July 27, 2017 / 6:19 AM / 2 years ago

INTERVIEW-Thai renewables company BCPG looks homeward for $1 billion spending budget

* BCPG to invest $1 billion over next 5 years

* M&A activity to slow as greenfield investments take precedence

* Future investments will include domestic projects

* Company to establish solar-powered microgrids in Thailand

* China and India present investment opportunities

By Mark Tay

SINGAPORE, July 27 (Reuters) - BCPG, the renewable energy spin-off of Thailand’s Bangchak Corp. plans to invest $1 billion over the next five years with 40 percent of that planned for domestic power projects after years of overseas spending, the company’s president said in an interview on Wednesday.

BCPG previously spent $1 billion over the past two years mainly on geothermal projects in Indonesia, solar power in Japan and wind generation in the Philippines. The company’s focus will shift to Thailand, with a particular focus on constructing small, self-contained power grids known as microgrids.

“Two-thirds of the company’s revenue is from overseas projects… It is time to go home. We spent almost two years outside, so now our focus is more in Thailand,” BCPG’s President and Chief Executive Bundit Sapianchai told Reuters.

To reach its target of owning 1,000 megawatts (MW) of renewable generation capacity by 2020, BCPG will have to acquire an additional 400 MW of capacity, he said.

BCPG intends to build 150 MW of the new 400 MW capacity in Thailand, focusing on biomass and rooftop solar power investments, he said, adding that the remaining capacity would likely be investments in wind power projects in the region.

“Regional plays, mergers and acquisitions (M&A) opportunities are still on but we have slowed down. We are now focused more on greenfield (projects) rather than M&A,” he said.

BCPG plans to use the rooftop solar projects as a way to bring the microgrid concept to Thailand. The photovoltaic panels on residential and industrial properties in an area will produce renewable electricity that will then be sold back to nearby consumers connected via the local power distribution grid.

“The industry is shifting... It is moving from a centralised generation to a distributed energy (model) where technology such as the internet of energy or blockchain will be in place for the distribution,” Sapianchai said.

BCPG hopes to have a microgrid project implemented within the year, he said, declining to provide specific details as it is still being developed.

Still, technical issues surrounding microgrids must be overcome, particularly around the selling of surplus power from the microgrid to the larger national power distribution grid.

“We will need to redesign and talk to the government on the regulatory constraints. (But) it is a win-win… because the government will not have to pay for a big centralised generator for the country,” Sapianchai said.

BCPG still sees renewable energy opportunities overseas in India, but particularly in China, he said.

“There are some challenges in China, which basically is from the transmission lines because the grid is jammed... We are keeping a close eye on China, if this situation improves we will consider going to China.” (Reporting by Mark Tay; Editing by Christian Schmollinger)

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