There is a plan to build a power plant adjacent to the LNG terminal of Tokyo Gas (Sodegaura City, Chiba Prefecture)
Kyushu Electric Power will withdraw from the construction plan for a liquefied natural gas (LNG) thermal power plant in Chiba Prefecture, which is being promoted with Tokyo Gas. It was planned to build a power plant with an output of 1.95 million kW in 2028. It was judged that the investment burden could not be recovered because the profitability of the electricity retail market deteriorated due to the soaring fuel prices.
The country completely liberalized electricity retailing in 2016 and has promoted competition among electric power companies with new entrants. There are a series of new plans for power plants, but fuel prices have been prolonged due to the crisis in Ukraine, and there are continuing moves to revise the plans. The focus will be on the stable supply of electricity in light of the drastic changes in the international situation.
Kyuden will hold a board meeting within the week and decide to withdraw. It invested hundreds of billions of yen together with Tokyo Gas and positioned it as the main power source for electricity retailers in the Tokyo metropolitan area, but due to the deterioration of the business environment, it is no longer possible to recover the investment.
Tokyo Gas will maintain the plan alone. The company is increasing the number of customers by selling gas and electric power as a set, and it is judged that it will be possible to expand business opportunities if it has its own large power supply. In the future, we will reassess whether we can withstand the investment burden alone. Consider using hydrogen as part of the fuel. Depending on profitability, the scale may be reduced.
Electricity supply and demand is a tightrope walk. The Ministry of Economy, Trade and Industry estimates that the output of thermal power generation will decrease by about 13 million kilowatts in the 10 years from FY21 to FY2018. This is because major electric power companies are proceeding with the abolition of power plants. The restart of nuclear power plants has also been delayed.
The reserve margin, which indicates the margin of power supply in January 2011 within the TEPCO Holdings jurisdiction, is minus 0.6% in severe winter. It is expected to be negative for the second consecutive year, greatly interrupting the 3% required for stable supply. The 6 areas of western Japan from central to Kyushu are also only 1.3%.
The profitability of the electric power industry is also declining. The 10 major companies have absorbed high costs through a system that passes on the increase or decrease in fuel costs to the tariff. Unexpected fuel prices have been heard since last fall, and by July, the upper limit for seven companies to pass on has been reached. The government has just begun discussions on reviewing the system. The development of a "capacity market" that imposes the burden of investment on thermal power plants on new electric power is also underway.
The withdrawal of Kyuden highlights the situation of relying on the private sector, as the system cannot keep up even when the national power supply becomes unstable.
