With the integration of existing thermal power plants of its parents Tokyo Electric Power Company Holdings Inc. and Chubu Electric Power Co. completed on April 1, Jera Co. has completed the last step of unifying the full value chain from upstream fuel and power trading to power generation.

This month Jera, the world’s biggest liquefied natural gas buyer and which controls roughly half of Japan’s total power generation facilities, has outlined goals to transform itself into a global leader in LNG and renewable energy to drive a clean energy economy.

Amid pressure to fight climate change, Jera’s new president, Satoshi Onoda, said the firm will have to fulfill the responsibility of securing a stable power supply and curbing carbon dioxide emissions.

Although the world appears to be taking a hard stance on coal-fired power generation, which emits nearly twice as much carbon dioxide as gas-fired power, in recent years, Onoda said coal will still be an important energy source for Japan to ensure a steady supply.

But the company will strive for a sharper reduction in coal than the government’s target for 2030, which aims to reduce coal reliance to 26 percent of total power generation from 33 percent in 2016.

Jera is currently building new coal-fired power units at its Taketoyo plant in Aichi Prefecture and Hitachinaka plant in Ibaraki Prefecture, in addition to a plan to build new coal-fired units at its Yokosuka plant in Kanagawa Prefecture.

The company also intends to boost its presence as a renewable energy player, especially overseas.

The following is a question and answer session between Onoda and The Japan Times:

Jera is planning to build two new coal thermal units in Yokosuka, despite the growing momentum of divestment and withdrawal from coal-fired power projects in Japan and abroad. Why is Jera going ahead with the new coal units?

We share the same principles as others to realize a low-carbon society. But we think low carbon is a little different from a coal-free society.

The country’s energy plan stresses the need for a well-balanced energy mix with coal characterized as an economical and stable base load power source, and coal needs to account for a certain share of the total power supply.

We have thoroughly explained our Yokosuka coal-thermal development project to local residents and have gained understanding from them. We believe the project matches the country’s energy plan, so we hope to work on at least the Kanagawa units in a sincere manner.

Due to the tightened regulation to curb carbon dioxide emissions, the cost for building coal power plants has been on the rise. Will the Yokosuka units still be cost-competitive compared to gas-fired power?

The government calls for using the best available technology, or BAT, so the Yokosuka units will use the latest ultra-supercritical (USC) technology. Recently built power plants are meeting similar levels of nitrogen oxides, sulfur oxides, etc., so we do not expect a huge rise in costs for this particular project to meet environmental standards.

Will the power generation cost be cheaper than that of gas-fired power which uses LNG as feedstock?

It depends on the fuel costs, which account for a vast majority of costs for thermal power units. So if LNG prices go down considerably, it’s possible that LNG power generation might become cheaper as we operate one of the world’s most efficient gas-fired power plants with a Guinness World Records power-generation efficiency of 63.08 percent.

Won’t creating new coal units hurt your company’s brand image, given that calls for stronger measures for global warming have been growing?

We have a power generation capacity equivalent to half of Japan’s thermal power supply. As Japan’s largest power generation firm, we have the responsibility to supply power while we also recognize a need to fight climate change.

Our approach is to cut carbon dioxide emissions across the whole portfolio. Once the new Yokosuka units, which will employ the latest technology, operate with high efficiency, older coal units will be put on the back burner in terms of order of operation. We may use them when necessary to meet upticks in overall demand, but they would not operate as much as before, so the ratio of coal will decrease as a whole.

Reducing carbon dioxide emissions is an important task in our mid- to long-term goals. We’ll be doing that, for instance, by complementing intermittent renewable energy with flexible LNG-fired power supply.

Meanwhile, we know that some countries in Asia want to use coal. We have made it our mission to deliver the latest solution to energy needs around the world and stand ready to answer and respond to various needs.

Meanwhile, you will also be focusing on renewables. How would you like to shape the image of Jera going forward?

Given that domestic power demand is projected to plateau or inch down from now on, we want to invest in growth areas, especially in overseas markets. In doing so, we believe that there’s going to be an uptick in demand for complementing renewable energy such as offshore wind with highly efficient LNG combined cycle power generation.

Jera is the world’s top LNG buyer and has experience in making large-scale investments around the world. We can combine this with our know-how in power operation and maintenance so that we can offer a package of services to our customers.

As for renewables, is offshore wind the main area to pursue for Jera?

I think we can really take advantage of Jera’s know-how in offshore wind. We want to take part in large-scale projects in other countries as a part of our goal to become one of the leading renewable firms by 2025 with an equity output of 5 gigawatts.

Specifically, what are your strengths that you can use for the offshore wind business?

We have experience in large-scale thermal plant investments and have worked with regulators and local people in various other countries as independent power providers.

Is your renewable business going to be mostly overseas?

Places like Europe and Taiwan are better suited for large offshore wind projects. The sea around Japan suddenly deepens, so further study is needed if it’s possible for us to build hundreds of large-scale floating turbines there.

How about other renewables?

We have acquired India’s ReNew Power Ltd., which operates hundreds of thousands of kilowatts worth of renewable energy. In Thailand, we are involved in solar and wind projects as well, but our presence now is limited.

In Japan, our parent companies basically operate the renewable business, so Jera has no projects for now domestically.

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