Economic Performance

 

Economic Performance  and  Indirect Economic Impacts

                Creating economic value through an environmentally friendly power generation business model is the key to creating shared values between the Company and society to grow together sustainably and efficiently. In 2023, the Company formulated important business strategies such as strategies to increase revenue, improve electricity production efficiency to increase the maximum capacity utilization rate, increase the amount of electricity sold, and reduce production costs, and growth by expanding investment to generate good performance of the Company which leads to the distribution of income and benefits to all groups of stakeholders of the Company.

Management Guidelines

  • Management of power purchase agreements for power plants with current power purchase agreements as there are three current power purchase agreements with the Electricity Generating Authority of Thailand and it is sold to the cement plants with different prices in each agreement. For example, a selling electricity price per unit for the 90 MW project has an adder included in the base electricity cost. Therefore, it plans to manage to sell electricity to the full agreement in this part. The second part is the electricity sales agreement with the cement plants, which has the second highest electricity rate, but the cost of coal-fired power generation is higher than that of waste-fired power plants and the 18 and 55 MW power sale contracts where the adder has already expired since the electricity tariff is based on the TOU electricity scheme, the price of electricity during the peak time will be higher than the off-peak period. Therefore, it is necessary to plan the operation of the power plants in order to maximize revenue in case of limited production due to boiler maintenance shutdown and plan to reduce electricity distribution during off-peak periods in case of being affected by coal fuel cost price for profit optimum with the Company.
  • Increasing the amount of electricity production and distribution as the adder in the electricity agreements with PEA in 2022 starts to expire and the cost of coal prices has increased very high. The plans for major maintenance have resulted in a decrease in power generation and electricity sales. In 2023, the electricity rate has increased due to the increase in the variable FT electricity. Therefore, production planning in 2023 is to operate the power plants with more production capacity to generate more profit than in 2022.
  • Reducing production costs, which means fuel costs, fuel efficiency in power generation, and maintenance costs, has organized a plan of action in order for business operations to establish a clear goal of reducing total production costs by at least 10% by:
  • Reducing fuel plants will be carried out to increase the proportion of municipal waste and low-quality sorting waste, which will reduce the overall raw material purchase cost.
  • Using a higher proportion of low-quality waste fuels in order to reduce the cost of steam production per unit. The Company has implemented grate incinerators and boilers that support unsorted waste and low-quality waste, making it a management guideline to reduce fuel costs and power generation costs.
  • Applying the combustion control system, if implemented, can increase the efficiency of power generation, expected to reduce the cost of power generation in AI-powered generating units by approximately 5%.
  • Using waste to replace the use of coal has implemented a project for coal-fired boilers that can replace boiler 6 by completely eliminating coal-using waste, which has been completed in early 2023.
  • Reducing coal consumption with alternative fuels from waste, wood, and other renewable fuels in boilers 8, which can reduce coal consumption by 10-15%.
  • Maintenance costs by planning major maintenance shutdowns continuously from 2022, causing investment in major renovations of the boilers and allowing for reduced long-term maintenance costs for power plants and increased efficiency in power generation.

 

  • Investment project to increase the volume of green electricity sales, totaling Baht 13,275 million

The Company has engaged in investment operations for the purpose of expanding production capacity and electricity sales contracts, 6 projects detailed as follows:

  1. Boiler Fuel Replacement Project for Power Plant, TG 8, with a capacity of 150 megawatts

        On 27 April 2022, TPI Polene Power signed a contract to procure machinery and equipment, including construction and installation for three sets of RDF Boilers 160TPH, as part of the development plan for the power plant, TG 8. The objective is to transition from coal to waste fuel by 2022, with additional boilers currently being installed. The project has reached 25% completion and is slated for full operation using waste fuel by 2025. This transition will enable TPI Polene Power to generate a total of 440 megawatts of electricity, converting all plants to renewable energy power plants.

  1. Solar Farm Project (Zone 1 - 2)

   The construction site, located in Kaeng Khoi District, Saraburi Province, features installed power on the ground for Phase 1, amounting to 61.226 megawatt peak or 52.20 megawatt AC, and Phase 2, amounting to 11.99 megawatt peak or 9.6 megawatt AC. The primary objective is to supply electricity to cement plants pf TPI polene, thereby supporting the increasing demand for renewable energy. It is anticipated to be completed, with electricity supplied to the distribution system by the end of 2024.

  1. Solar Farm Project (Zone3)

The construction location is in Kaeng Khoi District, Saraburi Province, with an installed capacity of 11.9925 megawatts peak (9.6 MWac), designed to supply electricity to a cement factory and support the growing use of renewable energy. Currently under construction, the Company is also in the process of applying for the Factory Operation License (RorNgor.4). The Scheduled Commercial Operation Date (SCOD) is expected to be set for the third quarter of 2025.

 

  1. Community Solid Waste Management and Handling Project in Ko Taeo Sub-district Municipality, Songkhla Province

Located in Mueang District, Songkhla Province, the project has the capacity to dispose of 500 tons of waste daily. Currently, it is in the process of installing a 9.95 megawatt generator with the intention of selling 7.92 megawatts of electricity to the Provincial Electricity Authority under a Power Purchase Agreement (PPA) already signed. The project has secured a construction permit and is currently under construction, with progress at approximately 65%. Anticipated completion is expected around the beginning of 2026, at which point electricity sales into the system will commence.

  1. Community Waste Fuel Power Plant at Mueang Mukdahan Municipality, Mukdahan Province

The Company participated in the bidding for a project to manage and process community waste into environmentally friendly, closed-system electrical energy in the city of Mukdahan, Mukdahan province. The project has an installed capacity of 9.9 megawatts and an electricity sales capacity of 8 megawatts. The Company was announced as the selected bidder and signed the project contract with the Mukdahan Municipality on December 21, 2023. Subsequently, on February 27, 2024, the Company successfully signed a power purchase agreement with the Provincial Electricity Authority, with progress at approximately 5%. Anticipated completion is expected around the beginning of 2026, at which point electricity sales into the system will commence.

  1. The Company participated in the bidding for a Community Waste Management Project in Chiang Rai Province, converting waste into electricity, on October 25, 2024, with the highest offered electricity capacity of 8.00 megawatts. On November 20, 2024, the Company received a notification of the procurement result as the selected candidate, having met all qualifications and submitted a complete technical proposal. Additionally, the Company achieved the highest score for the community waste management and electricity generation project.

The Company has analyzed the operating results to find causes and solutions or improvements so that the Company can eliminate weaknesses in business operations as well as find opportunities to increase revenue and increase profitability by setting goals in each sub-unit, measuring effectiveness, and presenting information and communicating results to employees to stay informed and guidelines to operate in the same direction to be a mechanism for the implementation to achieve the Company's goals. It also looks for opportunities to expand according to the direction of Thailand’s Power Development Plan (PDP) and seeks cooperation and business alliances to support the Company's growth.

 

Performance in 2024

In 2024, the Company directly distributed economic value to stakeholder groups, creating a cumulative economic value of THB 743.94 million. The breakdown is as follows:

Economic Description

Million baht*

(A)   Direct Economic Value Generated

Revenues

10,747.32

(B)   Direct Economic Value Distributed

Operating costs

6,819.75

Employee wages and benefits

130.19

Payments to providers of capital

2,804.82

Payments to government

197.36

Community investments

51.26

Total

10,003.38

(C)    Economic value retained (A-B)

743.94

Note : * Based on the Company's separate financial statements