Currently, global community places a high interest on climate change issue which is greenhouse gases emitted by human activities. Therefore, The United Nations Framework Convention on Climate Change (UNFCCC) was founded. From the aforementioned framework of the Convention, guidelines, requirements, and international cooperation are created to continuously reduce greenhouse gas emissions. In addition, the Sixth Assessment Report (AR6) according to the Intergovernmental Panel on Climate Change (IPCC), stated that "Setting a net-zero greenhouse gas emissions target by 2050 is too late to keep global average increase temperature under 2C compared to pre-industrial times. This is where humans are unable to restore the impact of climate change to its original state." The results of the study prompted countries to accelerate their net-zero greenhouse gas emissions targets faster than before.

However, Thailand, as a member of the United Nations, takes part in the National Determined Contribution (NDC) has set the goal of a 40% reduction in greenhouse gas emission by 2030. Moreover, Thailand will move towards Carbon Neutral by 2050 and net-zero greenhouse gas emissions by 2065 which is aligned with Sustainable Development Goals (SDGs) #13: Climate Action. GPSC, as a member of the global community, is committed to providing our full support and collaborating enthusiastically with every sector to achieve the challenging goal of reducing greenhouse gas emissions by adopting the following climate change policy and management approach.

Climate Change Management Approach
GRI 103-2

GPSC has established a climate change policy with the expectation that every business unit throughout GPSC Group's supply chain will adhere to the policy at each step of the project starting from planning, designing, implementing until completion.

Climate Change Policy

Management of climate change is under the supervision of the management committee of the company, which is chaired by the President and Chief Executive Officer, whereby it has assigned the Climate Change and Sustainability Management Department to supervise and oversee the implementation of climate change policies and strategies. Overall roles and responsibilities are as follow:

  • Review and approve solutions strategies, risk factors, opportunities arising from climate change
  • Tracking implementation and projects related to climate change in accordance with the procedure, including business decision-making processes and assigning compensation to relevant departments in accordance with the established structure

In addition, the Corporate Risk Management Division, under the Corporate Strategy and Risk Management Department, is assigned to be responsible for assessing the risks and opportunities of the business in the field of climate change and report back to management team every 6 months in order to monitor and obtain a clear and comprehensive management of climate change in all aspects of business operations.

Climate Change Governance Structure

Due to the trend of using clean energy (Renewable energy), which plays a great role in the electric power business, therefore, GPSC has established a strategy to respond to climate change under the concept of "Move toward low-carbon electricity business and zero greenhouse gas emissions" through technological developments, innovations, and the use of Internal Carbon Price (ICP) to manage risks and seek new opportunities to handle the impacts arising from the change in conditions as follows:

Reduce greenhouse gas emissions from fossil fuel-based electric power generation. Increase the efficiency of the production system and application of new technologies such as Carbon Capture, Utilization and Storage (CCUS), and hydrogen fuel technology

Increase the proportion of electricity generation from renewable energy such as solar and wind energy, both domestically and internationally

Develop power storage technology, battery innovation, and smart grid system to respond to the increase in renewable energy power plants

Carrying out carbon sequestration through reforestation and implementing carbon offset project

Others, such as conducting a study on determining the carbon price within the organization and utilize the results to help make investment decisions in low-carbon technology for the organization

4 Key Action Plans

Reduce Fossil Portfolio
  • Improve energy efficiency
  • Reduce coal Portfolio
  • Adopt Carbon Capture, Usage and Storage (CCUS) technology
  • Adopt Hudrogen (H2) as fuel
  • Adopt best practice operational Excellence
Grow Renewables

Green portfolio optimization, e.g.,

  • Hybrid renewable energy with Energy Storage System (ESS)
  • Green Hydrogen (H2)
Enhance Infrastructure
  • Smart grid, e.g., DR/EMS, micro grid, etc
  • Ennergy Storage System (ESS)
Trading/Offset Activity
  • Biological storage, e.g., reforesting
  • Negative emission texhnology

GPSC operates under the climate change strategy to support changing customer demands and create long-term energy sustainability as well as establishing measures to handle risks and impacts of climate change. GPSC also raises awareness and employee's participation in reducing greenhouse gas emissions within the GPSC group, such as training and educating employees on the carbon price mechanism, participating in climate change risk assessments and opportunities, campaign to reduce energy consumption and resources preservation to create a good culture within the organization.

