Tepco may sell older fossil-fuel plants

Tepco may sell or invite outside investments for its older fossil fuel-fired power plants.

Tepco, which is now widely expected to be effectively nationalised, needs to cut costs as it grapples with a massive cleanup and compensation bill after the nuclear crisis at its Fukushima plant as well as a jump in fuel costs as reactors remain closed amid public safety fears.

The steps are set to be part of a business reconstruction plan that Tepco aims to submit to the government in March, the sources said, declining to be identified as they are not authorised to speak publicly on the matter.

Although the utility has yet to finalise the plants it is willing to part with, its 2,270 megawatt Yokosuka plant, 1,880 MW Goi plant, 1,150 MW Minami Yokohama plant and 1,050 MW Ohi plant are expected to be included and others may also be considered, they said.

Most of these plants were built between 1965-1974 or earlier and need to be upgraded.

The steps outlined by the sources who spoke to Reuters are less far-reaching than a Nikkei newspaper report which said Tepco's entire fossil fuel-fired plant division, whose assets are valued at around 900 billion yen or $11.7 billion, could be split off from its nuclear power and other businesses.

The fossil fuel division accounts for some 60 percent of Tepco's power generation capacity.

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Tags: Tepco, fossil fuel power plants, business reconstruction plan