Current Situation of Tohoku EPCO's Fuel Procurement

Eleventh Japan–Russia Energy and Environment Dialogue in Niigata R1-HAMAYA

Current Situation of Tohoku EPCO’s Fuel Procurement

January 30th, 2019 Tohoku Electric Power Company

Our Service Area and Electric Power Sales 1

 Largest Service Area among 10 Major Electric Power Companies.  Our Sales Rapidly Dropped After Great East Japan Earthquake in March 2011.

Our Service Area Aomori, Iwate, Akita, Miyagi, Yamagata, Fukushima and Niigata Pref. (GWh)

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Our Major Power Stations 2

 We Are Diversifying the Location of Our Power Stations. No. of Capacity Main Unit (MW) Fuel [Thermal] Hachinohe 1 416 Gas Note: Thermal power site Akita 4 1,633 Oil Higashidori Nuclear power site Noshiro 2 1,200 Coal Geothermal site Sendai 1 468 Gas Hachinohe Shin-Sendai 1 1,046 Gas Noshiro Sumikawa Haramachi 2 2,000 Coal Kakkonda Akita Higashi-Niigata 7 5,149 Gas Niigata 1 109 Gas Uenotai [Geothermal] Sendai Kakkonda 2 80 Onagawa Higashi-Niigata Uenotai 1 29 Shin-Sendai Sumikawa 1 50 Niigata Yanaizu-Nishiyama 1 30 Haramachi Yanaizu-Nishiyama [Nuclear] Onagawa 2 1,650 Higashidori 1 1,100

Our Power Source Composition 3

 We Are Diversifying Our Fuel Sources.  Share of Gas Is Growing Since Great East Japan Earthquake.

LNG Terminals and Gas Pipeline 4

 Two LNG Terminals Are Located at Both the Sea of Japan and Pacific Side.

Shin-Sendai Power Station LNG terminal

Niigata LNG Terminal operated by Nihonkai LNG

Niigata-Sendai Gas Pipeline - Total Length： Approx. 260 km - Owned/Operated by JAPEX

Our LNG Procurement Volume (FY2010-17) 5

 Since First LNG from Sakhalin in 2010FY, LNG Share of Russia Is Increasing.

(thousand tons)

Our Fuel Procurement Policy 6

 We Focus on “Flexibility” as well as “Stability” and “Economic Efficiency” in Terms of Fuel Procurement. Our Fuel Procurement Policy

Economic Stability Flexibility Efficiency

Solar Power Generations (MW) Connected to the Grid in Japan 4,500.0 4,204.1 4,000.0 3,415.1 3,500.0 3,000.0 2,500.0 2,333.9 2,000.0 1,500.0 1,359.9 1,000.0 663.2 491.4 500.0 361.8 0.0 2010FY 2011FY 2012FY 2013FY 2014FY 2015FY 2016FY (Source: FEPC)

Enhancing Cost Competitiveness & Resilience 7

 We Are Continuing Our Efforts for Efficient Procurement of Fuels.

 Through introduction of new fuel procurement schemes as well as diversification of fuel pricing systems, we strive to further enhance our cost competitiveness.  Through continuous review of our procurement portfolio, including diverse procurement sources, we quest for more efficient and optimal fuel procurement with emphasis on stability, economic efficiency and resilience.

Relationship between Tohoku and Russia 8

 Through Procurement of Fuels, Our Relationship with Russia Is Becoming More Important.

◆ LNG Long Term Contract Project Contract Period Volume Term Sakhalin Ⅱ 2010‐29FY (20 years) 0.42 mtpa FOB

◆ LNG Spot Purchase from Russia 64 thousand MT (2017FY)

 Russia is geographically close to Tohoku region and has abundant natural resources.  Russia will continue to be a important supplier for Tohoku EPCO in terms of energy security.

Thank You for Your Attention.