Industry Overview and Growth Potential · 1 day ago · 4 Electricity consumption is gradually...
Transcript of Industry Overview and Growth Potential · 1 day ago · 4 Electricity consumption is gradually...
Industry Overview and Growth Potential
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Disclaimer
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Company Core Competitive Advantages
Financial Highlights
Company OverviewI
IV
III
Table of Contents
Industry Overview and Growth Potential II
Key TakeawaysV
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Electricity consumption is gradually growing amid the country’s instability
Electricity Consumption, Resilience Growth Throughout Country Crisis
Source : Global Energy Statistical 2018
Industry Overview and Growth Potential
World Electricity Consumption
Thailand Electricity Consumption VS SET index
Unit: tWh
Unit: tWh
-
5,000
10,000
15,000
20,000
25,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0
100
200
300
400
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
400
800
1,200
1,600
2,000
- Red Shirt took
over the
Ratchaprasong
- State of
Emergency
announced by
Thai Gov’t
- Bomb at
Ratchaprasong
- Major
flooding
around
Bangkok
Metropolitan
Area
- Flooding attack
the Southern
part of
Thailand
- Year of GDP
Curtailment
- Anti-Gov’t by
PDRC
- Bangkok
Shutdown
- Military
Government
in action
- Coup d’etat
- High market
volatility due
to domestic
unprecedente
d negative
factor
- Certain
market
volatility with
improved
market
condition
- Uncertainty
from interest
rate hike by
FED
- A crisis in the
sub-prime
mortgage
market in USA
(Hamburger
Crisis)
- Red Shirt start
protesting and
stormed a hotel
in Pattaya that
was the venue
for ASEAN
summit
SET Index
5
Paris Agreement: Around 88% of the world have ratified or acceded to the Agreement. Thailand government has ratified the agreement.
EV Revolution: EV trend is coming with 1) Fossil fuel vehicle bans 2) Renowned automakers are making promises on EV
Announced end
sales of gas and
diesel cars by 2040
Announced end
sales of gas and
diesel cars by 2040
Parliament voted
through motion to
end all gas and
diesel car by 2025Plans to sell only 100% EV or hybrid/electric onward
Source : Paris Agreement, Climate change, Vox
Global and Domestic Trend to Support Renewable Energy
World Zero Carbon: Government around the world is collaborating to aim for net zero carbon by 2050.
Sample
Approach from
Countries and
States:Target Date: 2030
Status: In law
Target Date: 2050
Status: In law
Target Date: 2050
Status: In law
Target Date: 2045
Status: Executive Order
Ratified
Signed
Not Signed/Withdrawing
Norway France California United Kingdom
FranceUnited Kingdom Netherlands
Industry Overview and Growth Potential
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Growth: 17.90%(2012-2020)
Growth: 12.00%(2018-2030)
Growth: 19.80%(2010-2035)
Growth: 10.50%(2019-2030)
Cambodia Laos
Myanmar Vietnam
Electricity Consumption Growth Rate
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International and Domestic Trend to promote and support Renewable Energy
Paris Agreement
Set a global goal to reach zero carbon emissions in the second half of the century
Constitution of the Kingdom of
ThailandReformation Plan of the Country PDP 2018 Proposal
Thailand
✓ Section 72(5): To promote energy
conservation and cost-effective use
of energy, as well as to develop and
support the production and use of
alternative energy to enhance
sustainable energy security.
✓ Thus, current and ongoing
government policies and actions
shall comply with this Section.
✓ Set up biomass quality and pricing
standard and develop market
✓ Initiate database of biomass
producer
✓ Study/develop technology to
transform biomass feedstock for
value added
✓ Encourage firm contract for biomass
power plant PPA
✓ Recently, Ministry of Energy has
informed that there could be
adjustment to the PDP 2018 where
renewable portion could increase
even further.
✓ A professor from Thailand’s leading
institution has proposed an opinion
of increasing the renewable portion
up to 40%.
Global and domestic trend are in the same direction to promote and support “Renewable Energy”
Industry Overview and Growth Potential
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Constitution of the Kingdom of Thailand, 20 years National Strategy, Country
Reformation and Government Commitment to Support Renewable Energy
According to Constitution of the Kingdom of Thailand, Section 6 Number 5: Thailand will develop and support the production and
usage of renewable energy for the security and sustainability of the future of Thai energy
• Government will develop
and support the creation of
Bio-Circular Green
Economy. Allowing
communities and farmers
to partake in the creation
of power and electricity.
• Develop a middle platform
for buying and selling of
electricity (P2P).
• Decrease CO2 emission
• Solve PM 2.5 problem at
the source
• Support systematic,
hygienic, and proper
management of Municipal
Solid Waste (MSW).
• Develop and support the
growth of fuel crops in
Thai agriculture.
• Develop contract farming
for fuel crops.
✓ Increase in megawatts
from Biomass and Biogas
power plants.
✓ ACE can sell left over
capacity directly to user.
✓ Biomass power plant is the
solution to PM 2.5
problem by buying
agricultural waste from
farmers and therefore
prevents the farmers from
burning the waste in their
fields.
