Tepco and Chubu transfer fossil fuel assets to Jera JV

Tepco and Chubu, which serve Nagano Prefecture and the Kanto region, respectively, created Jera in 2015 in preparation for deregulation of Japan's previously regionalised and vertically integrated power market.

Deregulation in Japan requires that by April 2020 transmission and distribution are legally separated from generation. Tepco has achieved this by creating subsidiaries for each business function under Tepco Holdings, which keeps ownership of nuclear assets including the Fukushima Daiichi site.

Jera said the transfer yesterday "completes unification of the full value chain from upstream fuel business and procurement through power generation and wholesaling of electricity/gas".  It now holds 67 GW of fossil fuel generation assets across 26 sites in Japan and nine in other countries. It aims to increase this to 80 GW globally by 2025, by which time it expects consolidated net profit to have doubled to JPY200 billion (USD1.8 billion).

LNG trading

Jera was already the world's largest buyer of LNG, having taken over purchasing duties from Tepco and Chubu, and on 2 April it built on this by merging its LNG trading business with that of France’s EDF under the name Jera Global Markets.

Jera hopes to be active in new markets that will begin in 2020 for supply and demand adjustment as well as for capacity. It foresees the energy transition bringing a global shift in generation to renewables and gas. The company's name means 'Japan's energy for a new era'.

A presentation by Jera focusing on Japan noted the "future power mix is dim". With uncertain policies regarding renewables, nuclear and coal and the "mass spread of solar power giving heavy stress to the grid", the direction for the power mix is "uncertain", it said. In the period to 2060 Japan's population is expected to decline from 128 million to 96 million.