Japan’s JERA to invest $32 billion in LNG, renewables and new fuels over decade

TOKYO (Reuters) -Japan’s top power utility JERA 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), global CEO Yukio Kani told reporters on Thursday.

By fiscal year 2035, JERA is targeting over 35 million metric tons in annual LNG transaction volumes, 20 gigawatts of renewable energy capacity and 7 million tons of handling volume of hydrogen and ammonia, the company said in a separate statement.

Each of those areas would receive 1 trillion to 2 trillion yen in investment over the decade, Japan’s top power generator said, with emissions falling by at least 60% from 2013 and then reaching zero in 2050, in line with the national target.

Consolidated net profit of JERA, also Japan’s top LNG buyer, should reach 350 billion yen by fiscal 2035 with earnings before interest, taxes, depreciation and amortization (EBITDA) at 700 billion yen, it said.

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 or initial public offering.

For the current financial year ending next March, JERA, an unlisted company co-owned by Tokyo Electric Power and Chubu Electric Power, sees a net profit of 200 billion yen and EBITDA at 500 billion yen, both excluding fuel cost adjustment.

JERA plans to phase out inefficient coal-fired thermal power by fiscal year 2030 and to convert all other coal-fired power generation to ammonia by the 2040s to eliminate coal completely, the statement said.

“In Asia, expanding the use of LNG is key to promoting a low-carbon society,” JERA’s strategy statement said.

($1 = 154.2600 yen)

(Reporting by Yuka Obayashi and Katya Golubkova; Editing by Varun H K and Tomasz Janowski)


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