✓ ACE is a model and leader
in the operation of MSW
power plant in Thailand
with the ability to process
80% moisture content
waste as well as being the
only developer and
operator of the zero
discharge MSW power
plants in Thailand.
✓ Official support from
governments mean more
fuel in the market for ACE.
Source : Constitution of the Kingdom of Thailand
1 2 3 4 5
Industry Overview and Growth Potential
Bio – Circular Green
EconomyPeer to peer CO2 emission and PM 2.5 Solving MSW crisis
Contract farming for fuel
crops
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Total Societal Impact(TSI) and Environmental, Social and Governance (ESG)
Biomass Power plant
Municipal Solid Waste (MSW) Power plant
Contribute to the Paris Agreement Decreasing greenhouse gas emission.
Future Potential To provide base-load to grid in place of conventional energy
• Saves government’s spending on putting down forest fires and farm fires
• Saves government’s spending on PM 2.5 related health problems such as respiratory
complications, masks distributions and water spraying in cities, to from PM 2.5 particle.
• Prevents economic loss from the decrease in tourism due to PM 2.5 problems.
Solves PM 2.5 problem at the root
• Additional income to farmers
• Stabilize income for farmers under market uncertainty → reduce empty subsidies that the
government has to give out
• Distribution of revenue to grassroots : Shift from LNG imports to purchasing fuel from individual Thai
farmers
Positive Economic and Societal
Impact
GDP Contribution/1 1.8 Billion THB / year / 9.9 MW biomass power plant
Source: Thailand Energy Academy
Contribute to the Paris Agreement Decreasing greenhouse gas emission.
Future Potential To provide base-load to grid instead of conventional energy
Solves MSW mountain problems Save healthcare and environmental spending for the government from problems caused by MSW in
landfills
Industry Overview and Growth Potential
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Total
Electricity
Capacity as of 2017
Total
Electricity
Capacity in 2037
New installing
capacity for
the next 20 years
Retiring
capacity in
the next 20 years
Renewable37%
Combined cycle23%
New or replacement power plants
15%
Imports 10%
Saving programme7%
Cogeneration4% Lignite or coal-fired
3%
Pumped storage hydropower1%
According to the Power Development Plan (PDP) 2018 hearing, Renewable Energy is targeted to contribute the largest portion, or 37%,
of the total new increased capacity by 2037.
Potential MW during 2017-2037 PDP 2018 New Installing Capacity for the Next 20 Years (MW)
Unit : MW
1
Renewable Energy Contribute Largest Portion (37%) of Increased Capacity
Source: Power Development Plan (PDP) 2018
Remark: /1 Based on crude oil used for in-land transport data in 2018 (EPPO) converted into Barrel of Oil Equivalent (BOE) with 35% cusion
Potential
MW from
EV/1
Total
Electricity
Capacity
with EV
Potential in 2037
+56,431 -25,310
126,640+49,429
77,211
46,090
Largest portion of increased capacity (37%) come from renewable Up to ~105,000 Potential MW within 20 years
PDP2018 With EV Potential/1
Industry Overview and Growth Potential
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Total
Electricity
Capacity as of 2017
New installing
capacity for
the next 20 years
Renewable37%
Combined cycle23%
New or replacement power plants
15%
Imports 10%
Saving programme7%
Cogeneration4% Lignite or coal-fired
3%
Pumped storage hydropower1%
According to the Power Development Plan (PDP) 2018 hearing, Renewable Energy is targeted to contribute the largest portion, or 37%,
of the total new increased capacity by 2037.
