Tokyo Electric Power Company (TEPCO)

TEPCO no longer reports scope 1 and 2 emissions from coal and gas plants due to the transfer of these assets to its joint venture business, JERA. However, it still relies on them for the majority of sold electricity. When including JERA’s assets, the company’s rate of emissions intensity reduction between 2015 and 2020 will need to triple to align with its 1.5°C pathway by 2025. Moreover, based on the company’s installed and planned electric power plants up to 2035, it is expected to exceed its carbon budget by approximately 40%. The company must use its shareholder influence in JERA to promote the rapid phase-out of coal and gas. However, in 2020 the company rejected proposals to include a statement to withdraw from coal in JERA’s Articles of Association on the grounds that it is not related to corporate affairs and “efficient coal-thermal power” should be part of a stable energy mix.

TEPCO is involved in several low-carbon research and development (R&D) projects across its business entities, including battery storage, electric vehicles, smart grids, virtual power plants and renewable energy projects. In 2020, the company invested JPY 17 billion (USD 159 million) in these projects, approximately 2.5% of total capital expenditure (CapEx). However, this level of investment is only half of the 5% expected of electric utilities to enable decarbonisation in line with 1.5°C. TEPCO has the opportunity to increase low-carbon R&D investment and develop new business models to help the company transition.

TEPCO’s subsidiary, TEPCO Renewable Power Inc., which TEPCO Holdings transferred all renewable power generation to in 2020, currently operates 9.93 GW of hydroelectric capacity. At present, solar and wind capacity is small, with three and two projects respectively. The company is planning to increase renewable capacity by 6-7 GW by 2030, with 2-3 GW coming from overseas hydroelectricity and the remainder from offshore wind. TEPCO holdings is also aiming to restart nuclear electricity generation. The company can improve its preparation for the low-carbon transition by increasing low-carbon investment to reduce reliance on JERA’s fossil fuel-derived electricity.

TEPCO has two scope 3 emissions targets for sold electricity: a 30% reduction in intensity and a 50% reduction in absolute emissions by 2030. It has also committed to become carbon neutral by 2050. It supervises JERA, which generates the fossil fuel-derived electricity that the company sells, to achieve these goals.

TEPCO plans to increase renewable electricity generation by 6-7 GW by 2030. It also aims to restart its nuclear generation in either 2022 or 2023, which has been offline since the 2011 earthquake and tsunami. By 2030, coal power plants with a low thermal efficiency rate will be shut down by JERA and hydrogen and ammonia co-firing will begin to replace coal in the long-term.

In 2020, TEPCO invested JPY 17 billion (USD 159 million) in low-carbon R&D, such as smart grids, renewable energy, virtual power plants, battery storage and electric vehicles. Its aims to restart nuclear are delayed until at least 2022 due to safety concerns at its Kashiwazaki Kariwa nuclear plant.

TEPCO’s emissions intensity, including thermal power generation from its subsidiary, JERA, decreased by approximately 2% per year on average, according to company reported sold electricity emissions intensity.

The company is still reliant on coal and gas power, as the majority of electricity it sells is procured from JERA. Despite plans for JERA to reduce dependency on coal, TEPCO believes it is a necessary part of maintaining a stable energy supply in Japan and there is no indication that fossil fuels will be phased out by the time required by its 1.5°C pathway.