<article><p class="lead">The developers of a new power plant complex at Sodegaura in Japan have switched the planned fuel source to gas, rather than a mix of coal and biomass, after tougher regulations made the original plans unprofitable.</p><p>Utility Kyushu Electric Power, gas retailer Tokyo Gas and oil refiner Idemitsu have been working to build two 1GW coal-fired power generation units at Sodegaura in Chiba prefecture since May 2015. The three firms set up an equally owned joint venture, Chiba Sodegaura Energy, and are targeting a start-up by the mid-2020s. </p><p>The companies had originally planned to use ultra super-critical (USC) technology and a mix of coal and biomass as generation fuels to help ease the project's environmental burden. But stricter rules introduced under Japan's energy conservation act have prompted a re-evaluation of the business plan, resulting in the fuel change. </p><p>The new regulations, which took effect in April 2016, require a power producer to achieve 44.3pc generating efficiency based all its thermal units by 2030. But the generating efficiency of the USC technology that Chiba Sodegaura Energy planned to use is estimated at only around 40pc. This implies the venture would have to increase the share of biomass in the co-fired units, requiring additional investment. </p><p>Rising purchase costs of biomass have also discouraged the venture from pushing the plan forward, Tokyo Gas said. </p><p>Kyushu and Tokyo Gas will instead consider building a 2GW power generation plant using regasified LNG at the same site, which is located next to Idemitsu's existing coal terminal in Tokyo bay. Idemitsu will not join the discussions and instead will only lease the land, which is also adjacent to Tokyo Gas' Sodegaura LNG import and regasification terminal. </p><p>The companies are also planning to dissolve the joint venture firm, although it is unclear when this will be happen. </p><p>Tokyo Gas is Japan's largest city gas supplier by volume, selling 10.6bn m³ in April-December, the first nine months of its 2018-19 fiscal year. This was down by 2.7pc compared with the same period in 2017-18, pressured by higher temperatures. </p><p>But Tokyo Gas boosted its power sales by 4.8pc to around 11mn MWh over the same period, with retail sales increasing by 47.5pc to 4.3mn MWh. The company's power sales have been gradually rising since April 2016, when Japan deregulated its retail electricity market. </p><p>The market liberalisation has also had a big impact on Fukuoka-based Kyushu Electric, which has long enjoyed a monopoly of the regulated power market in the Kyushu region but has now been pushed to diversify into new areas such as the lucrative Tokyo bay region. </p><p>Kyushu sold 53.4mn MWh of electricity in April-December, down by 5pc from a year earlier. Thermal power output fell by 31.7pc to 20.7mn MWh, while nuclear generation rose by 68.6pc to 19.9mn MWh.</p><p>Kyushu used 1.58mn t of LNG in the nine-month period, down by 38.3pc from a year earlier, while its coal consumption fell by 17.8pc to 3.66mn t.</p></article>
