Tokyo Gas and Kyushu Electric Power are looking at building an LNG plant with a power generation capacity of about 1 gigawatt, with total investment reaching roughly 100 billion yen ($900 million) and operations to start in the 2020s. They originally planned for an ultramodern coal plant costing around 300 billion yen with a capacity of roughly 2GW, built on idle land owned by oil distributor Idemitsu Kosan in Chiba Prefecture's Sodegaura -- just across Tokyo Bay from the Japanese capital.
Using LNG, which is more expensive than coal, would mean greater operating costs in the long run. Tokyo Gas could also run into additional costs, such as for building a gas pipeline from its nearby LNG receiving terminal to the site of the plant. The utility will study the plan's economic viability over the next one to two years. Idemitsu, which has interests in coal mines around the world, may back out if the LNG plan goes forward.
Because gas turbines start up faster than coal boilers, LNG is considered a better option to supplement volatile renewable energy sources. Tokyo Gas is also eager to build its own power stations to ramp up its electricity retailing operations in the Kanto region that includes Tokyo.
Coal-fired power plants have fallen out of favor with Japan's environment ministry and other authorities because of emissions concerns, and financial institutions are growing wary of lending to coal-related businesses.
Plans for two major Japanese coal plants have recently been called off. In March 2017, the former TonenGeneral Sekiyu -- now part of merged company JXTG Holdings -- canceled a power station it had been planning to build with Kansai Electric Power. This April, Shikoku Electric Power likewise scrapped plans for a coal-fired plant in the northeastern city of Sendai.
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