Additional Acquisition of Interests in Goreway Power Plant Project, Canada
March 03, 2011
Chubu Electric Power Co.,Inc.
Toyota Tsusho Corporation
Chubu Electric Power Company, Inc., ("Chubu Electric Power"; Headquarters: Nagoya City; President: Akihisa Mizuno) and Toyota Tsusho Corporation ("Toyota Tsusho"; Headquarters: Nagoya City, Aichi Prefecture; President: Junzo Shimizu) have been participating in the Goreway Power Plant Project in Canada, in collaboration with Sithe Global Power, LLC ("Sithe Global"), since September 2009 (as announced on September 08, 2009). Twenty five percent of the investment interests for the project, which were held by the affiliates of Sithe Global (50%), were obtained by each of the two companies. This resulted in the project becoming a joint venture with fifty percent capital injection each by Chubu Electric Power and Toyota Tsusho.
This project involves the sale of electricity generated (natural gas fired output of 875 MW) by Goreway Power Plant, located about 35 kilometers northwest of Toronto, Ontario, the largest city in Canada, with the sale of electric power going to the Independent Electricity System Operator of Ontario (IESO). The company managing this power generating facility will sell electricity directly to IESO and obtain a contract from the Ontario Power Authority (OPA) guaranteeing revenue compensation*1 for 20 years after the start of commercial operations, in order to provide a stable supply of electricity over a long period.
In order to secure a sustained growth in the future, Chubu Electric Power has been maximizing management resources to promote business overseas, with the aim of expanding revenue. Furthermore, the company intends to enhance the management base by improving technological capabilities and brand power through international business, while further substantiating energy services provided domestically.
As part of such efforts the company will undertake energy related infrastructure improvement activities to expand the scale of the business, particularly in the power generation field with a focus on North America, Asia and the Middle East, to meet our target of a cumulative equity output of 10,000 MW by 2030. The acquisition of interests takes the total equity output of Chubu Electric Power to about 2,550 MW in the overseas power generating business.
Toyota Tsusho considers the power generation field in North America to be a strategically important market and aims to acquire further business interests. Toyota Tsusho intends to enhance its overseas power projects, which have the potential to provide stable revenue over a long period, aggressively promoting power projects that make use of natural gas, utilize superior systems and renewable energy sources throughout the world. The acquisition of interests takes the total equity output of Toyota Tsusho to about 1,510 MW in the overseas power generating business.
*1: This is a scheme wherein the Ontario Power Authority provides compensation to the power company provided that certain conditions are met, in order to ensure that the power company can obtain a stable operating income.