Kansai Electric Says Fuel Costs May Rise by 400 Billion Yen


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Kansai Electric Power Shortages highlight nuclear shutdown impacts, LNG and crude oil reliance, peak demand gaps in Osaka, Kyoto, and Kobe, and stress-test politics driving delayed reactor restarts and rising electricity costs.

 

What's Going On

Supply shortfalls in Kansai after reactor shutdowns, forcing LNG and oil use and risking 41 summer shortage days.

  • Estimated costs hit 1.7 trillion yen in FY2012-13, from 1.3 trillion.
  • Only 2 of 54 reactors online after March 2011 disaster.
  • LNG use at 7.3 million tons; crude oil near 5 million kL.

 

Kansai Electric Power Co. said costs to run thermal plants and purchase electricity from other companies will rise by about 400 billion yen $4.85 billion next fiscal year without the restart of a nuclear reactor.

 

The Osaka-based company estimated the total costs to fill the void left by nuclear reactors shut for safety checks amid a broader nuclear debate over energy policy would total more than 1.7 trillion yen for the year ending March 2013, up from 1.3 trillion yen this fiscal year, according to a presentation on its website.

Only two of Japan’s 54 nuclear reactors remain online after the March 11, 2011, quake and tsunami crippled Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear station. The government has said it won’t approve the restart of reactors, even if they pass so-called stress tests, despite the generation drop reported nationwide, unless local authorities agree.

Kansai Electric’s crude oil consumption in the year ending March is estimated to be nearly 5 million kiloliters 31.4 million barrels, reflecting a broader increase in oil use among utilities, while use of liquefied natural gas is expected to reach about 7.3 million tons, which is the capacity of its facilities.

The company’s maximum supply capacity this summer without nuclear power is estimated at 23.98 million kilowatts, and it plans to restart thermal units to ease constraints, the presentation said. That’s 13.9 percent less than the 27.84 million kilowatts of peak electricity demand last summer in the Kansai region that includes the cities of Osaka, Kyoto and Kobe.

Based on that forecast, the utility expects 41 days of power shortages between July and September, while Tokyo power shortages were also projected in separate reports.

 

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