Business / Corporate

Kansai Electric, TonenGeneral to build large coal-fired power plant near Tokyo

Kyodo

Kansai Electric Power Co. will build a large coal-fired power plant in Chiba Prefecture jointly with major oil firm TonenGeneral Sekiyu K.K., in a foray into the capital region made possible by market liberalization next April, sources familiar with the matter said Sunday.

The 1,000 megawatt plant, almost equivalent in output to a nuclear reactor, will be built adjacent to a TonenGeneral refinery in Ichihara, the sources said. The plant is expected to come online in the mid-2020s and will cost hundreds of billion yen.

Through its subsidiary Kanden Energy Solution Co., the Osaka-based utility will set up a company with TonenGeneral to oversee the project, the sources said.

A portion of the electricity output is expected to be sold to Tokyo Electric Power Co., and the rest to corporate and household customers.

The nation’s retail electricity market has traditionally been monopolized by the 10 regional power companies, but is set to open up to competition in April next year. Kansai Electric is pursuing ways to supply electricity beyond its service area in western Japan, chiefly targeting the Tokyo metropolitan region.

Expecting growing demand in the northeast area currently served byTepco, Kansai Electric also plans to build a 1,300 megawatt coal-fired power plant in Akita Prefecture in partnership with trading house Marubeni Corp., and a smaller coal-burning plant in Sendai.

Kepco is also looking to collaborate with Tokyo Gas Co. on a separate power plant project and on procurement of fuel.

Other regional utilities have similar expansion plans.

Chugoku Electric Power Co., based in Hiroshima, plans to build a coal-fired power plant in Chiba in alliance with JFE Steel Corp. and Tokyo Gas, while Kyushu Electric Power Co. has a similar plan with Idemitsu Kosan Co. and Tokyo Gas.

And Chubu Electric Power Co., which currently serves Nagoya and other areas in central Japan, plans to build a 650 megawatt coal-fired power plant in Tokai, Ibaraki Prefecture, jointly withTepco.