Potential MW during 2017-2037 PDP 2018 New Installing Capacity for the Next 20 Years (MW)
1
Renewable Energy Contribute Largest Portion (37%) of Increased Capacity
Source: Power Development Plan (PDP) 2018
Remark: /1 Based on crude oil used for in-land transport data in 2018 (EPPO) converted into Barrel of Oil Equivalent(BOE) with 35% cusion
+56,431
46,090
Largest portion of increased capacity (37%) come from renewable
+56,431 MW
Unit : MW
Total
Electricity
Capacity as of 2017
Total
Electricity
Capacity in 2037
New installing
capacity for
the next 20 years
Retiring
capacity in
the next 20 years
Unit : MW
Potential
MW from
EV/1
Total
Electricity
Capacity
with EV
Potential in 2037
+56,431 -25,310
126,640+49,429
77,211
46,090
Up to ~105,000 Potential MW within 20 years
PDP2018 With EV Potential/1
Industry Overview and Growth Potential
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Unit: MW
Renewable energy portion will move from 26% in 2018 to 46% in 2037
% Electricity Capacity by Source of Total Capacity for 2018 and 2037 Electricity Capacity of Each Renewable Source for 2017 and 2037/1
% Installed Capacity
2037
2018
Renewable Energy will provide 46% of Thailand’s Electricity by 2037
Remark : /1 Excluding retiring capacity in the next 20 years
Source: Power Development Plan (PDP) 2018
Industry Overview and Growth Potential
2017 2037 2017 2037 2017 2037 2017 2037 2017 2037
389%
211%
48%
252%
254% 178%2,573
1,659
5,632
590175 306
12,573
5,155
8,357
2,075
619 852
Solar Biomass Hydro Wind Waste Biogas
2017 2037
73%
26%
1%
48%
46%
6%
Renewable
Conventional
Others
13
4,507
12,790
23,682
1,291 1,119 2,091
22,027
39,740
35,140
4,544 3,958 5,822
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Solar Biomass Hydro Wind Waste Biogas
Looking at GWh contribution to grid, Biomass is the largest contributor to renewable energy growth in Thailand
Electricity contribution/1 of Each Renewable Source of from 2017 to 2037/2
Biomass : The largest renewable energy contributor in Thailand
Remark : /1 Assume 365 days, 24 hours and specific capacity factor of each plant type for electricity contribution calculation
/2 Excluding retiring capacity in the next 20 years
Source : Power Development Plan (PDP) 2018
Average capacity factor of each power type from EGAT, EIA
88%
Capacity factor applied to each plant type
Unit: GWh
20% 48% 25% 73% 78%
Industry Overview and Growth Potential
20372017 20372017 20372017 20372017 20372017 20372017
14
85.2
209.5 210.5 212.2240.15
449.57 449.57
1,000
2016 2017 2018 2019 2020 2021 2022 2024
449.57
Continuous growth with existing PPA along with future potential growth supported by favorable government renewable energy policy
Existing and Pipeline of Company’s MW/1,/2
ACE’s Historical, Current and Future Growth
Source: Power Development Plan 2018
Remark: /1 Including APP’s capacity MW of 9.9, Currently, APP’s shareholders sent LOI for APP share purchase proposal to ACE /2 Estimated timeline : Currently, Arbitration result states that PEA has to return PPA to ACE and with the assumption that normally power project’s construction period is approx. 2 years
Existing, Under-Development and Pending for Development projects
Future Projects to reach company goal
Industry Overview and Growth Potential
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Continuous growth with existing PPA along with future potential growth supported by favorable government renewable energy policy
Existing and Pipeline of Company’s MW/1,/2
348 377 481 834
1,221 1,530
1,920 2,117
2,891 2,950 3,176
3,376 3,376
105 139 174
209
244
244
335
399
514 546
546
546 546
29 57
86
114
143
171
200
229
257 286
314
343 371 6
21
35 44
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Biomass
Biogas
MSW
Industrial Waste
2025 – 2037 Contract Capacity MW according to PDP 2018
Future Growth
Under-Development and Pending for Development
Source: Power Development Plan 2018
Remark: /1 Including APP’s capacity MW of 9.9, Currently, APP’s shareholders sent LOI for APP share purchase proposal to ACE /2 Estimated timeline : Currently, Arbitration result states that PEA has to return PPA to ACE and with the assumption that normally power project’s construction period is approx. 2 years
Industry Overview and Growth Potential
212 212 212 212 212 212 2 209 209 209 209
289 579
2019 2020 2021 2022 2023 2024
Future Growth acc. to plan
Existing
1000
16 Strictly Private & Confidential
196
76
Won the largest portion of MW in the 2017 SPP Hybrid Bidding (Renewable)
Unit : MW
2017 Biomass Bidding
Proven by Recent Bidding
Total PPA Capacity available for Bidding: 272 MW
Potential Upcoming Community Biomass/Biogas PPA/1
Total Potential Capacity available for Bidding: 4,125 MW
Largest bidding winner out of 42 candidates in the 2017 SPP Hybrid
Bidding (Renewable)
1
ACE
Other Bidding Winners in Biomass
ACE got 28% share in Biomass bidding winner
MW
MW
2,997
1,128
Biomass
Biogas
MW
MW
Source : ERC, PEA
/1 Community Power Plant Project Concept, PEA
Industry Overview and Growth Potential
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2 Operational Expertise &
Economy of Scale
✓ Lower plant heat rate = decrease fuel
consumption by up to 30%
✓ Artificial Intelligence, IoTs and Big
data for cost control and operations
improvement
✓ Environmentally friendly
✓ Proven track record in building and
running 19 successful powerplants
projects
✓ Continuous operational improvements
✓ Economy of scale
✓ Strong feedstock purchasing team
✓ Last supply chain network and efficient
(over 40 years in the making)
1 Advance Technology
3 Relationship with Key
Stakeholder
✓ Major shareholders’ plantation
business can support long-term
feedstock development plan
✓ Strong & long-term relationship with
communities and farmers
✓ Strong relationship with lender
ACE’s 3 Core Value Represent Competitive Advantage to Secure New PPAs
R&D
Sustainability
✓ Fuel crops from major
shareholders’ plantation
business
✓ New Biomass Fuel Types
✓ Machineries and improved
design
✓ Feed stock security
✓ Financial security
✓ Community support
Knowhow
✓ Low O&M cost
✓ Strong & capable team of professionals
ready to handle new projects.
Industry Overview and Growth Potential