Chiba Sodegaura Energy, the equally owned joint venture of Japanese power utility Kyushu Electric Power, gas retailer Tokyo Gas and oil refiner Idemitsu, has agreed to scrap a 2 GW coal-fired power project at an Idemitsu-owned unused industrial site in Sodegaura, in the Chiba prefecture of Japan. Instead of simply abandoning the project, the three companies will continue a feasibility study but will switch the planned fuel source to LNG and evaluate the development of a gas-fired thermal power plant at the same location.
The three companies have been working on the coal-fired project since May 2015. The project would have entailed two ultra super-critical (USC) units of 1 GW each. It was still at the planning stage and did not go past the feasibility study phase. Stricter rules introduced in April 2016 under Japan's Energy Conservation Act have prompted a reevaluation of the initial business plan. The last regulations require a power producer to achieve at least 44% generating efficiency by 2030, while the USC technology proposed for the project would have a 40% efficiency only. Besides, the project sponsors estimate that the project is not economically viable and will not yield the initially expected
investment returns.