Energy Absolute is poised to be the largest renewable energy company in Asia, in terms of total electricity production capacity from solar and wind power. Success has come fast for Energy Absolute (EA) and the company has become Asia’s leader in green energy within three years of being listed on the Thai stock market. EA has a biodiesel production capacity of 800,000 litres per day and after completion of all power plants in 2017, the total capacity in producing electricity from solar power will be 278 MW and from wind power will be 386 MW.
EA’s financial performance has increased sharply over the last two years. In 2012, its net profit margin was only 2.4 per cent, return on equity was only 10 per cent and total asset was US$79.53m.
As of the end of September 2014, net profit had surged to 22 per cent, return on equity was over 27 per cent while total asset grew to over US$453m. In EA’s power business only, the net profit margin is more than 60 per cent.
This rapid growth came thanks to the innovation and hard work led by CEO and founder Somphote Ahunai. EA is gearing up to invest or partner in new opportunities and projects that reflect the company’s strategic vision.
Breaking new ground
EA entered the renewable energy business in 2007. Mr Somphote and his engineering team upgraded a small scale palm cooking oil plant to a strong producer of biodiesel and glycerine, for higher returns.
EA relied on its engineering and design teams to develop techniques that lowered set up and running costs in its biodiesel plant.
This operational efficiency has made EA one of the leading biodiesel producers in Thailand and paved the way for its expansion into electricity generation.
Starting from designing, developing and operating its first solar power plant, with a production capacity at 8 megawatt AC in 2012, EA’s team has progressed to developing its own technology. This knowledge has contributed to EA building the largest solar power plant in South-east Asia with a capacity of 90 megawatt AC. At this plant, EA installed 500,000 PV modules covering 732 acres within two months, employing more than 300 local workers. The fastest work recorded during this period was the installation of PV modules to generate 2 mega watts per day. It took only six months to complete the total construction, which also represented a milestone in the sector.
The success in engineering is demonstrated in the energy output, which is more than 10 per cent higher than expected, with an EBITDA margin of more than 90 per cent.
The challenge in 2014 was to build the largest solar power plant with a tracking system in South-east Asia – covering around 900 acres. The technology was designed to increase energy output by about 15 per cent while the project cost was to increase by only 10 per cent. EA’s engineers faced a huge challenge in meeting the deadlines for the project. In the end, construction was completed within five months, a record time for such a project in Asia. Using techniques refined during this project, EA could now set a new record by installing PV modules generating 4 mega watts (more than 9,000 modules) per day.
After the second 90-MW solar power plant has begun operations at the beginning of 2015, the strong growth of EA’s net profit will continue. A final solar project, also with a capacity of 90 megawatt AC, has started and is scheduled for completion this year. It is certain EA’s experience across previous projects will help to improve performance and save on cost and time.
Winds of change
EA is also embarking on another highly challenging project – its first wind power plant in the southern part of the country. EA aims to diversify the operational risk of producing power from solar energy during the day, to wind, which is generated mostly during the night. However, wind capacity in Thailand is not as strong as in some other countries so EA has opted to use world-leading technology provided by Vestas Wind Systems A/S. EA believes that the construction of its first wind power plant will be completed within the first quarter of 2016 and will finish all wind power projects within 2017.
EA currently sees solar power as its success, and wind power as its challenge. It is widely acknowledged across Thailand and Asia that renewable energy is one of the most attractive and important industries. Higher competition will result in lower return. EA is looking for synergy with its partners, and is ready to offer technological support to any potential project that can generate benefits for both sides.
EA is not only operating in the biodiesel and electricity generation sectors but is also expanding its capabilities to cover other areas of technology to enhance growth and the sustainability of its business model. Driving this is EA’s team of engineers, who are developing new technology internally. There will be a big leap forward in 2015.
Developing local communities
EA regards the local communities living near its plants as important stakeholders. Throughout the construction of its power plants, EA hired hundreds of local workers. EA has also initiated programmes to help improve the health and education of the communities living near its plants. One such programme involved turning idle land within the power plant into organic agricultural land to grow crops, such as rice berry.
This programme employed local people to test the planting of these crops using limited water, which is a common constraint within the area. Knowledge gained through experiments in these farms is shared with the local communities.
The power plants are EA’s tangible assets while its relationships with nearby communities constitute a high-value intangible asset.
EA believes this ethos will establish the sustainability of the company.
EA does not only aim for high profits, but also to pass on its know-how and to build a sustainable future for renewable energy in Thailand. EA believes the more success it has in developing renewable energy, the more Thailand will grow and improve its global standing.
CEO profile Somphote Ahunai
After obtaining a Bachelor’s Degree from the Faculty of Engineering at Chulalongkorn University and an MBA from the University of Pittsburg in the USA, Somphote Ahunai began his career in the financial market as an analyst for W I Car before becoming Head of the Marketing Division at a securities broker. When he was 28, Mr Somphote was assigned to lead a project with an initial capital of THB 500m, to acquire Yuanta Securities, a small security broker. He was then appointed as Thailand’s youngest managing director in brokerage service. By developing the systems in place, along with his skill in risk management and profit management, he helped move Yuanta Securities into a leading position within three years.
Shifting his focus from financial markets to the energy sector, Mr Somphote set out to become a major player in alternative energy and the renewables sector.
In collaboration with colleagues across different areas of engineering Mr Somphote lead a biodiesel plant before expanding to into solar power and wind power.
Though Energy Absolute has grown far more than anticipated in becoming the largest renewable energy company in Asia, Mr Somphote’s leadership philosophy never allows him to stand still. His focus is on Energy Absolute, and how it may grow in the years to come.
To find out more please visit: www.energyabsolute.co.th