JERA aims to double profit by FY25/26 with focus on LNG, renewable energy

* To use 70 pct of 7-yr investment budget on LNG, renewables

* Off-shore wind projects are key investment targets

* Keeps coal-fired power in line with Japan gov't energy policy

By Yuka Obayashi

TOKYO, April 23 (Reuters) - JERA, Japan's biggest thermal power generator and the world's biggest buyer of liquefied natural gas (LNG), aims to double its profit by the financial year through March 2026 by stepping up investment in LNG and renewable energy, its new head said.

The joint venture between Tokyo Electric Power Company Holdings and Chubu Electric Power Co became a major electricity generator this month with the takeover of 26 power stations owned by its two shareholders and representing about half of Japan's thermal power capacity.

"Our top priority is to smoothly combine the two companies' power operations and bring synergy," Satoshi Onoda, who became president of JERA on April 1, said in an interview last week.

"We also want to become the global leader in LNG and renewable energy to enhance the transition to a clean energy economy," he told Reuters.

Under a seven-year business plan, JERA aims to boost its net profit to 200 billion yen ($1.8 billion) in the year to March 31, 2026, from 100 billion yen expected for the current year, through efficiencies gained by integration and by devoting 70 percent of its investment budget to LNG and renewable energy.

"LNG and renewables are the key growth areas," Onoda said.

JERA plans to keep trading 35 million tonnes of LNG annually by the year to end-March 2026 and aims to win gas-to-power projects overseas in which JERA provides fuel, LNG infrastructure and power generation operation and maintenance.

"We want to offer fuel, power stations and operation and maintenance services as a package," Onoda said.

To meet growing demand for cleaner energy from its customers, JERA plans to increase its renewable energy capacity to 5 gigawatts (GW) in seven years, up from 650 megawatts now and increased from an earlier target of 3 GW.

"Large-scale off-shore wind power abroad and at home will be our main targets," Onoda said.

Japanese utilities have been under strong criticism by environment activists for the use of coal-fired power and building new plants.

Among JERA's 26 power stations, six are coal-fired, including two under construction and one in development.

"We will fade out the use of old and low-efficient coal-fired power plants," Onoda said.

"But we'll keep a certain level of coal power, in line with the Japanese government's policy," he said.

Under Japan's 2030 basic energy plan, coal should account for 26 percent of the country's power supply.

($1 = 111.9000 yen) (Reporting by Yuka Obayashi; Editing by Tom Hogue)

2019-04-22 22:00:00

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