SET-listed Gulf Energy Development Plc, one of Thailand's largest power producers, has denied widespread reports that it is interested in acquiring Glow Energy Plc and Wind Energy Holding (WEH).
Chief executive Sarath Ratanavadi said the rumour is untrue and Gulf has never approached either of the companies.
"Gulf prefers new investment projects rather than acquisition deals because they have higher returns on investment than existing power projects," he said.
Mr Sarath said Gulf has committed to many developments over the next five years, with a combined capacity of 11,126 megawatts.
Of the deals, 6,700MW in capacity are under Gulf's ownership, which requires a huge budget.
"We have to carefully consider each new acquisition deal," he said.
French company Engie is the majority shareholder of Glow, and tried to sell its stake to SET-listed Global Power Synergy Plc (GPSC), the power business arm of PTT Plc, but the deal was blocked by the Energy Regulatory Commission (ERC), on the grounds that the deal would give GPSC a monopoly on power distribution in Map Ta Phut Industrial Estate.
WEH is owned by the Narongdej family and their creditors are recommending a transfer of ownership for smoother development and operation.
"We have been approached by several companies, but we need to conduct our screening processes because each asset acquisition has to offer a good return for Gulf, and energy policymakers have to approve our power business operations," said Mr Sarath.
He said some projects have low cash on hand and have faced complications, making higher returns on investment difficult to achieve.
"Purchasing debentures would be better than acquiring assets," said Mr Sarath.
Gulf expects fully operational power plants to reach capacity of nearly 7,000MW by 2025, up from 2,253MW now. This future capacity has already been committed to its electricity buyers.
Gulf's revenue at the end of 2025 is projected to grow to 150 billion baht.
By 2019, Gulf expects revenue to jump by 60% to 32 billion baht from 20 billion in 2018 as the commercial operation dates (CODs) of five power plants approach.
The five projects consist of four gas-fired small power producers -- one in Rayong, two in Saraburi and one in Nakhon Ratchasima -- and one solar farm in Vietnam.
After the CODs in 2019, the five power plants will lift power generation under Gulf's ownership from 2,253MW to 2,667MW, an increase of 18.4%.
Mr Sarath said renewable power generation in Thailand will be pressured as natural gas prices fall in the future, as a result of PTT Exploration and Production winning the Erawan and Bongkot fields for an average gas price at 116 baht per million British thermal unit.
The price for natural gas will decline sharply, directly impacting renewable power because policymakers have already announced a feed-in tariff (FiT) rate for renewable power at 2.44 baht per kilowatt-hour, equal to the rate for fossil fuel-based power like natural gas, he said.
"While renewable power is not an attractive business in terms of FiT rate in the future, Thailand will benefit from cleaner power with prices competitive to fossil fuel-based power without any subsidy," said Mr Sarath.
He said Gulf will exit the import and distribution of liquefied natural gas (LNG) after the ERC did not grant it an LNG licence.
Gulf believes the LNG conditions do not provide sufficient opportunity for business operations, said Mr Sarath.
