Today,I would like to discuss two topics: electric power technology development
in 2000, and electric power demand and supply in 1999.
Concerning our technology development plans, I would like to report on
several cooperative development efforts.
Research and development efforts geared at improving customer service and
competitiveness have gained new importance with the partial deregulation
of retail electricity and the implementation of a bid system for thermal-generated
power.
In addition to independent research projects at each of our member companies,
there are a number of important joint development projects being conducted
in the following areas.
ELong-term energy security and the prevention of global warming, which
are important to all electric power companies.
ERevolutionary new technologies that require a significant commitment
in terms of financial and manpower resources, as well as cooperative implementation.
Details of the projects being undertaken are shown in Reference Document 1.
Technology development for energy security and the prevention of global
warming, nuclear fuel cycle technologies for uranium enrichment and reprocessing,
and MOX fuel processing, are all areas in which joint development efforts
are proceeding.
In addition, joint development will continue for environmentally friendly
Integrated Coal Gasification Combined Cycle (IGCC) technologies that have
the potential to offer output efficiencies as high as 48%.
We are also actively pursuing long-term joint development of fused carbonate
fuel for high-efficiency thermal generation, more compact and lightweight
equipment, and super-conducting materials that will reduce losses from
the electric power supply grid.
Furthermore, we plan to utilize the resources of the Central Research Institute
of Electric Power Industry to the fullest to help reduce the costs of joint
development projects, which are projected to be \24.7 million for this
year alone. In addition, we will seek government support for projects that
affect the public good or that have the potential to result in revolutionary
technological breakthroughs. Progress in these and other related technological
areas will be periodically reviewed to ensure that projects are properly
focused and prioritized, and that R&D resources are efficiently allocated.
In the United States and other countries that have already undergone deregulation,
it seems that funding for long-term research has taken the back seat in
favor of projects that offer short-term gains. Although the results of
this approach will not quickly become evident, I believe that they will
have an adverse effect in the long run. We want to avoid the problems that
such an approach can cause, and even amidst heightened competition, ensure
that essential research for the diversification of the nation's energy
resources and protection of the earth's environment is given the attention
it deserves.
I would now like to move on to the topic of 1999 electric power supply
and demand.
The figures for electricity generated and purchased at each FEPC member
company in 1999 were released today. The statistics are noteworthy in two
respects:
E Although demand from the industrial sector was poor in the first half
of the year, it began to show signs of recovery in the second half.
E High temperatures in eastern Japan led to increased demand for cooling
in the summer.
As a result, demand from August 1999 to March 2000 rose for eight consecutive
months in comparison with the previous year, and an increase of 2.0% was
recorded for the entire year (1.7% adjusted for leap year).
As is shown in Reference Document No. 2, peak load across the 10 FEPC companies
did not increase last year -- in fact, it has yet to top the record of
107.113 million kilowatts set in the summer of 1995. Even looking at the
figures on a company-by-company basis, only Hokkaido, Tohoku and Hokuriku
recorded an increase. On the other hand, the total amount of electricity
purchased, measured in kilowatt-hours, has grown steadily every year. This,
coupled with the fact that peak loads have not increased, is an indication
of efficient load distribution and power supply system usage. In fact,
the load factor in 1999 was only 1% higher than in 1998, and in the four
years during which the peak load record was not renewed, the load factor
increased by 4%.
Although final figures for 1999 electricity sales are still being processed,
tentative figures indicate that sales growth in excess of 2% was recorded,
almost exactly matching the increase in electricity generated and purchased.
By category, the 1999 total for residential demand, which was fueled by
increased demand for cooling in eastern Japan, is expected to record an
increase of about 3% over last year.
Large-scale industrial user demand, which serves as an indicator of the
nation's economic health, was lead by strong demand from the steel, paper
& pulp and electrical machinery sectors in the second half, and we
are anticipating an increase of about 5% in the figures for March. This
will mark the eighth consecutive month of growth since last August, and
is a good sign that the economy is finally beginning to recover. Despite
low demand from industrial users in the first half of 1999, this strong
showing in the second half is expected to result in an increase of about
1% for the year.
In conclusion, I would like to mention some notable aspects of the capacity
utilization rate for nuclear power.
The 1999 capacity utilization rate, including figures for Japan Atomic
Power Company, was 80.1%. Due to problems at the Tsuruga Power Plant (unit
2) and Tokai No. 2 Power Plant, the rate was unfortunately 4% lower than
the previous high of 84.2% recorded in 1998, but it nonetheless exceeded
80% for the fifth year in a row. The fact that we have been able to maintain
these high capacity utilization rates is due to heightened efficiency at
each of the companies involved, which has reduced inspection down time
while maintaining high safety standards.
Each 1% increase in the nuclear power capacity utilization rate saves approximately
900,000 kl of the fuel oil that would be required to operate a one-million
kW oil-fired generating facility (50% capacity utilization rate) for about
10 months. At the same time, this reduces the CO22 output of the nation's
electric power generating facilities by 1%, or three million tons, and
saves more than \10 billion.
As these figures indicate, nuclear power plays a very important role in
improving the efficiency of electric power-generating operations, and while
according safety the highest priority, it is essential that we continue
to improve power-generating efficiency on an industry-wide basis.