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POSTED | 18:25 PM | 26-03-2014

Thai solar firm blazes trail in Japan

-- By Cimi Suchontan

A Thai solar group has won a 4-billion-yen deal to build a 13-megawatt solar farm on Osaki-Kamashima island in Hiroshima. It has formed Setouchi Natural Power (SnP) with Japanese partners to construct what would be one of the first large sized solar farms in Japan.

 SnP engineers at work on a solar farm.
 

It is part of a big push by Japan to shift from nuclear into renewables after the Fukushima Daiichi nuclear disaster in March 2011. The deal also has a symbolic importance in post-World War II Japan, which suffered two major nuclear catastrophes 67 years ago.

On August 6, 1945, the first of two nuclear weapons, also known as the atom bombs, was dropped on Hiroshima, killing 140,000. Three days later, 90,000 died when another nuclear bomb was dropped on Nagasaki.

Like the cover-up at Fukushima, Japan did not know what happened in Hiroshima or Nagasaki because of information censorship until six years later. Japanese people were outraged when former government officials admitted, more than a year after the Fukushima meltdown, that the danger of radiation was deliberately played down.

The seriousness of the nuclear contamination was never openly acknowledged while people living 30 kilometres around the disaster zone were evacuated. The displaced folk will probably never be allowed back to their homes this century until the radiation levels drop to safe levels.

The Thai-Japanese venture should try to heal all these wounds in one of Japan’s most tragic regions. The SnP project also marks the first entry to Japan’s energy space by Thai investors.

The Thai group’s key player is Woramol Khamkanist, who is a pioneer in green energy in the region. He is responsible for Thailand’s largest solar farm in Lop Buri, built in just 18 months and delivering its payload shortly after in 2011. He is also crucial in producing a clear, simple financing model that has secured 5 billion baht (about US$167 million) from lenders, including the Asian Development Bank, to fund the Thai solar farm in 2010.

Woramol says the project will be a major turning point for his team, who completed from scratch the Lop Buri farm, ranked Asia’s second biggest in operation today. The plant, called NED (Natural Energy Development), is a joint venture between Thailand’s Egco, Hong Kong’s CLP and Japan’s Mitsubishi.

Under Woramol, SnP obtained the Hiroshima project through an open bidding process involving 22 submissions including those from giants like NTT Docomo and Hitachi. 

The Thai group’s proven track record and experience in operating the showcase 84-MW NED site in Lop Buri, two hours’ drive from Bangkok, had made them famous in Japan.

As Mitsubishi was one of the three partners of the Lop Buri venture with a 30-percent stake, there was substantial confidence in Woramol’s work to earn the Thai group approval in the decision process.

Also, NED’s use of Sharp thin-film solar panels and inverters helped to boost goodwill among the Japanese.

"Winning a bid in Japan has a lot to do with reputation," says Woramol. "Most deals in Japan are based on relationships."

Community involvement

Another winning pitch was SnP’s focus on involving the local community. Osaki-Kamishima island has a community of 8,000 people. It is just a 20-minute ferry ride from Hiroshima city. The plant’s output can more than power the islanders’ needs and be profitable for investors and lenders of the deal.

As one of Japan’s most beautiful islands, Osaki-Kamishima is proud of its rich culture. Most of the islanders are fishermen or farmers. Like a village trapped in time, Osaki-Kamishima has retained its classical village appearance while maintaining a way of life that has passed from one generation to the next.

To enhance the island’s scenic landscape, SnP will provide areas for an orchard. The islanders will cultivate and maintain the fruit farm. SnP will also construct a bicycle path encircling the plant for locals to use. A learning centre will also be built for the public. Another focus will be to promote tourism.

The project will provide employment for 200 people during construction.  About 10-15 positions will be available when the firm starts operations.

The project development is led by Somboon Lertsuwannaroj, who said: "We made a strong bid by including community participation. One of the bid’s criteria set by the Hiroshima officials was that we look into the needs of the islanders."

Woramol is also working on one of Thailand’s modern wind farms. His wind turbines project to generate 60 megawatts in the northeastern province of  Nakhon Ratchasima is also taking shape. "I have to thank my young team who made it possible."

The Stanford University graduate heads a crew, whose average age is less than 30. "We are a small team of 30 and we do everything. There’s no bureaucratic red tape or office politics that plague large organisations."

His first solar project was a milestone in turning around renewable projects in Thailand and Asia.

"Just four years ago, no one believed solar could be a viable business. No bank would lend you money for a solar venture. Today everyone wants in."

"Four years ago no one wanted to do it. Today we have shown it is profitable and risk-free."

The oil lobby is one of the biggest obstacles to clean fuels as it fears losing share and influence. But Thailand’s government, inspired by His Majesty King Bhumibol Adulyadej’s call to use local fuels to supplement energy needs, has been the great equaliser.

Thailand used to spend more than 12 per cent of its GDP of US$350 billion on imported oil. Cutting that by 25% will be hugely beneficial to the public while checking foreign exchange outflow.

Cimi Suchontan is a veteran journalist having served 15 years with the Bangkok Post and is currently editor of the Nation Green Report, a publication covering Thailand’s renewable energy industry. His articles have also appeared in The Straits Times, New Straits Times, International Herald Tribune, The Star Malaysia, Hong Kong Standard and Japan Times.

 

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