Alternative sources of energy for industry are expected to become a major area for corporate investment this year as manufacturers attempt to minimise their use of traditional and expensive oil and electricity.

Although some alternative sources of heat and power continue to cost more than traditional energy, industrial experts believe that with oil prices at US$60 (Bt2,133) per barrel, investment in alternatives will deliver benefits in the long term.

"It's not worth investing in alter-native energy when oil prices are lower than $40 a barrel. But now that prices are up to $60 a barrel, it's practical to consider investing in alternative energy to replace tradi-

tional energy," said Pramote Techasupatkul, president of Siam Cement Group's (SCG) cement operations.

An SCG subsidiary, Siam Cement Industry, is one manufacturer that is concerned about the rising cost of

energy following last year's huge oil

price increases.

It has set aside an investment

budget of Bt2 billion to install a system to generate power from waste heat, which it expects will reduce its electricity costs by 10 per cent to 15 per cent in the following year.

Pramote said the company had

spent as much as Bt1 billion over the

past five years converting parts of its cement plant to run on electricity generated from recycled waste oil, sawdust and farm products like rice husks, coconut and palm shells.

The waste-heat system will recycle heat radiating from machinery in the plant to make steam that will drive turbines to generate power. Siam Cement Industry expects the system to pay for itself within five years of starting up in 2008.

Another company, Siam City

Cement, will spend US$10 million this year to set up a technology platform - which comes from its parent company, Holcim - to recycle such waste as old tyres, plastic and farm by-products. The system is expected to be complete next year.

Siam City Cement's executive

vice president for customer rela-

tions, Chantana Sukumanont, said

70 per cent of the company's costs

came from energy sources such as oil and electricity.

Since the end of last year, global oil prices have risen sharply and the company's production costs have increased by more than 30 per cent.

Switching to alternative energy sources has become a good way to reduce production costs and maintain its margins.

"We believed that the next step for industry in this century was selecting an alternative energy source to reduce costs," she said.

Another SCG subsidiary, SCG Paper, will set aside Bt2.5 billion to install a boiler that uses coal as fuel instead of oil at its plant in the Philippines, as well as introducing energy-saving projects in Thailand.

Its president Chaovalit Ekabut said the projects aimed to reduce energy costs and use natural resources more efficiently.

Tata Steel (Thailand) is also concerned about energy costs and plans to develop an alternative energy source by using farm by-products and waste, according to its president Santi Charnkolrawee.

Kietphong Noichaiboon, chief

executive of Ekarat Engineering,

which installs energy-saving systems, said a manufacturer's initial invest-

ment in alternative energy was huge,

but it is a one-time lump-sum investment.

Afterwards, the company can expect growing, long-term returns from reduced consumption of traditional energy.

At present, some alternative forms of producing energy are cheaper than burning oil.

These include the use of waste

and farm by-products such as rice

husks and corn-crop residues.

However, other forms of alterna-

tive energy, such as solar cells and

wind power, continue to be more expensive.

Kietphong said that following the increase in oil prices, investment in alternative energy had become a good way for industry to reduce costs and remain competitive.

It also helps industries to reduce

pollution.

"Alternative energy will begin a new era for industry," he said.

Chalida Ekvitthayavechnukul,

Somluck Srimalee

The Nation