Kiatnakin Phatra Securities (KKPS) wrote that Thailand’s new Power Development Plan (PDP), which is expected to be implemented in the near future, will provide significant positive momentum for the power plant sector. This outlook stems directly from planned expansions in electricity generation capacity and the forthcoming deregulation of direct power purchase agreements (Direct PPA).
Among the companies within the sector, Gulf Development (GULF) stands out as the most prominent beneficiary, according to KKPS. GULF is the largest private power producer in Thailand, commanding a 27% market share, and also boasts a strong financial position.
Additionally, the construction sector is poised to benefit from a renewed cycle of infrastructure and power plant investments. KKPS estimates that Stecon Group (STECON) is particularly well-positioned thanks to its specialized experience constructing power plants and hyperscale data centers.
Commercial banks are also expected to gain from this trend, seeing potential growth in loan disbursements, fee income, and hedging services related to the energy sector. KKPS names Krung Thai Bank (KTB) as the top-pick stock within the sector, due to its high exposure to property, construction, infrastructure, and service loans, which constitute around 30% of its total loan portfolio.
Adding to those is the industrial estate sector, particularly through the attraction of foreign direct investment (FDI) from companies aligned with global clean energy megatrends.
Kiatnakin views the new PDP as a major turning point that will open up substantial investment opportunities in the energy sector. The main growth drivers include the expansion of the electric vehicle and data center industries, which are expected to nearly double Thailand’s electricity demand from the current 35 gigawatts (GW) to 74 GW by 2050.
Moreover, these investments target compliance with the national policy of achieving net-zero greenhouse gas emissions by 2050. Nearly all new power generation capacity will derive from clean energy sources, which will double the proportion of clean energy in the electricity mix from the current level of 24%.
The new development plan is projected to result in investments exceeding THB 1 trillion. KKPS breaks down the expected capital allocation into three primary segments: 1) expansion of new electricity generation capacity, estimated to require around THB 994 billion; 2) smart grid network upgrades, projecting an additional investment of THB 200 billion to modernize and develop the grid to better manage renewable power fluctuations; and 3) rooftop solar power systems, which, if installed at 10% penetration as per government incentives, could reach up to THB 200 billion in investment (excluding battery energy storage systems).
For the long term, Kiatnakin notes that the government is anticipated to focus on increasing private sector involvement within the energy business. Although Thailand still operates under the Enhanced Single Buyer (ESB) model, a pilot project enabling direct power purchase agreements (Direct PPA) amounting to 2 GW has recently been approved.
This initiative is primarily targeted at data centers and manufacturing sectors. The brokerage expects that this policy will likely expand further in the future, in tandem with continued smart grid development.
