Two Japan utilities expect nuclear reactor restarts to boost income, cut fuel purchases

Chugoku Electric Power Co

01/05/2024 08:05

By Yuka Obayashi
       TOKYO, May 1 (Reuters) - Japan's Tohoku Electric Power
 9506.T  and Chugoku Electric Power  9504.T  have factored in
nuclear power restarts into their earnings forecasts, expecting
boosts to income as they cut down on expensive fossil fuel
purchases driven by a weak yen.
    The planned restarts of the Onagawa No.2 reactor around
September for Tohoku and Chugoku's Shimane No.2 reactor in
December mark the first time the two utilities will have a
nuclear power reactor operational since the 2011 Fukushima
nuclear disaster led to all of Japan's reactors being shut down.
        Tohoku's long-delayed restart will also mark the first
time a boiling water reactor (BWR) will be operational in Japan
since the disaster.
    "We expect a profit contribution from the restart of the
Onagawa reactor - the cost of fossil fuels such as LNG will be
reduced," Hiroki Nikaido, Tohoku Electric's senior executive
officer, told reporters at a Tuesday briefing.
    It forecasts recurring profit for the year to March to come
in at 190 billion yen ($1.2 billion) - down 35% from the year as
it expects electricity sales to be less profitable. The restart
will save it roughly 40 billion yen in costs.
    Chugoku has predicted annual recurring income of 65 billion
yen, down 67% from a year earlier, with its restart contributing
11 billion yen.
    Japan hopes to generate up to 22% of its electricity from
nuclear power by the end of the decade from less than 10% now
and has so far restarted 12 reactors. It had 54 reactors before
the Fukushima disaster but many will be decommissioned. 
    The restarts as well as increased use of renewable energy
have helped Japan cut down on fossil fuel purchases. The world's
second-largest LNG importer saw LNG imports fall 8% to 64.9
metric tons in the past financial year while imports of thermal
coal dropped 13% to 98.2 tons.
    Separately, Kansai Electric Power  9503.T , Kyushu Electric
Power  9508.T  and Shikoku Electric Power  9507.T  predicted
nuclear power utilisation rates of 80%, 88% and 81% respectively
for the current financial year, compared with 77%, 91% and 87% a
year earlier.
    Kyushu Electric said it was able to cut its annual
consumption of coal by 28% to 5.4 million tons and its
consumption of LNG by 26% to 1.6 million tons in the last
financial year. 
    Tokyo Electric Power  9501.T , the operator of the Fukushima
plant, has yet to gain local consent to restart its key
Kashiwazaki-Kariwa No.7 reactor which is also a boiling water
reactor. If it were to go back online, that would help Japan
further reduce its reliance on fossil fuels.
($1 = 157.8600 yen)

 (Reporting by Yuka Obayashi; Editing by Katya Golubkova and
Edwina Gibbs)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))