asahi.com��Toshiba suspends �100 billion coal power plants over CO2, profit concerns�-�ENGLISH

Toshiba Corp. has suspended a 100 billion yen project with Orix Corp. to build two coal-fired power plants in Ube, Yamaguchi Prefecture, because of concerns over global warming and profitability, officials said.

The electronics manufacturer on Monday withdrew its environmental impact assessment reports it had submitted to authorities after reviewing the amount of carbon dioxide the plants would produce and other factors.

That means the company will most likely scrap its plans to build the two plants, each with a capacity of 500,000 kilowatts, although there remains a possibility that it may construct smaller facilities.

Sigma Power Yamaguchi Corp., a planning company founded by Toshiba and Orix, will not be dissolved. It is 66.8-percent owned by Toshiba and the remainder by Orix.

"It is difficult to forecast profitability because the price of coal has increased 50 percent above the level we had expected and the growth in electricity demand has been slowing," a Toshiba official said.

"We also decided (to suspend the project) from an overall perspective because of growing concerns over global environmental issues."

Under the Kyoto Protocol, Japan is required to reduce emissions of greenhouse gases, such as CO2, by 6 percent by 2012 from the 1990 level. The international agreement took effect in February 2005.

Under the government's plan to achieve that target, regional electric utilities, such as Tokyo Electric Power Co., are effectively required to reduce CO2 emissions by about 17 million tons a year. The companies have been instructed to develop plans to reduce CO2 output.

However, new electricity retailers such as Sigma Power are under no specific obligations concerning greenhouse gas emissions.

If Sigma Power's two plants were put into operation, they would produce about 5.82 million tons of CO2 annually, equivalent to one-third of the reduction target for each regional utility. The plants were scheduled to start operations in 2012.

Coal is estimated to generate twice as much CO2 as liquefied natural gas although technological developments have reduced the environmental damage caused by the process.(IHT/Asahi: March 1,2006)