Key Point of President's Regular Press Conference

July 2024 Regular Press Conference : President Hayashi's Message

July 31, 2024
Chubu Electric Power Co.,Inc.

I will be discussing the following matters today:

Financial results for the first quarter of fiscal 2024
Progress on the cooperation agreement with bp for decarbonization

Financial results for the first quarter of fiscal 2024

First, I will talk about the financial results for the first quarter of fiscal 2024.
As explained earlier by Vice President Mizutani, regarding the consolidated financial results for the first quarter, net sales decreased by 77.0 billion yen year-on-year to 820.5 billion yen, mainly due to a decrease in fuel cost adjustment and other factors.
Ordinary Income was 124.9 billion yen, a decrease of 118.0 billion yen year-on-year as a result of the reduction in time-lag margins, a decrease in power supply procurement proportion through the wholesale electricity trading market in Miraiz, and an increase in expenses related to supply and demand adjustment in Power Grid.
Consolidated ordinary income excluding the time-lag margins was about 111.0 billion yen, a decrease on the order of 34.0 billion yen year-on-year.

FY2024 Business Forecast

There is no change in our business outlook for FY2024, as we expect approximately the same results as those announced previously on April 26.
Consolidated net sales are expected to be approximately 3,600 billion yen, consolidated ordinary income is expected to be approximately 215.0 billion yen, and net income attributable to owners of the parent is expected to be approximately 170.0 billion yen.

Progress on the cooperation agreement with bp for decarbonization

Next, I would like to talk about the progress of the cooperation agreement with bp for decarbonization.
Discussions on the formulation of the Seventh Basic Energy Plan are currently underway.
We believe that carbon neutrality by 2050 is a very challenging goal, and to realize it, we need to address all possible choices, including the promotion of renewable energy and the maximum use of nuclear power, rather than reducing the number of measures we should be taking.
In Japan, the law on carbon dioxide capture and storage ("CCS") projects, known as CCS Business Act, was enacted in May of this year, and the improvement of the business environment within the country is in progress.
CCS and CCUS (Carbon dioxide Capture, Utilization and Storage) have been positioned by the national council as one of the key technology options for balancing Japan's decarbonization with industrial and energy policies, and we believe that they can make a significant contribution to reducing CO₂ emissions in areas that are difficult to decarbonize.
In February last year, Chubu Electric Power concluded a cooperation agreement with bp, a British energy company, for the decarbonization of Japan and the Asian region, and we started by studying the feasibility of CCUS as a way to support the decarbonization around the Port of Nagoya.
Subsequently, in September last year, Chubu Electric Power concluded another agreement with BP Berau, a subsidiary of bp, to conduct a feasibility study ("FS") on the capture, transport, storage and effective utilization of CO₂, targeting Tangguh, Indonesia as a CO₂ storage site.
The Port of Nagoya, the objective of this FS, is Japan's largest port in terms of cargo handling volume as an industrial cluster, and its annual CO₂ emissions in FY2021 were approximately 30 million tons, accounting for about 3% of total CO₂ emissions in Japan.
The FS is characterized by the fact that a detailed and efficient study towards commercialization became possible by selecting Tangguh, where bp is currently studying for CCUS, as the storage site, as well as by studying the value chain entirely, from capture to storage.
The study was completed at the end of March 2024, and compiled points such as "the amount of CO₂ captured around the Port of Nagoya" and "the scale of transport vessels required for the overseas transportation of CO₂."
The first point is regarding the amount of CO₂ captured.
We assume that between 2030 and 2050, 5 to 20 million tons of CO₂ can be captured annually in the vicinity of the Port of Nagoya.
The second point is about the transportation of CO₂.
It is assumed that, in 2050, 20 million tons of CO₂ will require up to 20 vessels with a loading capacity of 50,000 m³ to 80,000 m³.
We believe that the size of this transport vessel is one of the largest in the world among the CCUS projects requiring overseas transportation announced to date.
In cooperation with bp, we will further study the commercialization of the CCUS project, but the cooperation of many parties, including CO₂ generators, will be indispensable for the realization of the CCUS project.
We would like to expand our circle of cooperation by promoting discussions with a number of CO₂ generators based in and around the Port of Nagoya who are interested in our initiatives.
In order to meet the expectations of our customers and to achieve carbon neutrality by 2050, Chubu Electric Power will continue to work toward this goal, taking into consideration the progress of the government's efforts to improve the business environment and other factors, as well as the concrete details of the project, with the aim of commencing operations in 2030.
This ends my presentation.

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