INTERVIEW: Japan's Chubu Electric targets US, Europe, Indo-Pacific to expand renewable energy

Japanese utility Chubu Electric Power Co. is stepping up its global push into renewable energy, targeting North America, Europe and the Indo-Pacific with a suite of advanced technologies -- including geothermal, offshore wind and carbon capture -- said Hiroki Sato, senior managing executive officer and division CEO of global business.

Chubu Electric, a Nagoya-based diversified energy conglomerate, aims to invest about Yen 400 billion ($2.56 billion) by 2030 in global businesses focused on decarbonized energy, the company said. Sato added that the global business division is targeting 3.5 GW of green power capacity by 2050.

"There is no doubt that [in] ... the Indo-Pacific markets, we [can] expect excitement about the growth of power and energy. So, the main focus should be on the Indo-Pacific area," Sato told Platts, part of S&P Global Energy, in an interview on the global business division's growth plans.

"But of course, the US and Europe are the so-called mature markets ... power demand increase will be coming because of AI or data center demand. And from such a point of view, these mature markets are also very important areas," he said.

Chubu Electric has an offshore wind project in the Netherlands, a closed-loop geothermal project in Germany and a carbon capture, utilization and storage project to support decarbonization in Japan, among a host of other renewable power-related initiatives.

Its renewable energy projects using multiple technologies in Asia include development projects in Uzbekistan, the Philippines and Vietnam, as well as a mini power grid in northern India.

"We are now developing and operating the first commercial project for an advanced geothermal system," Sato said, referring to the Eavor closed-loop geothermal project in Geretsried, Germany.

"It already started commercial operations last November, and now we are still in the process of [evaluating] lessons learned [and] how to reduce costs. So, full operations are expected to start in 2028," he added.

Platts assessed the Indian International Renewable Energy Certificate solar current-year price at 62 cents/MWh on Feb. 26, down marginally month over month.

Steady strategy amid change

Speaking of the changing dynamics of global energy markets -- facing geopolitical tensions, tariff uncertainties and inflation -- Sato said the impact of these factors is lower than before, and Chubu Electric continues to carry out business with its long-term goals in focus.

"The cost of materials, the project [and] manpower ... will definitely affect the return rate of our project businesses. On top of that, there is the tariff issue," he said. "But I don't think it would have a material negative impact in the long term."

Sato emphasized that multiple technologies and pathways are important to the energy transition, including the adoption of low-carbon energy with CCUS before a gradual shift to renewable energy.

Chubu Electric has signed up with a US energy infrastructure fund, Lotus Infrastructure Partners, and its focus is not only on renewable energy but also on low-carbon projects, Sato said, adding that this opens the door to involvement in gas-fired power plants with a CCUS structure.

In Europe, the UK is of strong interest, as the rest of the continent is more focused on renewable energy, which limits options for low-carbon energy supply, he said, outlining the advantages of having lower-cost, low-carbon energy in the portfolio.

CCUS awaits law formation

Sato also said that Chubu Electric sees the carbon capture and storage business "as a necessary piece for the transition business."

"CCS is the so-called necessary piece for the blue area, together with gas-fired or coal-fired [units] for steel companies," Sato said. "So definitely, this is a very important piece," he said, adding that it takes time for the government to establish "the appropriate law" given domestic matters.

"This means that for the private sector, we cannot project the return rate of such projects, because we need a profit, even if it is a necessary piece for the transition business," he added.

In an interview with Platts in July 2024, Sato said Chubu Electric is in advanced discussions with BP on a CCUS project to sequester up to 20 million metric tons/year of CO2 in the Nagoya port area, with a potential fleet of some 20 liquefied CO2 carriers for transportation to Indonesia's Tangguh facility.

Sato said then that Chubu Electric expects to start up the CCUS project with BP in 2030, with an eye on "making a final investment decision around 2026 or 2027" after establishing a detailed project structure.

In the latest interview, Sato said that "it might be difficult and challenging" to meet the FID and startup targets. Nevertheless, Chubu Electric is in talks with CO2 emitters for the Nagoya port CCUS project, he added.

"It is still a premature process. But we have a lot of dialogue, and [with] some of the emitters, we can reach some agreements," Sato said.