Erex Eyes Biomass, Wind to Expand in Japan Power-Retail Business

Erex Co., a Japanese power supplier, will add more biomass power plants and expand into wind farms as it seeks to reach out to more customers following the opening up of Japan’s power-retail market.

The company currently has a 20-MW operating biomass power plant in the western prefecture of Kochi and has several more biomass projects in varying stages of development.

Japan fully liberalized its power market in April allowing households and small businesses to pick power providers for the first time. Erex wants to boost the ratio of its customers in the newly opened segment to 50 percent, said President Hitoshi Honna. The low-voltage segment was served by 10 regional monopolies prior to liberalization. Erex is also considering adding wind power either by developing projects with partners or through acquisitions, Honna said. The company is looking at having as much as 100 MW of wind capacity, he said.

“The way to survive in the liberalized market is to address environmental issues and retain customers,” he said. “Biomass power offers a better prospect of recovering investment,” he said.

A 50-MW biomass power station is scheduled to open as early as this year in Oita prefecture. Erex also plans to build a 75-MW biomass plant with Taiheiyo Cement Corp. in Iwate. The company expects to reach a decision soon with partners on another 75-MW project in Fukuoka. Two more stations are under consideration, Honna said.

Japan’s biomass power market is expanding due to an incentive program introduced in July 2012 that pays favorable rates to clean-energy producers. Erex plans to use imported woody biomass fuel for its plants and is looking at expanding its fuel-procurement operations.

©2016 Bloomberg News

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