OverView of Power Enhancing the Cultivating Group Corporate Business Activities Generation and Power Network Safety of Nuclear New Business Companies’ Environment Support for Local Human Corporate Slogan (Value Chain) Sales Company Company Power Stations Opportunities Efforts Communities Resources Governance Power Generation and Sales Company ▪ Efforts to Enhance Thermal Efficiency Enhanced thermal efficiency for thermal power generation are planning to build the Joetsu Thermal Power Station Unit 1 Mission Statement reduces the use of fossil fuels and contributes to the effective in order not only to ensure a steady supply of electricity but use of energy resources. Above all, it helps control CO2 also to achieve high economic efficiency and reduce To offer our customers high-quality and affordable comprehensive emissions. Hence, we actively use thermal power technologies environmental burdens. energy services, with the utmost emphasis on safety. that enable high thermal efficiency. The Noshiro Thermal Power Station Unit 3 has adopted The Higashi Niigata Power Station Series 3, which went into ultra-super critical pressure (USC) as a way to achieve higher Vision operation in 1985, Japan’s first commercial-use, high-capacity thermal efficiency than those of existing Units 1 and 2. Joetsu gas combined-cycle power facility, and achieved thermal Thermal Power Station Unit 1, which is a combined cycle Power generation and sales teams work as one unit to help enrich efficiency of about 48% -- the highest efficiency possible at the power facility with thermal efficiency of 63% or higher (the our customers’ lives and develop business. time. Higashi Niigata Power Station Series 4 and Sendai highest we have ever achieved), aims to achieve high Thermal Power Station Unit 4 later achieved even higher economic efficiency and reduce our impact on the We work to maximize profits by taking on the challenge of achieving - efficiency, and in July 2016, Shin-Sendai Thermal Power environment. further growth and enhancing our cost competitiveness and offerings Station Series 3 went into full operation and accomplished We will keep ourselves committed to further enhancing that put us at an advantage.- thermal efficiency of over 60%, which was the world’s highest. economic efficiency and conserving the environment, with Furthermore, we have steadily been working on the safety as our top priority. We adopted the system that integrates power generation and sales into one unit so construction of the Noshiro Thermal Power Station Unit 3 and that our employees work more closely together to offer comprehensive services and make decisions smoothly, transcending the conventional boundary between the Thermal Efficiency at Thermal Power Stations (LHV standard) two different areas. All employees in Power Generation and Sales Company are Thermal Efficiency (%) 65 committed to meeting our customers’ needs and promoting local projects unique to Joetsu Unit 1 Toshinori Abe Shin-Sendai Unit 3 63 or higher President of Power Generation Tohoku Electric Power, in order to encourage people to choose us as their service Sendai Unit 4 60 or higher and Sales Company 60 provider. In this way, we can maximize our profits. Higashi Niigata Series 4-2 Japan’s first high-capacity gas combined-cycle power facility Higashi Niigata 55 for commercial use Series 4-1 Power Generation Business 50 Higashi Niigata Series 3 46.2 Thermal Power Generation (2017) On the other hand, considering future demand and our power 45 source development plans along with projected maintenance Shin-Sendai Unit 2 ▪ Efforts to Achieve Optimal Power Portfolio expenses, we have decided to close down Akita Thermal Niigata Unit 3 40 We are working to build an optimal power portfolio that Power Station Unit 5 and Higashi Niigata Thermal Power combines different energy sources in a well-balanced manner, Station Unit 5, which served as emergency power sources to in order to achieve a competitive advantage and ensure the supply electricity after the Great East Japan Earthquake, and 35 steady supply of affordable electricity needed to support the Niigata Thermal Power Station Unit 4, whose facilities are 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2016 2017 FY2023 New stations’ thermal efficiency Existing stations’ total thermal efficiency region in recovery and development. aging. We also plan to move the gas turbines at Akita Thermal (design value of rated output) (actual records of gas-, coal-, and oil-fired thermal power) In the area of thermal power generation, the construction of Power Station Unit 5 and Higashi Niigata Thermal Power * LHV standard : Based on the heating value without the condensing heat of moisture. Condensing heat is generated from moisture contained in fuels by combustion. the