No more Renewable Energy?
If you want to know what’s been going on with the renewable stocks, its because of news such as this. Even though the government and related agencies put together a thorough Power Development Plan for the next 2 decades clearer showing that Thailand is does NOT have the power necessary to fulfill future demand, this newly appointed donkey decides to make such a statement (see below). Now does the price action make sense? For almost all the players no because the capex/investments are effectively completed and they are generating decent levels of Cashflows. But news being what it is results in such a performance for the group.
Energy Minister Siri Jirapongphan said the state will not buy more renewable-based electricity from small power producers and very small power producers, nor will it purchase from local or overseas plants.
He said the cost of renewable power would make Thai consumers pay a higher power bill, 20-25 satang more per kilowatt-hour.
Moreover, the government has its Quick Win projects that include 12 solid waste power plants with a total capacity of 77.9 megawatts (MW).
Thailand’s power development plan for 2015-2036 saw energy policymakers set the proportion of renewable power at 20% of the total power-generating system, or 19,634MW by 2036.
The figure is relatively high compared with the current 7,490MW.
He said state utilities will pay a feed-in tariff to private power producers of 2.40 baht per kilowatt-hour, the same rate Electricity Generating Authority of Thailand pays now.
Renewable power was offered to Thai investors in 2007 through a government support scheme for new development with adder rates (the rate state utilities pay operators) of 8.5 baht per kilowatt-hour for solar panel-generated electricity.
Over the past decade, renewable power has expanded in capacity from 100MW to almost 10,000MW at present.
Mr Siri said the government will continue to promote biomass power plants in the Deep South — Yala, Pattani and Narathiwat — with total capacity of 300MW as it aims to solve power shortages in this part of the country over the next 3-5 years.
Source: Bangkok Post
Xavi
Pon, you’ve missed the EA bloodbath up there, wiped out about 110 billion baht of market cap in a matter of weeks….some analysts still pushing target price of 70 baht (Krungsri)..
Pon
Ah yes, that is correct.
But the increase for them came as a result of the battery storage investment.
Peter
well, their P/E is – even AFTER the bloodbath – still quite high for a company in the energy sector and their dividend yield is also quite measly…
and their stock is still higher than it had been 1 year ago…
Pon
PE will naturally decline over time as their renewable projects come online.
Peter
IF there are no delays in the implementation, IF the revenue for the company will really be as good as expected, IF the demand is as big as thought, etc.
many if’s. also, I’d say that generally the market/s is/are not any more in the good mood/that positive about future developments as it/they had still been at the start of this year…