Energy Management and Climate Change
CHALLENGES
At the same time, the Thai government has implemented measures for amending laws and policies to promote the use of renewable energy and just energy transition (JET) in order to incentivize investors to prioritize renewables-based energy production businesses as they can help decrease risks arising from changes in policies and the ever-intensifying environmental and GHG reduction regulations. Such measures have yielded positive outcomes, as evidenced by the surge in the securities prices of companies with concrete plans to shift towards renewable energy.
Furthermore, new financial mechanisms, such as renewable energy certificates (REC) and carbon credits, have provided renewable electricity producers with instruments to earn additional revenue through the sale of RECs based on renewable power production or the sale of carbon credits for certified carbon offsets certified by central agencies or scheme owners.
All the aforementioned mechanisms are excellent opportunities that CKPower has received through renewables-based power production, which is its primary business pursuit.
OPERATIONAL GUIDELINES
CKPower recognizes the significance of being part of the global community to reduce greenhouse gas emissions and keep global temperature rises under 1.5 °C but also to Thailand’s target Nationally Determined Contributions (NDCs) with regard to GHG reduction and climate change action. To support the achievement of such goals, CKPower has developed energy management and climate change strategies that encompass its entire organization. These strategies align with international standards and the guidelines set forth by the Task Force on Climate-Related Financial Disclosures (TCFD) in order to achieve net zero GHG emissions by 2050, which is a science-based target for private organizations. The pathway towards achieving the target is detailed below.
Energy Management and Climate Change Governance
CKPower has implemented an energy conservation policy and a climate change policy and has established organization-wide targets for reducing energy consumption, including in offices and production processes. The Company also aims to raise awareness of environmental conservation among all units across the organization to encourage employees to develop innovations for reducing energy consumption, enhancing electricity production efficiency, and decreasing GHG emissions while also ramping up investments in renewable energy as well as increasing forested and green areas to GHG removals.
To oversee energy and climate change management, CKPower’s energy and climate change management is supervised by the Corporate Governance, Risk Management, and Sustainable Development Committee and driven by the Sustainable Development Steering Committee, which is responsible for defining strategic directions and goals in accordance with sustainability and climate change policies and operational frameworks to ensure alignment with international standards and trends and for monitoring and working with the working team of every power plant. In addition, CKPower has prescribed the roles and responsibilities, as well as the remuneration indicators, of executives in each area of operation, assigning them to be responsible for sustainability and climate change oversight through monitoring to ensure alignment with the Company’s target and to work with the Sustainability Supporting and Disclosure Working Team to report the performance to the Board of Directors on a quarterly basis.
CKPower is committed to expanding its climate change data disclosure to encompass the entire supply chain in line with the guidelines of the Task Force on Climate-Related Financial Disclosures (TCFD).
Structure of Sustainability and Climate Change Governance
Climate Risk Management
CKPower conducts an annual evaluation of the risks and opportunities associated with climate change. The company recognizes that although climate change may not have a direct impact on its business operations, it has made preparations by performing assessments of its operations in Thailand and Lao PDR, which are categorized into short-, medium-, and long-term timeframes. Once the climate risks and opportunities are identified and prioritized, they are incorporated into the list of corporate risks and mitigation plans, both for physical risks and transition risks, are developed to address them. CKPower ensures transparency in its risk assessments and the establishment of its climate management guidelines in accordance with the guidelines of the Task Force on Climate-Related Financial Disclosures (TCFD).
Task Force on Climate-related Financial Disclosure : TCFD
Energy Management and Climate Change Strategies
CKPower has developed energy management and climate change strategies in accordance with international assessment standards and the guidelines of the Task Force on Climate-Related Financial Disclosures (TCFD), the results of which are used in risk and opportunity analysis in order to formulate action plans for the Energy Management and Climate Change Roadmap.
The Company has created a five-year strategic plan (2022-2026) that aligns with the Net Zero GHG emissions goal by 2050.
