Japan's JERA Plans $32 Billion Investment in LNG, Renewables, and New Fuels Over Next Decade
(Reuters) — Japan's top power utility JERA said on Thursday it plans to invest 5 trillion yen ($32.4 billion) 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 million metric tons in annual LNG transaction volumes, keeping the current levels.
JERA also wants to boost renewable energy capacity to 20 gigawatts from 5 GW now and handling volume of hydrogen and ammonia to 7 million tons 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 trillion to 2 trillion yen in investment over the decade, JERA said, with carbon dioxide emissions falling by at least 60% from 2013.
JERA, an unlisted company co-owned by Tokyo Electric Power 9501.T and Chubu Electric Power 9502.T said net profit should reach 350 billion yen by fiscal 2035, up from the expected 200 billion 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 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, elsewhere in Asia is key to promoting a low-carbon society," he said.
($1 = 154.2600 yen)
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