HomeNewsJapan's JERA to invest $32 B in LNG, renewables, new fuels over next decade

Japan's JERA to invest $32 B in LNG, renewables, new fuels over next decade

5/16/2024

TOKYO (Reuters)—Japan's top power utility JERA said on Thursday it plans to invest 5 T yen ($32.4 B) over the coming decade into renewable energy and new fuels such as hydrogen and ammonia, as well as liquefied natural gas (LNG).

By fiscal year 2035, Japan's top LNG buyer is targeting over 35 metric MMtpy of LNG transaction volumes, keeping the current levels. JERA also wants to boost renewable energy capacity to 20 gigawatts (GW) from 5 GW now and handling volume of hydrogen and ammonia to 7 MMt from none now.

"Without a certain LNG handling scale, it will be difficult to have a global presence that can constantly bring flexible supply to Japan," Chairman Yukio Kani told reporters. JERA wants to secure stable LNG supply for Japan and elsewhere in Asia and provide solutions to address fluctuations in demand for the fuel while maintaining market share, Kani said.

Each of the three focus areas would receive 1 T to 2 T yen in investment over the decade, JERA said, with carbon dioxide (CO2) emissions falling by at least 60% from 2013.

JERA, an unlisted company co-owned by Tokyo Electric Power and Chubu Electric Power said net profit should reach 350 B yen by fiscal 2035, up from the expected 200 B yen profit in fiscal 2025.

Hisahide Okuda, JERA's president, told the same briefing that the company continued to weigh options for a capital increase, which included its current shareholders, third-party allotment and initial public offering.

He also said JERA may revise power sources development plans to prepare for a potential rise in electricity demand amid expansion of data centers, AI and the return of the semiconductor industry to Japan.

At the same time, JERA plans to phase out inefficient coal-fired power plants by fiscal 2030 and convert all other coal-fired power generation to ammonia by the 2040s to eliminate coal completely, it said.

JERA is conducting a demonstration of co-firing 20% of ammonia with coal at its Hekinan thermal power station in central Japan. Okuda said the result so far has been good.

"We want to build a clean energy platform by combining zero-emissions thermal power with renewable energy, and expand it to Asia," Okuda said.

"But for now, expanding the use of LNG, instead of coal, in elsewhere in Asia is key to promoting a low-carbon society," he said.

($1 = 154.2600 yen)

(Reporting by Yuka Obayashi and Katya Golubkova; Editing by Varun H K and Tomasz Janowski)

 

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