1 Toshin-cho
Chubu Electric Power Company, Incorporated (Chubu Electric) ranks third among the nine major Japanese electric power companies in terms of generating capacity, kilowatt-hour sales, revenues, and total assets. The company serves over 8 million consumers in a 39,000 square kilometer area in the center of Japan ("Chubu" means "central"). The Chubu region is located on the main island of Honshu, between Tokyo and Osaka, and consists of a prosperous coastal plain with excellent harbors and rich farmland. Inland are the mountain ranges known as the Japanese Alps which rise to 3,000 meters above sea level. The rivers cascading down these mountains provide an abundant and steady source of hydroelectric power. Today the Chubu region accounts for 20% of Japan's industrial output.
Chubu Electric was established in May 1951, a few months before the Japanese Constitution was promulgated, and the year before the U.S. occupation ended. It was one of nine companies formed at the same time as part of the restructuring of Japan's energy industry after World War II. In addition to these nine companies, with a total generating capacity of 164 million kilowatts (kw) and annual sales of 599 billion kilowatt-hours (kwh), Okinawa Electric Power acts as a regional supplier to Okinawa prefecture. Except for Okinawa, the power systems of these companies are interconnected to ensure stable and efficient service for the entire country. In recognition of the public nature of electric power utilities, rates and other important factors are under the supervision of the Ministry of International Trade and Industry (MITI), although the industry itself is private.
At the time of its formation, Chubu Electric was given responsibility for supplying electricity to Aichi, Gifu, Mie, and Nagano prefectures, as well as that portion of Shizuoka prefecture west of the Fuji River. Its shareholders' equity was ¥29.4 billion, and its generating capacity was 1.03 million kw. It soon emerged, however, that this capacity was inadequate. Because of the age of the company's equipment, which it had inherited from the restructuring, its actual generating capacity was in fact only 600,000-700,000kw. To make matters worse, the Korean War created a sudden surge in demand for electric power as Japan became a rear-base for the U.S. Army. In order to tackle this problem the company adopted a dual approach, conducting a publicity campaign for energy savings and constructing new power plants, both hydroelectric and coal-fired. Construction of the Hiraoka hydroelectric plant in 1952 was followed by the construction of the Oigawa hydroelectric plant and the Mie and Shin-Nagoya coal-fired plants. By the latter half of the 1950s, supply and demand finally balanced out. This expansion of Chubu Electric's generating power required spending ¥210 billion over ten years, which was mainly covered with financing from the Japan Development Bank and with foreign capital.
In September 1959 a typhoon struck Chubu Electric's operating region, badly damaging one of the company's plants and flooding another on the coast for several months. Using the slogan "Electric power is the generator of recovery," the company responded with an all-out restoration effort. The efforts of the company to cope with this disaster earned it an award from the Disaster Committee Headquarters--it was the only award of this kind given to a private-sector company--and formed the basis of its approach to future disasters.
The 1960s were a period of marked economic growth in Japan, highlighted by the 1964 Tokyo Olympics and the improvement of the country's infrastructure, with the opening of the Tokaido bullet train and the Tomei and Meishin highways which linked up major industrial areas in central Japan with Tokyo. Because it occupies part of the Pacific coast belt, the Chubu region attracted the heavy chemicals industry and demand for electric power increased by more than 10% per annum. For several years, the growth rate in this area was one of the highest in Japan.
To meet the increasing demand, the company introduced a large volume of new oil-fired generating capacity. In 1960 fossil-fuel-fired plants contributed more than half of the company's electricity output for the first time, and subsequently new coal-fired plants with capacities of over 4 million kw were built around the Ise Bay, in Yokkaichi, Owashi, Chita, Nishi Nagoya, and Atsumi. At the same time this base was supplemented with hydroelectric plants--Hatanagi Unit 1 and Takane Unit 1--to meet peak demand.
In addition to developing new electricity sources, the company expanded its grid, constructing a 270,000 volt (V) transmission line around Ise Bay and strengthening its links with other utilities. Because oil prices remained stable during this period of rapid economic growth, the company did not need to revise its rates between 1954 and 1964.
In the 1970s, problems stemming from the period of high economic growth began to emerge. Environmental pollution had been a growing problem in Japan since the late 1950s when people began to suffer from mysterious and horrific diseases. Because the symptoms of those affected became so widespread, developing "Citizens" Movements' (Shimin-Undo) were able to coerce the government and industry into tackling the problem. In response to the pollution problem, Chubu Electric promoted dual measures--for fuel and plant--concerning atmospheric pollution, noise, and waste water. These included reducing the sulfur content of its fuel. As with the later oil crises, Japan managed to turn adversity to advantage with the pollution problem, and was to become one of the worlds' leading nations in terms of pollution control.
The first oil crisis hit in October 1973, a product of the fourth Middle East War. The price of crude oil--oil-generated electricity accounts for about 30% of Chubu's generation--rose above $10 a barrel, and after the second oil crisis in 1979 above $30. Chubu Electric revised its rates three times--in 1974, 1976, and in 1980--and largely managed to overcome the difficult times. A three-tiered rate system was introduced for household use, and a special rate for industrial users was introduced as the company promoted the concept of energy saving.
The oil crises proved a major turning point in Japan's economic development. The industrial emphasis moved from heavy chemicals to manufacturing, assembly, and knowledge-intensive industries. The rate of growth in demand for electric power, which had been almost 10% per annum anyway, steadily increased. In response, Chubu Electric adopted what was called a "positive management" policy aimed at restructuring its business. Subsequent stabilization and decline in oil prices and the appreciation of the yen, reducing fuel costs further, meant that with little pressure on its balance of revenues and expenditures the company was able to reduce its rates four times up until April 1989, following the recommendations of MITI's Electricity Utility Industry Council.