GPSC Climate Strategy & Disclosure

The production of energy through renewable energy, whether this may be in the form of solar, hydro, wind, and biomass energy, are all non-exhaustive and renewable in nature, where these also only impact the environment to a small degree due to their emission in greenhouse gases of a significantly smaller extent in comparison to the energy produced from fossil fuels.

For these reasons, in order to use non-carbon dioxide energy (Decarbonization), GPSC sees the importance of increasing the proportion of renewable energy production as a driving force for reducing greenhouse gas emissions by supporting the use of clean energy and in moving towards a low-carbon society. This is aligned with corporate strategy S2: Scale-up Green energy, increasing the proportion of clean energy project development from both solar and wind energy, and the integration of renewable energy with energy storage systems. GPSC has long-term goals to increase the proportion of renewable energy by expanding the production capacity to 8,000 megawatts in 2030 both domestically and internationally.

GRI 102-15

In 2021, GPSC assessed the risks and opportunities of climate change, in order to formulate impact measures and create new business opportunities by integrating them into corporate risk management under the operation of Task Force on Climate-related Financial Disclosures to consider two main types of risk assessment which include the risk of physical changes and risks from changes in various fields. In addition, GPSC also shares a risk analysis method for the severity assessment and the probability through the trend forecasting process or Scenario Analysis.

The Climate Change Management and Corporate Sustainability Taskforce has established a comprehensive risk assessment among stakeholders in the value chain, such as business partners (upstream) and customers (downstream), based on the following information:

  • Scientific evidence identifying physical shifts from the Intergovernmental Panel on Climate Change (IPCC) study
  • Report the impact on the electricity business group at the international level
  • Trends in climate change policy formulation in the country to the international level
  • Trends and expectations on climate change of investors and stakeholders

GPSC holds a meeting to consider the identification of internal risks every year to review, monitor, and consider new risks that may arise.

GPSC considers the severity and the likelihood of physical impacts based on a climate change model called the "Representative Concentration Pathway (RCP)". The model is a simulation of the greenhouse gas emissions events referenced in the IPCC's fifth assessment report, divided into four scenarios: RCP2.6, RCP4.5, RCP6, and RCP8.5, showing all four levels of CO2 concentrations affecting radiation on the Earth's surface. This is the forecast result from the implementation of the climate change response policy between 2000 to 2100 of many countries.

GPSC chose the situation RCP4.5 and RCP8.5 in considering the severity, probability, and assessing the potential financial losses from climate change through annual risk assessment meetings Moreover, the severity and risk probability require other scenarios for consideration as well, the company chose to use the country's Nationally Determined Contributions (NDCs) as a reference case.

GPSC has prepared the results of the Physical and Transitional Risk Assessment for the years 2021 and 2026, with the specification of risk issues, impacts, countermeasures, and adjustment as follows:

Ranking of risks with severity and frequency from high to low incidence in 2021 are as follows:
  • Regulations to control domestic greenhouse gas emissions
  • Change in consumer behavior
  • Carbon tax pricing
  • Storm and Lightning
  • Stakeholder groups' expectation
Ranking of risks with severity and frequency from high to low incidence in 2026 are as follows:
  • Regulations to control domestic greenhouse gas emissions
  • Change in consumer behavior
  • Carbon tax pricing
  • Stakeholder groups' expectation
Risk Issues Expected Impact Business Impact Forecasting Approaches to response, adapting, and business management opportunities
Business Impact Forecasting Response Budget Forecasting
Physical Risks
Flood
  • Employees and partners cannot travel to work and deliver the goods, the temporary business suspend in partner groups
  • The flood caused the company to temporarily suspend the business operations
  • In the event that the company ceases operations, there may be damages cost incurred to the power plant and fines for customers or partners, etc.
  • In the case of dams, there will be a problem of increasing sludge. As a result, the efficiency of generating electricity from hydro power has been reduced and increased the chance of damage to the propeller under the dam
65.8 million baht 41.24 million baht
  • Examine, analyze, and review operating areas of the Group of Companies to determine the area and severity that will be affected by the flood disaster
  • Prepare a plan to deal with flooding problems in risk areas. This includes preparing a budget for building a flood barrier and water erosion protection systems in the operating area
Drought
  • The results of a scientific study based on future climate models indicate that Rayong and Chonburi provinces will be moderately affected by drought due to increased rainfall in the future.
  • When the water storage tank has dropped to a shortage level, the company operation will be disrupted due to the lack of water for cooling the power plant
  • The company may need to rent machinery equipment for turning seawater into fresh water for cooling purposes
73.9 million baht 26.7 million baht
  • Install a Reverse Osmosis (RO) system to turn the sea water nearby into fresh water for use during water shortage times
  • Arrange budget to build additional water tank including a rainwater storage system for use in the drought season
Storm and Lightning
  • Case studies from past lightning events of the company, Lightning causes the power transformer to malfunction, causing other damages such as maintenance, damage to the electrical system, and thus interrupting the production process
329 million baht 20.6 million baht
  • Provide a contingency plan to respond after a lightning incident in operating area
  • Develop and study the short circuit protection system from lightning incident
  • Training employees in the operating area and organizing rehearsal for response plans from power failure incidents
  • Follow up and develop the potential of the lightning and power failure countermeasure plan to minimize damage to the supply chain
Rising global average temperatures
  • As the average surface temperature rises, the lower the efficiency of electricity generation will be
  • The cooling efficiency from the water tank is noticeably reduced, causing water usage to increase
  • The water in the warehouse evaporation rate will increase. This may cause water shortage problems.
N/A N/A
  • Continuously monitor machines operations within the operating area
  • Look for new areas to invest, increase the proportion of electricity generation that are not in the area at risk of rising surface temperatures
Transitional Risks
Change in consumer behavior
  • Due to the situation and pressures on reducing greenhouse gas emissions from around the world, as a result, consumers are more interested in using renewable energy to avoid greenhouse gas emissions. If the electricity produced by the company still has a large proportion of fossil energy, this will affect the purchasing volume, decreased satisfaction, and may affect the company's revenue
21 million baht 7,761 million baht
  • The company invests in increasing the proportion of electricity from renewable energy through the acquisition of foreign renewable energy companies, resulting in increased renewable energy production capacity
  • The company invests in research, development, and innovations to support new businesses in the future such as energy storage systems and energy management system
Regulations to control domestic greenhouse gas emissions
  • Thailand is likely to enact regulations to control greenhouse gas emissions within the next 3-5 years, which will directly affect companies in the electricity business. Regarding the compensation reserve for the amount of greenhouse gas emissions that exceed the limit
732 million baht 17,944 million baht
  • The company participated in the voluntary reduction of greenhouse gas emissions activities by increasing the efficiency of electricity generation in the operating area which generates carbon credits for future trading. From these actions, the Company expects to generate revenue as high as 6,000 million baht.
  • The company has set a long-term goal to increase its renewable energy share through the acquisition of renewable energy power plants overseas, including Taiwan, India, and Vietnam.
Carbon tax pricing
  • Thailand tends to enact a carbon tax within the next 3-5 years, which will affect the company due to the proportion of electricity generated from fossil energy, and are likely to face fines from the carbon tax
Stakeholder groups' expectation
  • Major international investors expect the company to have a serious climate change impact management plan. If the company still have a proportion of fossil energy, may cause investors to withdraw their investment from the company
1,500 – 2,000 million baht 3,650 million baht
  • The company participated in the assessment of low-carbon and sustainable business indicators operated by the Greenhouse Gas Management Organization and was selected as one of the 4 companies that received "Excellent" level assessment through outstanding climate change action. This will build trust among stakeholders related to the company