Noshiro Thermal Power Station Unit 3 and the Joetsu Station Unit 5 to Higashi Niigata Thermal Power Station Series Thermal Power Station Unit 1 is underway as part of our efforts 4-1, to effectively re-use equipment from closed facilities and ▪ Efforts to Adopt IoT and Big Data to build and add economical thermal power sources. improve thermal efficiency, resulting in lower fuel costs. In September 2017, Tohoku Electric Power and Toshiba Using the results of this collaboration in FY2017, we will agreed to collaborate on exploring cutting-edge digital develop specific systems and conduct verification tests. We In June 2017, the Shin-Sendai Thermal Power technologies, such as IoT and big data analytics, in order to aim to apply the technologies to all our thermal power stations Replacement Project won the Edison Award from further enhance the thermal efficiency of our thermal power by the end of FY2019. Hachinohe (LNG) the Edison Electric Institute of the U.S. Noshiro Unit 3 stations. Construction began in January 2016 Noshiro (coal) Output: 600MW ConceptualConceptual Image Image of Systems of Systems Advanced Advanced by Cutting-edge by Cutting-edge Digital Technologies Digital Technologies Thermal efficiency: 44.8%(LHV standard) Akita (oil) Scheduled to go into operation in June 2020 Noshiro Thermal Hachinohe Cutting-edge Exploration Topic 1: Sakata (coal) Power Station Thermal Power Station digital How to detect abnormalities Sendai (natural gas) technologies of the systems as quickly as (additional possible (using technologies Joetsu Unit 1 Higashi Niigata Akita Thermal Sendai Thermal Shin-Sendai (LNG) function) for big data analytics) Construction scheduled to begin in May 2019 (LNG etc.) Power Station Toshiba Power Station Introduce Shinchi (coal) Operation cutting-edge Output: 572MW Haramachi (coal) Advanced Management digital Thermal efficiency: 63% or higher (design in Niigata Shin-Sendai Thermal Power Stations systems progress)(LHV standard) (LNG etc.) Higashi Niigata System Shin Sendai technologies Exploration Topic 2: Scheduled to go into operation in June 2023 Thermal Power Station Thermal Power Station Joetsu (LNG) Shin-Sendai Series 3 Toshiba Effects of thermal efficiency In operation Operation enhanced by changing Nakoso (coal) Management Output: 1,046MW ThermalNiigata Efficiency Thermal (%) Haramachi operational requirements System ● Our thermal power stations Thermal efficiency: 60% or more(LHV standard) Power Station Thermal Power Station (using IoT technologies) 65 ○ Joint thermal power stations Joetsu Unit 1 about 63 Shin-Sendai Unit 3 60 or higher Sendai Unit 4 60 about 55.8 15 Annual Report 2018 Higashi Niigata Annual Report 2018 16 Series 4-2 Higashi Niigata Japan’s first large-scale gas Series 4-1 55 combined cycle power generation 50 Higashi Niigata Series 3 46.2 (2017) 45 Shin-Sendai Unit 2 Niigata Unit 3 40 35 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2016 2017 FY2023 New stations’ thermal efficiency Existing stations’ total thermal efficiency (design value of rated output) (actual records of gas-, coal-, and oil-fired thermal power) * Lower heating value-based: Based on the heating value without the condensing heat of moisture. Condensing heat is generated from moisture contained in fuels by combustion. OverView of Power Enhancing the Cultivating Group Corporate Business Activities Generation and Power Network Safety of Nuclear New Business Companies’ Environment Support for Local Human Corporate Slogan (Value Chain) Sales Company Company Power Stations Opportunities Efforts Communities Resources Governance Power Generation and Sales Company ▪ Efficient Procurement of Fuel ▪ Geothermal Power Generation Drilling a large-diameter hole as an exploration well We have adopted new procurement schemes and diversified In December 2017, we signed a basic agreement with We have actively adopted geothermal power generation since our price system in order to further boost our cost Mozambique LNG One to buy LNG from the Mozambique the Kakkonda Geothermal Power Station in Iwate went into competitiveness. LNG project. In accordance with this agreement, we will operation in 1978. We have also restructured our overall procurement portfolio by be purchasing up to about 280,000 tons of LNG annually for Our company group has six geothermal power plants in five diversifying the sources from which we buy fuels and taking 15 years starting from the early 2020s when the project is locations. The total output is 212,300 kW, which comprises other relevant measures. This way, we procure fuels more anticipated to launch the production of LNG. This is the first about 40% of the output of geothermal power generation efficiently and further optimize the procurement process, long-term agreement we have ever