OSAKA -- Air Water, an industrial gas supplier, will build one of the biggest biomass power plants in Japan in terms of output, with the startup date slated for 2020.
The facility, which will likely cost around 20 billion yen ($181 million), will be capable of producing 75,000kW of electricity. The scale will be on a par with a Fukuoka Prefecture plant planned by power producer eRex and a Kyushu Electric Power subsidiary, and another plant currently being built by Sumitomo Corp. in Aichi Prefecture.
Osaka-based Air Water's plant is expected to be the largest domestic power generator that solely relies on biomass fuel. The combustible material will be made up of coconut shells produced as waste product by palm oil factories in Indonesia and Malaysia, as well as wood pellets from Southeast Asia, North America and other places.
The company is looking at utilizing the feed-in tariff system for renewable energy and selling the electricity mainly to Tohoku Electric Power. Biomass power generators that consume coconut shells and imported material can currently sell 1 kilowatt-hour of electricity for 24 yen for two decades, a deal that promises a steady earnings stream.
Depending on market prices for electricity and other factors, Air Water may also sell power to newer retail electricity providers or use it in group operations.
The plant will be built in Fukushima Prefecture on a site formerly occupied by a salt-manufacturing facility. Subsidiary Nihon Kaisui suspended operations at the plant in Onahama due to the effects of the 2011 tsunami. The seawater pollution originating from the disaster at Tokyo Electric Power Co. Holdings' Fukushima Daiichi power plant also played a role. Nihon Kaisui eventually decided to shut down the plant permanently, paving the way for the biomass facility pending an environmental assessment.
Air Water also has a fossil-fuel plant in the works that will burn biomass mixed with coal. The facility will be built in Yamaguchi Prefecture in a joint effort with Chugoku Electric Power.