Tokyo Electric Power Co., forced to shut the world's biggest nuclear station after an earthquake, will speed up construction of coal- and gas-fired plants to avoid a supply shortfall as safety concerns delay new atomic reactors.
Asia's biggest utility plans to complete the Hitachinaka No. 2 and Hirono No. 6 coal-fired plants in fiscal 2013, one year ahead of schedule, said company officials, who declined to be identified before an announcement in Tokyo today. The first line of the Kawasaki No. 2 liquefied natural gas-fired plant will also be ready that year, four years earlier than planned, they said.

Tokyo Electric's Kashiwazaki Kariwa plant in Niigata prefecture has been shut since July 16 when a 6.8 magnitude tremor caused a fire and radiation leaks. New atomic projects face delays as utilities boost quake resistance to restore public confidence following the plant closure and the revelation last March of more than 200 cases of data falsification and incident concealment by Japanese utilities.

``All regional power companies are keen to expand nuclear output, even though they are facing some delays,'' Masanori Maruo, a utilities analyst at Lehman Brothers in Tokyo, said by telephone. ``Replacing aging, emission-heavy thermal plants with new units that are cleaner and more fuel efficient is a risk hedge for utilities given the instability in nuclear operations caused by the quake and by falsification issues.''

Tokyo Electric, which has restarted decommissioned thermal plants to make up for the shortfall in nuclear generation, expects to post its first loss in 28 years because of higher fuel costs. It has set aside 440 billion yen ($4.39 billion) for additional oil and LNG costs in the year to March 31.

New Plants

The utility on Jan. 30 estimated a net loss of 155 billion yen ($1.5 billion) for this financial year, compared with profit of 298 billion yen in the previous period.

Tokyo Electric shares have dropped 31 percent since the July quake. They were down 1.3 percent to 2,615 in Tokyo trading at 10:14 a.m. local time.

The 1,000-megawatt Hitachinaka No. 2 coal-fired plant is to be built in Ibaraki prefecture, while the Hirono No. 6 station, with a capacity of 600 megawatts, will be in Fukushima prefecture. The gas-fired Kawasaki No. 2 unit will be in Kanagawa prefecture.

The earlier start of the thermal plants is meant to offset lost output caused by the one-year delay in the completion of Tokyo Electric's three new nuclear reactors, the officials said.

Under the plan, to be announced today, the 1,385-megawatt Higashidoori No. 1 reactor will be completed in December 2015, the Fukushima Daiichi No. 7 unit will be commissioned in October 2014 and the No.8 reactor in October 2015, they said. The two reactors can produce 1,380 megawatts each.

Quake Resistance

The delay is mainly to incorporate new earthquake resistance assessments after the Kashiwazaki Kariwa plant was struck by a bigger tremor than it was designed to withstand. Tokyo Electric this month began a geological survey near the Higashidoori facility to check a fault line that the company didn't include in an earlier survey.

Tokyo Electric knew in 2003 that an undersea fault near its Kashiwazaki Kariwa nuclear facility could cause a magnitude 7 earthquake, it said in a document filed to the trade ministry in December. The finding wasn't factored in when designing the Kashiwazaki Kariwa station, which could supply about 10 percent of the utility's total output.

All seven reactors at the plant, capable of generating 8,212 megawatts, will remain shut until the trade ministry and local authorities approve restarting them.