The Tokyo Electric Power Co (Tepco), Japan’s largest power utility, has announced that it intends to postpone work on most power station projects in the design stage of under construction in a bid to prevent a serious overcapacity as a result of Japan’s extended economic slowdown.
If all the plants planned for completion were carried through the utility would have a substantial surplus capacity. Details of the postponements are to be finalised by the end of this month (March) but the company has indicated that only nuclear construction will be exempt. Tepco will continue its nuclear programme in order to meet greenhouse gas emission limit controls and to maintain good relations with communities where new nuclear capacity is under construction.
Japan’s economy has been in trouble for the past decade. Although the government has tried to spend its way out of recession, recent economic figures show no significant improvement. During the late 1980s the annual growth in demand for electricity was close to 6 per cent. In the past few years it has struggled to reach 2 per cent. This, coupled with more energy efficient equipment, increased use of commercial power generating systems and more competition has reduced utility demand.
Tepco has not recorded a new record demand in four years. Forecasts predict growth at only 1-2 per cent for the next ten years. These unprecedented conditions have precipitated the unprecedented action, Tepco said. The current construction programme was based on strong growth forecasts and it seems likely that, nuclear construction apart, only virtually completed projects will now reach production on schedule.