GPSC has studied internal carbon pricing (ICP), which determines the value of greenhouse gas emissions of an organization in a monetary form to be applied to drive climate change actions in organizations, including preparing for climate change risks and impacts, setting greenhouse gas emissions reduction targets and using such as a basis for new investment projects consideration in the future, in order to be used as a mechanism to drive action towards long-term low-carbon operations. GPSC was selected as one of the first six companies to receive technical support from the Thailand Greenhouse Gas Management Organization (Public organization), as well as having cooperated with the World Bank in potential development, establishing and applying in-house carbon-pricing mechanisms (ICP) appropriate to the context and strategies of the organization, while also fostering environmentally friendly investments, where at present, GPSC has set operational guidelines in 3 activities as follows:

The use of "Shadow Prices" to assess the risks and effects of the carbon price on the future earnings of the company

Shadow prices are used as a base for project investment decision-making (CAPEX)

Using the carbon price as one of the decision criteria for the operating costs (OPEX)

GPSC has set up a team and committee responsible for the carbon price study project in the organization with the objective of planning and monitoring the implementation of the corporate carbon price, in order to be suitable for business operations, as well as assessing the financial situation and investment guidelines (Green finance). GPSC has also expressed its opinion on the development of operational guidelines to further strengthen its in-depth knowledge of carbon pricing, as well as other financial instruments.

Additionally, GPSC plans to establish carbon prices in the organization for a period of 10 years, with having started planning from 2020 and laying out the appropriate action guidelines within the specified period by applying the carbon price mechanism in the organization in the 3 following forms: Prices determined by the amount of money the company uses to reduce greenhouse gas emission (Implicit price), the hypothetical price of greenhouse gases (Shadow price), as well as including the determination and collection of greenhouse gas emission fees of each business unit in the organization (Internal carbon fee/ Internal trading system) to benefit and cover greenhouse gas emissions in every emission scope as follows:

Short-Term (2021-2022) Long-Term (2023-2030)
ICP Objectives
To increase internal capacity and learn to apply internal carbon pricing
Reduce the company's greenhouse gas emissions and used for investment decisions to increase the proportion of renewable energy
Coverage Scope of GHG Emissions
Direct Greenhouse Gas (Scope 1) and Indirect Greenhouse Gas (Scope 2)
Direct Greenhouse Gas (Scope 1), Indirect Greenhouse Gas (Scope 2) and other Indirect Greenhouse Gases (Scope 3)
Coverage Scope of ICP
Investment Decision
Investment Decision
Operation Decision
ICP Approach
Implicit Price
Shadow Price
Shadow Price
Internal Carbon Fee / Internal Trading System

In the years 2021-2022, GPSC takes the shadow price into consideration in making decisions for new investments that cover greenhouse gas emissions in Scope 1 and 2 through synergies between other business groups related to the electricity business. In addition, GPSC plans to develop tools to expand in-house greenhouse gas emissions storage plans and the Marginal Abatement Cost Curves to strengthen our ability to recover from the impacts of climate change and achieve the long-term goal of reducing greenhouse gases that the company has set.

In 2021, GPSC participated in the Low Carbon and Sustainable Business Indexes (LCSi) assessment, which is conducted by the Greenhouse Gas Management Organization (Public organization) and referred to a measure of businesses that take action in solving climate change problems by utilizing mechanisms in effectively reducing greenhouse gas emission, while also taking into account the three dimensions of balance: economy, environment and society. GPSC also manages and reduces greenhouse gas emissions in accordance with the sustainable development goals of the country, which can be considered a good example to follow for other organizations. Furthermore, in 2021 GPSC also was selected as one out of four companies to have received an "excellent" rating through outstanding climate change actions, whether it was in the reduction of greenhouse gas emissions, product life cycle assessment (Life Cycle Assessment or LCA), preparation of the Carbon Footprint Product (CFP), participation in the Voluntary Emission Reduction Program in accordance with Thailand's standards (Thailand Voluntary Emission Reduction Program: T-VER), supporting the sustainable development goals, which includes achieving zero-waste to landfill targets, etc. These show that the company has tackled a group of issues affecting the company itself and its stakeholders in regards to numerous matters, which cover all aspects of sustainability as follows:

