Mitsubishi abandons plan to build new coal-fired power plants

9 September 2010


A unit of the Mitsubishi group, electricity generator and retailer Diamond Power Corp, has abandoned a plan to build two coal-fired power plants in Fukushima Prefecture, balking at the growing costs associated with keeping down carbon dioxide emissions.

The company, which Diamond Power began retail sales of electricity on deregulation in 2000, had planned since 2003 to construct new coal fired plants. These two plants, each with an output of 200 MW, would be constructed in the grounds of Nippon Kasei Chemical Co's Onahama factory. The partners have been conducting an environmental assessment with a view to bringing the facilities online in 2012.

While coal is relatively cheap compared with other fossil fuels, it is is among the most CO2 emitting of the fossil fuels, leading Japan's environment minister to express reservations about the plan last year; and the minister of economy, trade and industry called for additional environmental measures.

Diamond Power considered steps such as improving the plants' power generation efficiency by 1 percentage point and increasing the ratio of biomass fuel from the initially planned 3-5% to about 10%. But with estimated construction costs potentially doubling to almost 100 billion yen, the firm decided that the project was no longer economically viable. To make matters worse, the prospect of a new environmental tax undercuts the cost benefit of coal.




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