Thai contractor Demco keen on expansion in renewable energy sector

Construction News
A 60MW wind farm operated by Demco generates power in Phetchabun’s Khao Kho district.

Thai contractor Demco keen on expansion in renewable energy sector

SET-listed Demco, a contractor and engineering service provider, is expanding its clean energy business following diversification into this sector by joining the government’s promoted renewable power development scheme.

The company proposed power generation projects in an auction for the 5.2-gigawatt renewable power scheme, overseen by the Energy Regulatory Commission (ERC), said Pongsak Sirikupt, chief executive and managing director of Demco.

The projects include a 90-megawatt solar farm in the small power producer segment and an 8MW solar farm in the very small power producer category.

Demco’s proposals have qualified for the final round of the auction.

The ERC is scheduled to announce the winners in April.

The 5.2GW capacity is projected to come from four renewable sources: bio-gas (335MW), wind power (1,500MW), on-ground solar farms (2,368MW), and on-ground solar farms with energy storage systems (1,000MW).

Demco is also interested in ERC’s second-phase renewable scheme, with total electricity generation capacity of 3.6GW. This auction is scheduled to be organised later this year.

The company diversified into the renewable energy business because it has good growth potential as part of the government’s efforts to cut carbon dioxide emissions, said Mr Pongsak.

Demco plans to spend 900 million baht over the next three years to support its rooftop solar power business by increasing capacity by 40MW under private power purchase agreements, he said.

The increase requires the company to raise funds by issuing warrants for its sale of 146 million shares, valued at 3.5 baht per share. The fundraising plan needs to be approved by its shareholders.

The new 40MW will add to Demco’s renewable energy portfolio, which includes 9.7MW rooftop solar power as well as wind and solar farms, with a combined capacity of 70MW, based on the company’s shareholdings in renewable energy operators, said Mr Pongsak.

Demco expects its revenue this year to come from a backlog of turnkey projects worth 2.9 billion baht as well as project bids with the Electricity Generating Authority of Thailand and the Provincial Electricity Authority.