Kansai Electric Power Company (KEPCO)

KEPCO has demonstrated a strong trend of emissions reductions in recent years, from 516 gCO2e/kWh in 2013 to 330 gCO2e/kWh in 2018. Its generation from fossil fuels has been steadily decreasing as its nuclear plants come back online following the Fukushima disaster shutdowns in 2011. The company plans to continue this trend while increasing its renewables capacity to 6 GW by the 2030s.

KEPCO shares its one 2030 target for emissions intensity – that is, the amount of greenhouse gas emissions produced for every unit of electricity – with other major electric utilities in Japan. This target – 370.5 gCO2e/kWh – is linked to the country’s nationally determined contribution under the Paris Agreement, which the World Resources Institute described as falling ‘woefully short’ of what is required. There is much opportunity for KEPCO to better demonstrate commitment to the low-carbon transition by setting public-facing emissions reduction targets spaced at intervals of no longer than five years. The trajectory of these targets should be aligned with the reductions required under the well-below 2-degree scenario.

With the exception of having board-level responsibility for oversight of climate-related issues, KEPCO performs very poorly on all of the management module indicators. There is much opportunity for the company to improve performance by establishing and sharing a more detailed plan for decarbonisation that is in line with the pathway required under the well-below 2-degree scenario. Specific emissions reduction incentives should be introduced at all levels of the company, and links between fossil fuel capacity growth and executive pay should be cut.

KEPCO intends to halve the carbon emissions in its domestic power generation business by 2030, compared to 2013. It has committed to develop diverse renewable energy sources, including offshore wind farms and geothermal power plants, and plans to reach 6 GW of renewable capacity by the 2030s.

Very little detail on exactly how KEPCO plans to achieve its low-carbon transition could be found. The company would improve its low-carbon transition alignment by sharing more detailed plans for short-, medium- and long-term actions and by committing itself to more frequent public-facing emissions reduction targets covering its whole business.

KEPCO is undergoing a major governance overhaul to restore confidence in its management following a serious corruption scandal. Quantitative information on the company’s recent and projected generation, capacity and emissions show it to be ramping up nuclear generation and reducing emissions in the short to medium term. However, further action will be needed to maintain alignment with its decarbonisation pathway longer term.

Fossil fuel power still dominates KEPCO’s generation, at ~58% in 2018. Just over half of this fossil generation capacity comes from gas, a further ~35% from oil and a relatively low 11% from coal. The return of nuclear means that the company achieved significant emissions reductions in the period 2013-2018 (from 516 gCO2e/kWh to 330 gCO2e/kWh).

KEPCO supports low-carbon initiatives, such as the circular economy and smart grid development, and it plans to develop its renewable portfolio. However, it is also still opening new fossil fuel plants (e.g. St Joseph in the USA and Tanjung Jati B in Indonesia). There is little transparency around the profitability, size, growth potential and deployment scheduling of KEPCO’s low-carbon businesses. It is collaborating on large-scale carbon capture and storage demonstration projects, but a lot more transparency is required to demonstrate alignment of its investments and planning with the low-carbon transition.