Tokyo Gas Buys Into Renewable Energy

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Researched by Industrial Info Resources East Asia (Kofu-shi, Japan)--The renewable energy trend is likely to accelerate in Japan as the country recovers from the nuclear disaster at Fukushima Daiichi nuclear power station owned and operated by Tokyo Electric Power Company Incorporated (TYO:9501) (TEPCO) (Tokyo). Wind power has been largely neglected in Japan mainly due to aesthetics and issues with land availability, but wind power as well as other types of renewables are likely to become more wide spread. On April 20, Tokyo Gas Company Limited (TYO:9531) (Tokyo), Japan's largest natural gas utility, formally announced its intentions to make a serious venture into renewable energy via wind power.

Tokyo Gas serves the prefectures of Tokyo, Kanagawa, Saitama, Tochigi, Ibaraki, Gunma, Chiba, Yamanashi, and Nagano with residential natural gas (n/g), or city gas, and liquefied petroleum gas (LPG). It also supplies several thermal power stations owned by TEPCO with liquefied natural gas (LNG). The company is already involved in the development of residential hydrogen fuel cells with Panasonic Corporation (NYSE:PC) (Osaka, Japan) and Ebara Ballard Corporation, a joint venture between Ebara Corporation (TYO:6361) (Tokyo) and Ballard Power Systems (NASDAQ:BLDP) (Burnaby, British Columbia). Tokyo Gas also operates an LNG-fired power station just to the south of Tokyo in Yokohama, Kanagawa prefecture, in association with Showa Shell Sekiyu Limited (TYO:5002) (Tokyo).

In light of the recent power emergency brought about by March 11's earthquake and subsequent nuclear crisis, Tokyo Gas announced on April 20 that it had purchased approximately 30% of the shares of Shonai Wind Power Generation Company Limited, an affiliate of Hitachi Limited (NYSE:HIT) (Tokyo). Shonai Wind Power operates two wind farms in Yamagata prefecture, located in the Tohoku region. Tohoku Electric Power Company Incorporated (TYO:9506 ) (Tokuden) (Sendai, Japan) buys all of the power generated at both wind farms, which totals approximately 37 gigawatt hours annually. Tokyo Gas will also have a hand in managing both wind farms in association with Hitachi.

Tokyo Gas is also planning to further develop its LNG-fired power station in Yokohama as well. Units 1 and 2 of Ogishima power station were completed and commissioned last year, and the station currently has a capacity of approximately 800 megawatts (MW). Next year, Tokyo Gas plans begin construction on a third LNG-fired unit in order to bring Ogishima's capacity up to 1,200 MW. The use of LNG in Japan as a power source has been on the rise since TEPCO commissioned the world's first LNG-fired power station in 1969. Prior to March 11, LNG-sourced power and nuclear power account for nearly the same percentage of Japan's total installed capacity. LNG use in Japan is expected to climb alongside renewable energy.

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