Business / Corporate

J-Power aims to burn more natural gas and wood as Abe fights climate change

by Chisaki Watanabe, Tsuyoshi Inajima and Emi Urabe

Bloomberg

Japan’s biggest electricity wholesaler knows it will take more than cutting-edge coal technology to save the environment.

The Electric Power Development Co., known as J-Power, is looking to build its first major power plant that burns natural gas as well as use more woody biomass instead of fossil fuels, Executive Officer Hitoshi Kanno said.

That is because even the most advanced coal technology isn’t enough for companies like J-Power to meet Prime Minister Shinzo Abe’s emissions goal, he said.

Along with countries across the world, Japan is seeking to cut emissions of carbon dioxide 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 2031. J-Power would be unable to meet the goal without burning cleaner fuel like gas and leftover wood and revamping aging facilities.

“As we heavily rely on coal-powered plants, many people say it’s the most difficult for J-Power to meet the target — and that’s absolutely right,” said Kanno in a Jan. 27 interview in Tokyo. “We would need to replace existing coal plants with more efficient ones, expand the use of biomass fuel and build a gas-fired plant.”

Last April, the trade ministry put in force a regulation that requires power producers to increase the efficiency of thermal generation, defined as energy output divided by 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 ministry report. Some LNG plants have a generation efficiency of more than 50 percent.

Lacking the expertise for procuring liquefied natural gas and the terminals for receiving it, J-Power may need to tie up with companies that have 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 Company Holdings Inc. and Tokyo Gas Co. through pipelines.

J-Power also plans to have woody biomass make up as much as 10 percent of the fuel at a new 600-megawatt coal-fired unit at its Takehara plant in Hiroshima Prefecture 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.

“Japan needs both gas and coal in thermal power generation, as each has merits and demerits,” Kanno said. “It doesn’t make any sense to be cut off from a fuel option in a country without a lot of natural resources.”

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