Targets
EXECUTION
CKPower and its subsidiaries strive to promote electricity generation from various forms of clean energy, access to power for all, and the utilization of cutting-edge technology for production stability and eco-friendliness. To achieve this, the Company seeks to increase the proportion of power generated from renewable energy by incorporating regional and domestic resources through investments in energy infrastructure and technology, especially in clean energy power plants with zero or low carbon emissions. CKPower’s investments are aligned which aligned with the UN’s Sustainable Development Goal 7: Affordable and Clean Energy
In 2022, CKPower’s investment was divided into 88% in hydroelectric power plants, 11% in cogeneration power plants, and 1% in solar power plants.
Remark: The investment is calculated based on the installed capacity.
| Hydroelectric Power Plants | 1,900 MW (88%) |
| Solar Power Plants | 29 MW (1%) |
| Cogeneration Power Plants | 238 MW (11%) |
2022 Performance
In 2022, CKPower released a total of 717,775.96 tCO2e/year of greenhouse gas emissions. This includes the emissions from GHG Scope 1, which amounted to 715,530.79 tCO2e and 2,245.17 tCO2e of GHG Scope 2. The amounts were calculated in reference to the Greenhouse Gas Protocol and the carbon footprint calculation and reporting requirements of Thailand Greenhouse Gas Management Organization (TGO) and were verified by EY Office Limited as an independent third party. The assurance report appears in the Assurance Statement.
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Green Bond
In 2022, Xayaburi Power Co., Ltd. (XPCL) issued green bond worth THB 8,395 million under a green bond framework verified by Det Norske Veritas (DNV), world-class accreditor, as an independent external reviewer in alignment with the Green Bond Principles 2021 and the ASEAN Green Bond Standards 2018.
Also, the green bond issuance won the Best Green Bond Hydropower Plant Framework Award at the International Finance Awards, hosted by International Finance Magazine, a leading business and finance magazine published in London, UK, and was named a winner of the Most Sustainable Hydro Power Company Award in the Utility & Energy Award Winners category at the Global Economics Awards, organized by the UK’s leading finance magazine The Global Economics – a testimony to the Company’s sustainable operation in the hydroelectric power plant business.
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Internal Carbon Pricing: ICP
CKPower has studied the adoption of Internal Carbon Pricing (ICP) to prepare for government regulations in the future and to analyze addition costs and returns from GHG emission reduction in order to formulate its GHG management plans and strategies.
Projects for the Reduction of Energy Consumption and GHG Emission in 2022
CKPower is actively implementing 11 energy efficiency and conservation projects to reduce energy consumption and GHG emissions. These projects focus on minimizing energy loss, increasing efficiency, and promoting employee awareness on energy conservation and carbon footprint reduction in compliance with the ISO 50001:2018 energy management standard. These solutions are developed through observation and innovation, utilizing existing resources such as human resources and equipment without adding to the company’s budgetary burden.
| Energy Conservation Projects in 2022 |
|---|
| 1. Steam turbine load adjustment project |
| 2. Air dryer deactivation project |
| 3. Cooling fan deactivation project |
| 4. Cooling Tower Optimization project |
| 5. Lower Gas Pressure Better Heat Rate project |
| 6. Improvement online cleaning system for air compressor air system of steam turbine project |
| 7. Gas compressor power reduction project |
| 8. Office energy consumption reduction project |
| 9. Dam crest and outdoor lighting improvement project |
| 10. Energy efficiency enhancement project (LED replacement) |
| 11. Internal Combustion Engine to PHEV transition project |
Improvement Online Cleaning System for Air Compressor System of Steam Turbine Project
Bangpa-in Cogeneration Power Plant implemented an online system to improve the cleaning of the air compressor of the gas turbines, reducing the frequency of washing required. This initiative resulted in water and electricity savings without impacting the efficiency of the air compressing system.
Gas Compressor Power Reduction Project
Bangpa-in Cogeneration Power Plant enhanced its electricity production efficiency by adjusting the circulation level to suit the condition of the power plant in order to reduce the energy consumption of the gas compressor.
Electrical saving project
CKPower launched a campaign encouraging employees across the organization to save energy at work using the “Switch off – Adjust – Change – Unplug” method with the goal of rising awareness of resource efficiency and the value of resources.
