Tepco wants thermal power partners to pay for modern plants
TOKYO -- Tokyo Electric Power will propose rebuilding three decades-old power plants to a group of prospective partners in fossil fuel power generation.
Replacing worn-out conventional power capacity is crucial for Tepco as it tries to come back from the Fukushima Daiichi nuclear disaster. Companies looking to enter into the comprehensive business alliance that the utility is seeking would be asked to bear part of the cost of the modernization.
Five companies had stepped forward as of the end of May: Chubu Electric Power, Tokyo Gas, Osaka Gas, Kansai Electric Power, and energy group JX Holdings. Tepco will begin one-on-one talks with them this week. The utility will propose forming a joint venture this fiscal year that would tackle updating the trio of plants on a priority basis.
Located in Chiba Prefecture, the three facilities have a combined output of around 9 million kilowatts, the equivalent of nine nuclear reactors. Their equipment is 40-50 years old and inefficient. Building a typical 1-million-kilowatt-class power plant fed by liquefied natural gas is said to cost around 100 billion yen ($982 million).
Tepco's 15 or so fossil-fuel-fired power plants have a total output of about 40 million kilowatts. Nearly half of them have been in service for more than 35 years.
The utility will also propose transferring LNG supply agreements to the joint venture, as well as two LNG terminals, nearby pipelines and other thermal power generation assets. Partners in the alliance would in principle need to transfer related assets to the venture as well. The prospective partners are wary of ceding control of key infrastructure in the Tokyo area, which represents the biggest concentration of power demand in Japan.