Japanâ€™s biggest electricity wholesaler knows itâ€™ll take more than cutting-edge coal technology to save the environment.
Electric Power Development Co., known as J-Power, is looking to build its first major power plant that burns natural gas near cities such as Tokyo as well as use more woody biomass instead of fossil fuels, Executive Officer Hitoshi Kanno said. Thatâ€™s because even the most advanced coal technology on offer now isnâ€™t enough for companies like J-Power to meet Prime Minister Shinzo Abeâ€™s emissions goal, he said.
Along with countries across the world including China, Japan is seeking to cut carbon dioxide emissions and reduce energy consumption to lessen its impact on global warming, with the Abe government adopting an efficiency target for thermal power producers to meet by the year 2031. J-Power would be unable to meet the goal without burning cleaner fuel like gas and left-over wood and revamping aging facilities.
â€œAs we heavily rely on coal-powered plants, many people say itâ€™s the most difficult for J-Power to meet the target â€” and thatâ€™s absolutely right,â€ said Kanno in a Jan. 27 interview in Tokyo. â€œWe would need to replace existing coal plants with more efficient ones, expand the use of biomass fuel and build a gas-fired plant.â€
J-Power shares jumped 5.7 percent to 2,773 yen at the close in Tokyo on Wednesday. Japanâ€™s trade ministry put in force regulation in April last year that requires power producers to increase thermal generation efficiency, a measure determined by dividing energy output with the power plantâ€™s fuel input, to 44.3 percent or more by the year ending March 2031. Existing coal-fired facilities with the latest available technology have a generation efficiency of about 41.5 percent, according to a trade and industry ministryâ€™s report. Some LNG plants have a generation efficiency of more than 50 percent. Without the expertise for procuring liquefied natural gas and the necessary terminals for receiving the fuel, J-Power may need to tie up with other power and gas companies with existing LNG infrastructure to expand its supply of power from natural gas. The new plant may generate several hundred megawatts of electricity, Kanno said, declining to name a potential alliance partner.
The company currently has two small-scale gas-fired power plants with about 100 megawatts each in capacity, both near Tokyo. The fuel is supplied by Tokyo Electric Power Co. Holdings Inc. and Tokyo Gas Co. through pipelines, Kanno said.
J-Power also plans to have woody biomass make up as much a 10 percent of the fuel it uses at a new 600-megawatt coal-fired unit at its Takehara plant in western Japan after it starts operations in 2020, Kanno said. It also aims to burn biomass in tandem with coal, a procedure known as co-firing, at all seven of its coal-powered plants, up from three now, he said. â€œJapan needs both gas and coal in thermal power generation as each has merits and demerits,â€ Kanno said. â€œIt doesnâ€™t make any sense to be cut off from a fuel option in a country without a lot of natural resources.â€