Japan's Kansai relies on nuclear to cut CO2

By Osamu Tsukimori

OSAKA (Reuters) - Japanese utility Kansai Electric Power Co. (9503.T: Quote, Profile, Research, Stock Buzz) aims to lower its carbon dioxide (CO2) levels from the electricity it sells by around 20 percent from 2008 through increased nuclear power generation and credit buying.

The country's second-largest power generator aims to cut CO2 to 0.282 kg per kilowatt hour of electricity sold in the five business years from April 2008, versus its latest data for 0.358 kg in the 2005/2006 business year.

This will be the lowest among Japanese utilities, who are cutting emissions under the country's Kyoto Protocol commitments, though Tokyo has not imposed mandatory targets unlike the European Union and analysts say it will struggle to meet its goal.

"Japan is resource poor, so we have no choice but to rely on nuclear power as a major source of energy," the firm's Executive Officer Masao Ikoma said in an interview as part of the Reuters Energy Summit.

Kansai Electric uses nuclear power to generate some 55 percent of electricity, with 32 percent thermal power from coal, oil and liquefied natural gas (LNG) and the remaining 13 percent from hydropower.

The firm said it aimed to improve its nuclear utilization to 80.5 percent in the 2007/8 business year, from 77 percent last year, as well as upgrading to more efficient combined cycled gas-fired plants and buying CO2 credits from projects cutting emissions overseas.

Japan vowed last week to meet its Kyoto target to cut by 6 percent from 1990 levels, but its emissions have risen by 8 percent, leaving a 14 percent gap to be covered.

Group of Eight leaders meeting in Germany on Thursday agreed on the need for substantial cuts in world greenhouse gas emissions, short of European calls to halve emissions by 2050. nL07182869  Continued...