In the early 1970s the company began promoting diversification of its energy sources, mainly into nuclear power and Liquefied Natural Gas (LNG). The promotion of these power generation methods is perceived by the company to reduce environmental pollution, especially carbon dioxide emissions. Its first nuclear power plant, Hamaoka Unit 1, started operation in March 1976, five years after construction began. Construction of Units 2, 3, and 4 followed. In December 1973, at the height of the oil crisis, Chubu Electric entered into a contract with Indonesia for long-term supplies of LNG, and in March 1978 it commenced operation of two exclusively LNG-fired plants, Chita Units 5 and 6. It also promoted switches to LNG at Chita Units 1 to 4, Yokkaichi and Kawagoe. As a result, LNG's share of power generation reached 33% in 1989.
During the 1970s and 1980s, customer needs grew more sophisticated. Chubu Electric met the demand with various measures to introduce new technology and reduce costs. Measures included construction of a second 500,000 kilovolt (kv) transmission line, the introduction of super-high voltage lines for urban areas, enhancement of protection against lightning, the introduction of optical communications, enhancement of information capabilities, and automation of facilities. In addition, the thermal efficiency of Yokkaichi Unit 4 and Kawagoe Unit 1, which started in 1989 using the latest technology, was raised to over 40%, compared with an industry average for the nine companies of 38.8%, within a year.
To meet increasingly varying customer needs, Chubu Electric promoted equipment for late-night consumption of electricity, heat pumps, 200-volt household appliances, office building air conditioning, area heating and cooling--the leveling-off of demand over peak and trough times in a particular area--and electric heat for industrial use and institutional kitchens.
In conjunction with these measures, Chubu Electric inaugurated a Challenge program in 1984 aimed at rationalization and quality control, and supported by Action Challenge Circles--information- and finance-gathering organizations set up abroad to facilitate these two functions. It established offices in Washington D.C. in 1982 and London in 1985, and diversified its activities, principally into telecommunications and heat supply. In 1988 the company embarked on a program to update its corporate image and prepare itself for the 21st century.
Chubu Electric continues to implement anti-pollution measures at its thermal power plants. Greater use of low-sulfur fuel oils, flue-gas desulfurizers, and LNG has reduced sulfur-oxide pollution. Flue-gas denitrification, use of low-nitrogen fuels, and boiler modification have greatly suppressed generation of nitrogen oxides. Also, all company power plants are equipped with electrostatic precipitators which remove soot from flue gases with a high collection efficiency of 90% or more. Measures being adopted to prevent water pollution by power plants include the purification of discharge water by such methods as coagulating sediment, neutralization, and filtration.
To deal with noise and vibration problems, consideration is given to the use of low noise apparatus and the installation of noise suppression devices. Also, where necessary, installation of machinery is confined to indoor or underground sites. In addition, the grounds of power plant sites are landscaped with greenery. The amount spent on thermal power protection in fiscal year 1990 came to ¥40.8 billion ($258.2 million). However, Chubu Electric's overall policy on environmental protection considers that a rational balance must be kept between environmental protection and the stable supply of energy necessary for sustained economic growth.
Chubu Electric also continues to diversify power sources, improve overall energy efficiency, and develop carbon dioxide removal techniques. Due to rising crude oil prices and the recent depreciation of the yen, power generation costs are rising. To maintain the current level of rates charged to consumers, the company is implementing radical cost reduction measures by upgrading operations.
Between the years 1991-2000 Chubu Electric is planning to reach a capacity of 10.86 million kw. Of this, 10.3 million kw are to come from sources developed by Chubu Electric--2.24 million kw from nuclear power, 6.1 million kw from coal, 700,000kw from LNG, and 1.26 million kw from hydroelectric sources.
Chubu Electric believes that nuclear power generation is needed to ensure adequate power supplies and a sufficient diversity of sources. In addition to the 1.137 million kw Unit 4 reactor under construction at Hamaoka, the Units 1 and 2 at Ashihama (each with a planned output capacity of 1.1 million kw) are expected to provide power for the early 21st century.
Active development of thermal power, also considered necessary, centered primarily on coal. In addition to the Unit 1 to 3 generators now under construction at Hekinan, each with an output of 700,000kw, plans for the Unit 1 and 2 generators at Shimizu, each with a capacity of one million kw, are being implemented.
With a view to fully exploiting indigenous Japanese energy resources, construction work on hydroelectric plants is proceeding at six sites with a combined total capacity of 1.095 million kw. As for existing hydroelectric plants, remodeling or improvement plans are presently in operation.
Power supply is to be stabilized in relation to demand over the next ten years, with the prospect of maintaining an additional 8-9% of demand in reserve capacity. The proportion of power supplied by nuclear power plants is expected to increase from 18% recorded in 1990, to 22% by the year 2000, while oil-fired power is expected to decrease from 40% to 24% during the same period, in accordance with an accelerated trend toward reduced dependence on petroleum.
Chubu Electric also plans to make improvements to supply reliability. At present, the Chubu trunk transmission line system is composed primarily of 500kv lines, and electricity is distributed around the load centers, or high-consumption areas, of Nagoya. Power transmission facilities are to be expanded to cope with factors such as increasing power demand, progress in development of new power sources, and growing urbanization.
Future developments include the installation of a second 500kv outer loop line. In addition, the 275kv system within the city of Nagoya is being expanded. Specific measures to improve reliability include further lightning protection for transmission lines and reinforcement of lines linking substations, as well as automation of troubleshooting and service restoration procedures. The funds required for the implementation of the above-mentioned projects were set to total ¥618 billion during the fiscal year 1991 and ¥649 billion in 1992.
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