Japanese firms considering geothermal plants in Fukushima

TOKYO Fri Mar 23, 2012 8:07am EDT

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TOKYO (Reuters) - Japanese firms are looking at building several geothermal plants in a volcanic zone in the area worst hit by last year's nuclear disaster, a project that could gain momentum after the government eased restrictions on drilling this week.

The head of a group of firms that have studied the potential of a geothermal project in Fukushima said on Friday a consortium of about 10 companies would meet local people by early May to explain their plans to build plants with a total capacity of 270 megawatts, which would be Japan's biggest.

The consortium plans to work with local communities, including those who run hotels and inns at hot springs, to develop geothermal energy, Masaho Adachi, the chairman of Japan Geothermal Developers' Council said.

The council has already held a meeting with local government officials in the central zone of Fukushima, home to the nuclear plant crippled by an earthquake and tsumani last year, he said.

Along with high costs, protests by local communities fearful of the impact of a geothermal plant on hot springs have prevented such projects from taking off in the past.

"We should spend together a period of more than 10 years before having geothermal plants running," he said in an interview with Reuters on Friday, referring to activities such as collecting data, test drilling and environment assessment. Adachi declined to name the companies forming the consortium.

The Nikkei newspaper earlier said that the Fukushima project by a consortium of companies including Idemitsu Kosan Co and Inpex Corp would cost around 100 billion yen ($1.2 billion), with operations set to start in 2020.

Since the crisis, interest in renewable energy has jumped and a government subsidy scheme, similar to those in many countries in Europe, to force utilities to buy renewable electricity is due to start in July.

But representatives for Inpex and other firms which were reported to be taking part in the project stressed that the plans were only very conceptual and that they were nowhere near reaching a decision.

Studies show Japan, a land of volcanoes, ranks as the world's third-richest nation in geothermal power. A government study last year showed it has the potential for business to derive 14,000 MW of energy, but it currently has only 540 MW worth of commercial plants due to restrictions on development in national parks, where most resources lie.

Japan has not built a geothermal plant since 1999.

Other firms in the consortium include Mitsubishi Materials Co, Japan Petroleum Exploration Co (Japex) and Mitsui Oil Exploration Co, according to the Nikkei report. ($1 = 82.4950 Japanese yen)

(Editing by Erica Billingham)

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