By Yuka Obayashi and Ritsuko Shimizu
TOKYO (Reuters) – Japan will maintain its decarbonisation drive in spite of the Ukraine crisis highlighting the need to keep fossil fuel supply stable for energy security, the president of TEPCO Renewable Power Inc said.
“The big trend of expanding renewable energy will remain unchanged,” Masashi Nagasawa, the president of TEPCO Renewable Power, told Reuters in an interview this week. The company is a unit of Tokyo Electric Power Company Holdings.
“I don’t think we will face a headwind.”
Russia’s invasion of Ukraine, what Moscow calls a “special military operation”, has spotlighted Japan’s role in the oil and gas projects on Russia’s far eastern island of Sakhalin, as Western oil majors have decided to pull out of the country.
Japan’s Economy, Trade and Industry Minister Koichi Hagiuda recently said the country will boost its investment role in upstream projects for liquefied natural gas (LNG) to spur new development and boost fuel offtake by its companies.
Nagasawa said there are some concerns the government may allocate more budget to securing fossil fuels.
“We are a bit worried… Japan needs to respond to the Ukraine crisis in the short term with limited resources.”
TEPCO Renewable was defeated by consortiums led by Mitsubishi Corp in local offshore wind power auctions last year, but will stick to its goal to develop 6-7 gigawatts (GW) of new offshore wind and hydroelectric power assets by 2030.
“We don’t need to revise our plans now,” he said, repeating its target to develop 2-3 GW of offshore wind power both at home and abroad, and 2-3 GW of hydroelectric power overseas.
Mitsubishi’s rivals were stunned by the low feed-in tariff prices the trading house’s groups had proposed, ranging from 11.99 yen ($0.09) to 16.49 yen per kilowatt hour (kWh) – far below a ceiling price of 29 yen kWh.
“We were surprised as the deviation from the ceiling was beyond our imagination,” Nagasawa said.
TEPCO Renewable is working to reduce costs, but will not necessarily propose lower prices than the Mitsubishi’s offers in the future auctions, he said.
“The most dangerous thing is to conclude that we will catch up at any cost.”
($1 = 128.2900 yen)
(Reporting by Yuka Obayashi; Editing by Christian Schmollinger)
