UPDATE 1-TEPCO wins approval to restart Japan nuclear plant

* TEPCO wins long-awaited OK to restart nuclear plant

* Test run could come as early as Friday

By Osamu Tsukimori

NIIGATA, Japan, May 7 (Reuters) - Tokyo Electric Power Co. (TEPCO) (9501.T) won permission on Thursday to restart the world's biggest nuclear plant nearly two years after an earthquake, a step towards cutting its fuel imports and curbing carbon emissions.

The governor of Japan's Niigata prefecture approved trials to restart the 1,356-megawatt No.7 reactor at TEPCO's Kashiwazaki-Kariwa nuclear plant, despite a string of small fires at the plant since it was damaged in the quake.

TEPCO officials were not immediately available for comment on the decision, which had been expected, but prefectural officials said TEPCO could restart the No.7 reactor as early as Friday.

The governor said he would make contact with TEPCO later in the day, and the firm would be required to keep a prefectural committee up to date with details of the restart.

Operating the No.7 reactor could reduce Tepco's annual fuel purchases by more than 70 billion yen ($713 million) and cut carbon dioxide emissions by 5 million tonnes, according to company and Reuters calculations.

It could also cut use of annual crude oil equivalent by 1.87 million kilolitres (32,000 barrels per day).

All seven nuclear generators at the plant have been shut down after a powerful quake hit the region on July 16, 2007, and the newest and least damaged No.7 unit will be the first to be restarted.

After the restart trials, TEPCO plans to conduct final tests including boosting electricity output to 100 percent of capacity. (Editing by Edwina Gibbs)