TET: Please explain the history of BGRIM.

BGRIM: B.Grimm as a group has been operating in Thailand since 1878 and we have been at the forefront of infrastructure development in Thailand ranging from telecommunications to transportation. As an organisation we were and are exploring for businesses that suit our business culture. Thus in the mid-1990’s when Thailand’s economy was developing at a rapid place the Thai Government begun to open to the private sector the opportunity to participate in the power generation business to facilitate the ever growing energy needs of the country we felt that this industry was a fit for B.Grimm’s culture. It was a fit for the culture because of the structure of the concession as it is for 20 to 25 years and if a plant generates 130-160 MW then 90 MW is sold to EGAT for 25 years and the rest to industrial users. At the time the objective of the Small Power Producer (SPP) framework was to promote industrial estates to build power plants within their estates thereby attracting foreign companies to invest into Thailand. Together with strong partners in Amata City, Siemens and KfW we set up B.Grimm Power and developed our first power plant valued at THB 5 billion. Our strategy was to become a real power developer by developing, constructing, and operating the plant ourselves to ensure its success, it has proven to be the right strategy and one that we have maintained until today. One of our strengths is our culture because we take the viewpoint of doing business with compassion and because of this we have strong partnerships in place to weather difficult periods. The first power plant in Amata City Chonburi was during the Asian Financial Crisis and because of our history of doing business, strong teamwork and strong relationships with our business partners and financial partners we were able to successfully complete the project and continue to successfully grow BGRIM over the past 22 years.

TET: What is BGRIM’s business structure and outlook today?

BGRIM: Today BGRIM is one of the largest SPP’s in Thailand with the highest installed capacity at 1.8 GW with the highest number of operating power plants throughout the energy industry. SPP’s within industrial estates represent 75% of our portfolio, 25% in renewable energy and the remaining in transmission and distribution. For the SPP’s we have a total of 2.2 GW with 1.8 GW in operation, 15 plants, five in Amata City Chonburi, five in Amata City Rayong, two in Bangkadi, one in Hemraj and two which we acquired from Sime Darby Energy in Laem Chabang industrial estate. As a power developer we were able to acquire these two plants from Sime Darby
because we have the necessary economies of scale for dispatch management, understanding loan factors and demand requirements of customers in real time which in turn allows us to manage the gas cost effectively as 80% of costs is from gas. And the acquisition of those two plants has proven to be successful as we were able to double operational efficiency due to our scale and technological capabilities. What is very important is the relationship with the customers, in each of the industrial estates we have the exclusivity to provide power to customers and because of our location within the estates we are able to supply power directly to them which results in the stability and reliability being higher than the government’s sources due to the distance from the main power sources and distribution lines. Today we have 300 customers including those in Thailand and Vietnam and they are world-class companies in big industries such as Sumitomo, Bridgestone, Denso, Michelin, Colgate-Palmolive and many others. Under the renewable group, we have 718 MW with 134 MW in operation across solar, hydro, industrial waste to energy and wind and this segment has been a positive diversification for our portfolio as energy supply within Thailand and the region will be a combination of multiple forms of power generation.

TET: BGRIM has been expanding throughout the region, could you provide an update on these developments?

BGRIM: In Vietnam there are big opportunities, the opportunities for solar investments have just opened as the country has signed the Paris Protocol. We recently completed a signing ceremony with the Prime Minister of Vietnam for 420 MW solar projects, which is the largest in ASEAN and we have aspirations to continue growing within the country. In Korea we signed an MOU with KEPCO to explore the opportunity to invest in renewable energy, smart grid system and energy storage systems. The government in Korea is very supportive of these projects and we are currently in the due diligence phase. In Laos we have a small hydro power plant with 20 MW in operations already and target an additional 15 MW to be completed by the end of this year.

TET: What differentiates BGRIM from its competitors?

BGRIM: We are a true power developer beginning from the planning and designing phase to the construction and operations until the end of the concession. We have a committed growth pipeline to 2.9 GW by 2022. So our strength is in the experienced engineering and business development teams where we have kept the same Managing Directors for each cluster since inception. This combined with world-class technology, with standards of business, strong financials and a well-managed capital structure allow for us to continue expanding and maintain high operational excellence throughout the region. Initially we were focused on highly efficient operating plants and this gradually expanded to look for attractive M&A opportunities, and then we expanded to renewable energy projects both within Thailand and internationally. By combining our strategies, being a real power developer and efficiently evaluate projects we are able to benefit from being a member of B.Grimm by utilising the business relationships to explore new opportunities throughout the region.

TET: How do you view the energy sector developing within Thailand and the region?

BGRIM: Technology is very wide ranging and we are continuously educating ourselves on energy storage systems and battery technologies but will not rush to invest because it is rapidly changing. Instead we look to understand the whole process of the power system and to aim for technologies that will allow for us to stabilise power delivery to our customers. For example within Amata City the Thai government wishes for it to become a smart city with solar rooftop power and this means that we have to be able to integrate both solar and gas energy to provide reliable and stable power to our customers. I believe that Distributed Generation (DG), which is what the smart city and smart grid concepts are based upon, will become more prevalent in the future. To construct large power plants and distribute the energy via long transmissions lines are becoming less feasible for the country and I expect to see Thailand developing more DG’s in the future.

TET: Where do you see BGRIM in five years from now?

BGRIM: Maintaining our core values and vision of Empowering the World Compassionately in that all stakeholders, whether they be customers, suppliers, employees and shareholders continue to perceive that BGRIM is at the forefront of the industry as a true power developer.

Source: Bloomberg