Japan's TEPCO May Need More Carbon Credits
Date: 27-Jun-08
Country: JAPAN
Author: Osamu Tsukimori and Kentaro Hamada
The shutdown of the world's largest nuclear plant in July last year was also going to cost the company more than initially expected in alternative power generation fuels due to surging prices of oil, said Masataka Shimizu.
TEPCO has worked its gas and oil-fired power plants harder to compensate for the Kashiwazaki-Kariwa nuclear plant shutdown, which has helped cause its CO2 emissions to jump 30 percent to 127 million tonnes in the year ended in March.
If the Kashiwazaki plant is kept shut for one whole year to March, that would have the impact of raising TEPCO's CO2 emissions by 30 million tonnes, 7 million tonnes more than the past business year.
In line with industry targets, TEPCO aims to cut its CO2 emissions by 20 percent per kilowatt-hour of electricity on average in the five business years that started in April.
"The impact of the Kashiwazaki-Kariwa plant is big, but we believe it's essential to achieve the goal," said Shimizu, who was officially promoted to the top post on Thursday following a general shareholders meeting.
But the firm's CO2 emissions jumped to around 0.425 kg in the year ended in March from 0.339 kg the year earlier, marking a 12 percent rise from the 1990 level.
If the restart of the nuclear plant is delayed, it could prompt TEPCO to increase purchases of carbon dioxide emission credits through the UN Clean Development Mechanism (CDM) and Joint Implementation (JI) programmes.
TEPCO has secured at least 8.8 million tonnes of CDM credits in total, but it does not reveal carbon purchase plans due to their potential impact on the market.
TEPCO does not reveal expenditure on carbon credits, either, but the 8.8 million tonnes is worth around US$380 million based on the European carbon prices of 27.65 euros a tonne.
"To complement (the CO2 goal), we would also like to buy CDM and JI, taking into account cost," Shimizu said. "Through a combination of these, we would strongly aim to achieve the voluntary 20 percent cut goal."
Shimizu added that the additional fuel purchase cost due to the shut nuclear plant was expected to top the initial projection of 300 billion yen (US$2.78 billion) in the first half to September, due to record oil prices, but declined to say by how much.
To counter these costs and cut carbon emissions, Shimizu is looking at raising the efficiency of other nuclear plants and at alternative energy sources.
"First is to raise the utilisation rate of nuclear plants including Fukushima plants, to the highest possible degree," he said. "Improving thermal efficiency is also important, so we have also started introducing 1,500-centigrade MACC."
MACC stands for a more advanced combined cycle power generation, which TEPCO introduced last year, in which the temperature at the entrance of the gas turbine will rise to about 1,500 degrees Celsius (2,732 Fahrenheit).
This allows heat efficiency of 59 percent, among the world's highest, an improvement of about 40 percent over a traditional unit.
TEPCO has boosted its purchase of surplus electricity from customers who have solar and wind-power facilities, but Shimizu said the company needed to accelerate efforts on new energy.
In May TEPCO said it would build its first wind farm west of Tokyo, but still does not have a solar power generation plant.
"We will actively consider what to do with our solar facilities," Shimizu said.
Most analysts expect the Kashiwazaki plant to remain closed at least until next year, although TEPCO has not set a target restart date pending approvals from both the central government and local governments.
(US$1=107.96 yen)
(Reporting by Osamu Tsukimori; Editing by Michael Urquhart)