statements for the Company’s shareholders and investors. The Board is also responsible for internal control activities that the Board deemed necessary for the preparation of overall and specific financial statements that do not contain any information that is significantly contradictory to the fact, either by fraudulent intention or by mistake.
The U.S. solar industry grew 43% and installed a record 19.2 gigawatts (GWdc) of capacity in 2020, according to the ‘U.S. Solar Market Insight 2020 Year-in-Review’report, released today by Wood Mackenzie and the Solar Energy Industries Association (SEIA).
For the second year in a row, solar led all technologies in new electric-generating capacity added, accounting for 43%. According to Wood Mackenzie’s 10-year forecast, the U.S. solar industry will install a cumulative 324 GWdc of new capacity to reach a total of 419 GWdc over the next decade. “After a slowdown in Q2 due to the pandemic, the solar industry innovated and came roaring back to continue our trajectory as America’s leading source of new energy,” said SEIA president and CEO Abigail Ross Hopper. “The forecast shows that by 2030, the equivalent of one in eight American homes will have solar, but we still have a long way to go if we want to reach our goals in the Solar+ Decade. This report makes it clear that smart policies work. The action we take now will determine the pace of our growth and whether we use solar to fuel our economy and meet this climate moment.”
The 8 GWdc of new installations in Q4 2020 marks the largest quarter in U.S. solar history. For perspective, the U.S. solar market added 7.5 GWdc of new capacity in all of 2015. New capacity additions in 2020 represent a 43% increase from 2019 and breaks the U.S. solar market’s previous record of 15.1 GWdc set in 2016. This is the first time Wood Mackenzie has released a long-term forecast as part of the U.S. Solar Market Insight report series. By 2030, Wood Mackenzie is forecasting that the total operating solar fleet will more than quadruple. “The recent two-year extension of the investment tax credit (ITC) will drive greater solar adoption through 2025,” said Michelle Davis, Wood Mackenzie Senior Analyst. “Compelling economics for distributed and utility-scale solar along with decarbonization commitments from numerous stakeholders will result in a landmark installation rate of over 50 GWdc by the end of the decade.”
California, Texas and Florida are the top three states for annual solar capacity additions for the second straight year, and Virginia joins them as a fourth state installing over 1 GWdc of solar PV. In 2020, 27 states installed over 100 MWdc of new solar capacity, a new record.