* Feb generation plunges 15.8 pct due to weak industry demand
* Thermal power generation down 30 pct, biggest ever fall
* Oil burn more than halves to lowest since Sept. '06
* LNG and coal use fall more than 10 pct (Adds oil burn falling to lowest since '06)
By Osamu Tsukimori
TOKYO, March 13 (Reuters) - Japan's electricity generation in February plunged 15.8 percent from a year earlier, marking the biggest decline on record as demand slumped amid deep recession and unusually mild weather, while consumption of oil to generate power fell to its lowest in nearly two and a half years.
The drop, which was bigger than many had expected, was a reminder that the economy in the world's third-biggest power consumer is in its sharpest contraction since the oil crisis in 1974, shrinking 3.2 percent in the last quarter of 2008, weakening demand for coal, LNG and oil. [ID:nT374275]
"It's shocking. I didn't think (the fall) would top 10 percent," said an energy analyst at a Japanese brokerage, who spoke on condition of anonymity.
And if electricity demand remains weak, consumption of carbon fuels -- particularly oil -- could decline further once top utility TEPCO restarts operations at the world's biggest nuclear facility, which is expected to restart within months after a nearly two-year shutdown following an earthquake.
The 10 utilities generated 74.47 billion kilowatt-hours of electricity in February, marking the seventh straight monthly decline, the Federation of Electric Power Companies of Japan said. It was the first time since February 1997 that all the firms had reported falls in electricity generation.
Japan's weather, which has been milder than normal since late January, is projected to stay mostly warmer in the coming month, the meteorological agency said on Friday.
Japan's industrial production -- which normally rises and falls mostly in line with power output -- fell 10.2 percent in January from a month earlier, the biggest fall on record, data showed on Friday. The February data is due out later this month.
Thermal power output plunged 29.6 percent, the biggest ever drop, helped by a rise in the nuclear utilisation rate of 10.8 percentage points versus a year ago to 67 percent. That helped more than halve consumption of oil, the most expensive fuel in the energy mix, to its lowest level since September 2006.
For a graphic on the nuclear utilisation rate and oil burning, click on: here
Six of the country's 10 utilities reported their biggest percentage falls in a generation, led by Chubu Electric Power's (9502.T) 22.7 percent slide. Chubu's region includes the home base of major user Toyota Motor Corp (7203.T).
EYES ON KK
Future demand for power plant fuel will hinge on whether Tokyo Electric (9501.T) (TEPCO) is allowed to restart the No.7 generator at the Kashiwazaki-Kariwa nuclear plant, shut in July 2007.
Their plans were dealt a setback on Wednesday after a local governor said he would not grant approval for a restart until the company issues satisfactory plans on how to prevent outbreaks of fire there, and some analysts now expect the unit to resume operations only in the new fiscal year from April.[ID:nT12704]
Industry researcher Japan Electric Power Survey Committee projected last week that demand from the industrial sector, which started falling in October due to the economic slowdown, is unlikely to turn positive until February or March 2010.
For a graphic on the consumption of coal and LNG, click on: here
The five other firms that reported the biggest percentage declines in power generation were Hokkaido Electric (9509.T), Kansai Electric (9503.T), Chugoku Electric (9504.T), Shikoku Electric (9507.T) and Kyushu Electric (9508.T).
Following is a table of energy consumption at Tokyo Electric Power and the 10 utilities' total in February, based on the data (volumes of crude, fuel oil and naphtha in kilolitres; LNG and coal in tonnes; year-on-year percentage changes in parentheses):
TEPCO INDUSTRY TOTAL Coal : 341,153 (+1%) 4,123,116 (-15%) Fuel oil : 436,819 (-36%) 653,184 (-52%) Crude oil: 157,964 (-64%) 293,480 (-83%) LNG : 1,432,664 (-18%) 3,018,538 (-18%) NAPHTHA : 83 n.a. 83 n/a