Tepco-Chubu deal for 10 GW of replacement fossil capacity in the pipeline

• 9 years ago (2014-09-19)
• Junior Isles

Asia 848

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Tokyo Electric Power Co (Tepco) is likely to join with Chubu Electric Power Co as its ‘preferred partner’ in discussions on a new generation joint venture to replace Tepco’s 10 GW of ageing fossil fuel-fired plants, according to local media sources.

Tepco had previously been in talks with Tokyo Gas, Kansai Electric Power Co, Osaka Gas and JX Holdings regarding a possible joint partnership, but a Tepco-Chubu deal now looks most likely.

Tepco and Chubu are aiming to agree terms of the deal by the end of March, and any partnership is likely to see new generation assets held on an equal basis, said sources close to the deal.

The utilities are expected to back joint procurement of between 35 million and 40 million tonnes per year of liquefied natural gas (LNG), and both the construction and operation of new fossil fuel-fired generation plants to replace Tepco’s ageing fleet.

Tepco is the world's second-largest LNG buyer, after Korea Gas Corp, and currently purchases roughly 25 million tonnes every year, while Chubu Electric, the world's third-biggest LNG buyer, takes in around 14 million tonnes a year.

Tepco and Chubu Electric are the dominant electricity suppliers in Japan's first and third-largest economic regions, but the potential deal is further indication of a post-Fukushima trend of cooperation between Japan’s power utilities, and the state itself , and a move away from rigid local and regional power monopolies.

Spokespeople at both Tepco and Chubu Electric declined to comment regarding media reports on the deal.