Monday, August 27, 2007

GE Energy upbeat on Thailand's growth prospects

GE Energy Thailand expects its business to enjoy double-digit growth this year due to a consistent increase in demand as well as the government's policies of supporting power generation and alternative energy.

While focusing on conventional users, the local business unit will in the years to come, with support from its US-based parent company, look for opportunities to bring in cleaner but more expensive technologies whenever Thailand is ready.

According to Kovit Kantapasara, the company executive who oversees the GE Energy business in Thailand and Vietnam, the business outlook remains bright. It is assumed that if a country's gross domestic product expands by 10 per cent, power demand will rise 14 per cent, at a 1:1.4 ratio. In Thailand, the growth rate could be higher as some old plants need to replace their machinery while Thailand is opening bids for new independent power-producers. Meanwhile, small plants are up and running, and many petrochemical plants, heavy energy-users, are located in Thailand.

"In Southeast Asia, GE Energy Thailand is the biggest in terms of revenue, fleet and the number of staff," Kovit said, though he declined to quote figures. The power-technology business is dominated by four companies, Siemens, Mitsubishi, Alstom and GE, but GE claims to be the one with the most complete portfolio of products.

"Our strengths lie in high-efficiency technology and equipment which promises low maintenance costs and high fuel savings. Our technology is competitive. The key is fuel efficiency, as 60 per cent of the cost of generating power is fuel while maintenance is only 5-6 per cent," Kovit said.

In its 15-year history, the company has been providing technology to the Electricity Generating Authority of Thailand, independent power-producers (IPPs), small power-producers (SPPs) and industrial plants. Kovit said 50 per cent of IPPs and 90 per cent of SPPs were running on GE equipment.

Recently the firm has begun penetrating alternative-energy sectors such as biogas and waste gas, with technology support from GE Jenbacher. About 10 silos, mostly involving tapioca flour and palm oil, are now running on power from biogas. Special tariffs for very small power-producers will also boost demand from the segment.

Kovit also foresaw the introduction of wind-power generation in Thailand in the next couple of years, with technology that GE has acquired from Enron. GE Energy is now looking for the best location for wind turbines. In seeking a business partner it expects a warm welcome due to the government's feed-in tariff of Bt2.50 per unit. "Wind power is now prominent elsewhere. We should see it in Thailand after 2009 when demand elsewhere slows and the products become cheaper."

He also has high hopes that in five to 10 years, GE will succeed in its research and development of new solar-power technology, which will shift its focus from the current silica-based systems. GE is looking for new materials that are cheaper and better at capturing heat.

While biogas is gaining prominence, GE Energy is also closely monitoring Thailand's moves towards the development of nuclear power plants. It is also ready to introduce coal-classification technology to Thailand if authorities require a specific type of coal for environmental protection. GE bought the technology from Chevron five years ago, but the expensive technology will be introduced only when Thailand is ready to shoulder the higher power rates involved.

"We have the right technology to support government policies, but we need to balance the use as power is a basic cost for industrial sectors. It is a factor that defines industrial competitiveness," Kovit said, adding that being in the business was a big challenge with everybody going for clean energy which needed clean technology.

Achara Deboonme

The Nation