Somruedee Chaimongkol has been leading Thailand’s largest coal producer and power generator, Banpu, since 2015. Amelia May, Senior Associate at HC Group, speaks to Chaimongkol about diversity and inclusion, energy transition, and the opportunities facing Banpu.
Over the past six years, Somruedee Chaimongkol, has set out a plan to transition Banpu towards greener, renewable energy, with a vision of ultimately balancing the core coal mining arm with more sustainable alternatives. Chaimongkol hopes that more than half of Banpu’s ebitda will come from its greener energy and energy technology portfolio by 2025, including increasingly from its fast-growing power trading business.
A rare female CEO in the commodities sector, 59-year-old Chaimongkol joined Banpu in 1983 as a receptionist and the company’s 13th employee. Now, she is at the helm of a $2bn business rapidly embracing digitisation, renewables, natural gas and energy technology. Here, she talks to Amelia May, Senior Associate at HC Group about the challenges and opportunities facing Banpu.
Amelia May: Could you please start by telling us a bit about your career at Banpu, and how you came to be in the CEO role?
Somruedee Chaimongkol: I graduated from Bangkok University with an accounting degree and joined Banpu in 1983, the year it was formed, as a company receptionist. I moved into the finance department in 2001, became Chief Financial Officer in 2006 and Chief Executive in 2015. Now, my focus is on driving a Greener & Smarter strategy for Banpu, with the aim of providing smarter energy for sustainability for all.
Being a top female executive in the energy sector has never worried me. For me, the most important thing is to strive to learn and develop continuously. That way, we can become great leaders, with vision and achievement.
Having worked at Banpu since its inception, I’ve been lucky to experience many great learning opportunities. I’m very grateful for the trust and respect I have received from my mentors throughout my career, including Chanin Vongkusolkit, who is one of Banpu’s founders, and other colleagues, business partners and stakeholders.
AM: What do you consider to be your greatest achievement at Banpu, since becoming CEO?
SC: Our radical transformation from a coal company to a leading international versatile energy provider is what I am most proud of. We have kickstarted our Greener & Smarter strategy in the past five years, across our three core business groups of energy resources, energy generation and energy technology.
In energy resources, we have established a strong foothold in lower-carbon shale gas production, and we are now a top 20 US shale gas player. In energy generation, we have substantially grown our renewables portfolio across Japan, China, Vietnam and Australia, to reach a committed capacity of over 1,000 MW. And then in energy technology, Banpu has launched five Smart City projects in Thailand and diversified into smart energy businesses like e-mobility solutions, including ride-sharing apps to advance the clean vehicle fleet, and the launch of Thailand’s first e-ferry. We have also diversified into virtual power plants, energy trading, lithium-ion battery manufacturing and a digital platform for waste management solutions.
The other thing that we have done that I’m really pleased with is established Banpu NEXT, which is a smart clean energy solutions provider. With that, we are working towards our goal of Banpu’s greener businesses comprising more than half of our ebitda by 2025.
Digitisation has been paramount in facilitating these initiatives and we want our people to be at the forefront of that evolution. We are investing in the fundamental upskilling needed to smoothly implement digital initiatives through our Digital Centre of Excellence, the Banpu Digital Academy and our Digital Capability Centre.
AM: Where do you see Banpu in five years’ time?
SC: Banpu has been going through a major transformation to create an international versatile energy provider. We have set out a five-year strategic plan where our goal is for our greener energy portfolio to contribute more than half of total ebitda, which we’ll do by investing in several projects including solar power plants, wind power plants, solar rooftop and gas power plants, and energy technology.
We’ve been diversifying beyond coal and thermal power to expand rapidly in renewables, gas – as a bridging fuel – and energy technology.
Currently, our energy trading business in Japan has progressed well, to the point where we have a total electricity generation capacity of 305 GWh. We plan to more than triple that in the next four years. Our greener portfolio includes energy trading, which is a key part of our plan.
But while we don’t currently have much business expansion in coal, it is still our responsibility to continue to provide our products and services to our coal customers while implementing a reduction in carbon emissions in our coal business. We’ve been developing and using our mine areas to support renewable power generation projects. For example, in Australia, we have been developing solar power plants to eventually provide 100% of the electricity supply to all operating coal mines and supply to the main grid where possible.
Looking at global energy demand, by 2030 coal will still be about 25% of the total. But it will be a smaller proportion of our portfolio long term.
AM: How do you see Thailand’s Emissions Trading Scheme developing going forward?
SC: The Thai government established the Thailand Greenhouse Gas Management Organisation in 2007 to implement and manage greenhouse gas emission projects. With an ambitious emissions reduction target in its commitment under the Paris agreement, Thailand has started shifting the focus of its energy policy to energy efficiency and clean energy transition. Putting a price on carbon would greatly accelerate progress towards the target in a cost-effective way.
However, while Thailand has some experience of creating voluntary carbon markets, and is currently considering a national emission trading system, it does face a number of hurdles. Those include issues with preparing stakeholders for emissions trading, including the power sector in the emissions trading, and integrating emissions trading into an array of existing policies.
We are looking for an opportunity to build on this in our ecosystem to create value though. Thailand’s voluntary trading scheme is going to be active in the next few years, as most of the big companies have recently announced their own carbon neutral targets.
AM: What would your message be to other young women starting out in the commodities sector?
SC: Over the last few decades, Banpu has developed from a Thai company into a global business, and we put a lot of focus on diversity. It is our culture to be humble – embracing differences and respecting people of all genders, generations, nationalities, ideas and cultures. Although we operate in 10 countries across the Asia Pacific, we are united by the same mentality, and we believe diversity makes our synergy even stronger. I think that kind of approach and ethos is what attracts female talent.
I truly believe there are as many opportunities for young women today as there are for young men. My message to others would be don’t be afraid and try to be equipped with versatile knowledge both within and outside the energy sector. Always keep yourself up to date, which means upskilling and reskilling is essential. And always look ahead, be friends with the trends, and be resilient to change. In short, make sure you are well-prepared for any opportunities that are out there.
AM: Finally, as the world emerges from the Covid-19 pandemic, what opportunities do you see arising from the crisis?
SC: We have faced plenty of challenges over Banpu’s almost four decades, and we see those challenges as providing room to grow and reconsider some of our old business practices.
When dealing with a crisis, it is important to focus on your people. We need good, capable people in our business in order to expand vigorously, so we have focused on growing our people by upskilling, reskilling and recruiting new talents to keep up with new business settings and a new ecosystem.
Externally, we are responding to the global energy trends and changing customer behaviours that we see around us, and we see those evolutions as great growth opportunities for our business.