Energy Mix
Emission Reduction
Contribution to Decarbonization
Innovation
Decentralized
Disruptive Technology
Energy Policy & Regulation
Customer's Ability to Control and Make a Choice
Customer Data and Information Privacy
Natural Disasters
Efficiency of Operations
Workforce Planning
External Transparency to Build Credibility
Internal Communication
Training for Current Employees
Diversity and Equal Opportunity
Labour Rights
Board of Directors
Code of Conduct
Crisis and Risk Management
Personal Safety and Health
Waste
Community Relationship
Community Involvement and Development Project to Improve Livelihood
Manage Supply Risks
Leverage Opportunity with Suppliers and Contractors
Supplier Rights

GPSC joined and was selected as a member of the Thailand Carbon Neutral Network (TCNN) committee to promote cooperation between the government, the private sector, and the local/community sector. To continue reducing greenhouse gas emissions to create sustainable growth in a climate-friendly society, and aiming to achieve zero net greenhouse gas emissions following the international community as reflected in Thailand's goals on climate change. The new cooperation builds demand for carbon credits from the T-VER project that will promote the expansion of the domestic voluntary carbon market with more liquidity. GPSC foresees that this participation will benefit from the exchange of knowledge between members in the feasibility study, readiness potential, operating guidelines, announcement of corporate carbon neutral targets, and enhance the joint benefits of sustainable development from activities and projects to reduce greenhouse gas emissions, especially at the local and community level through cooperation with private businesses in the network, for example, by joining forces to support natural activities that help absorb carbon dioxide.

In addition, GPSC has also joined the Carbon Market Club network and the RE100 Thailand Club, which is an important step as an energy business group in campaigning for greenhouse gas reduction activities and show social responsibility to demonstrate readiness toward a low-carbon society and zero greenhouse gas emissions, discussions within the member group regarding carbon credit and renewable energy credit (I-REC) trading. This also includes news awareness, registration, and policies related to climate change as well.

1. Partner Group

GPSC has established a procurement policy that is environmentally friendly and sustainable partner management policies by determining specific qualifications in selecting partners, such as the use of clean energy in the working area, production efficiency, and proper waste management and recycling by having all trading partners who in business with the company review and sign for acknowledgment and compliance with the requirements. This is to encourage partners to respond to environmental and climate change management issues and disclose information transparently. In 2021, all partners have signed acknowledgment in every code of conduct to push for climate change management and environmental responsibility as well as collecting useful information for the company's annual performance report.

2. Customer Group

As more energy demands shift towards renewable energy, GPSC is continually expanding its renewable energy capacity to meet consumer demand and move towards a low-carbon society. In 2021, GPSC installed more than 873.84 KWp of rooftop solar power generation systems for customers, which can reduce greenhouse gas emissions in Scope 2 by approximately 725 tons CO2 equivalent per year. Moreover, a floating solar power generation system is also installed and can meet the needs and satisfaction of the customers. By effectively utilizing space management, reducing the evaporation rate in the customer's water tank, it can reduce greenhouse gas emissions by up to 830 tons of carbon dioxide equivalent per year. Finally, GPSC recognizes the importance of providing opportunities for renewable energy for customers and sets a target to reduce greenhouse gas emissions by more than 1,555 tons of carbon dioxide equivalent per year.

3. Alliance Partner Group

GPSC focuses and promotes open innovations with alliance partners by emphasizing the knowledge integration both internal and external to jointly develop innovative energy storage systems to complement key components of renewable energy system installations. This is a critical requirement to optimize the performance of renewable energy systems. In addition, GPSC is committed to being a leader in energy storage systems manufacturing and its main purpose is to deliver to renewable energy power plants both in and outside the country to meet the rising demands for renewable energy within other business groups.

4. Community Group

GPSC cooperated with the PTT Group in developing Smart Farming projects with the aim to promote career creation for people in the community, knowledge/experience exchange conveyed by the company's employees, and support the installation of renewable energy for pumping and electrical system within the farmland. This is to reduce greenhouse gas emissions in the agricultural sector and also develop beneficial skills for people living in remote communities to have access to new technology applications from renewable energy.

Updated as of February 2022

The content above is based on sustainability reporting standards by The Global Reporting Initiative (GRI Standards), and externally validated and verified for accuracy of the reporting data at the "Limited Assurance" level

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