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Business

Small geothermal plants gaining steam in Japan

Higher power prices, less red tape encourage businesses to tap massive reserves

A Kyuden Mirai Energy geothermal plant in Kokonoe, Oita Prefecture.

TOKYO -- Japanese companies are building small-scale geothermal power plants that can be completed in half the time needed for larger facilities, thanks to a more generous feed-in tariff that has made such projects more profitable.

A joint venture by JFE Engineering, Mitsui Oil Exploration, the government-backed Japan Oil, Gas and Metals National Corp., and Japan Metals & Chemicals will break ground on a roughly 7-megawatt geothermal plant in Iwate Prefecture next month. The facility, expected to cost 8.5 billion yen ($75.8 million), is slated to begin operation in 2018.

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