Capital alliance negotiations by Tokyo Electric Power Company Holdings (TEPCO Holdings) are proving difficult, raising the possibility that they will extend into next year. As an expansion of data-centre construction and a scandal at Chubu Electric Power unsettle governance in the electric power industry, reports indicate that JERA’s listing plans are also having external repercussions.
Against a backdrop of rising costs for dealing with the Fukushima Daiichi accident and developments involving the recovery of decontamination costs through equity, negotiations over a capital alliance involving the acceptance of external capital by TEPCO Holdings are reported to have exceeded the initial target of the end of September 2026 and may not be concluded until next year. The introduction of external capital is intended to attract approximately ¥500 billion a year in growth-investment funds, but the uncertain timing of finalising accident-response costs is regarded as an issue.
Amid continued turmoil in the industry, including scandals at Chubu Electric Power, JERA is pursuing a listing while being affected by the alliance negotiations of its parent, TEPCO Holdings. Attention is focused on the aims of the IPO and the intentions of the parties involved before and after the listing. The focus is also on how the governance and strategy of JERA, which was established through a joint investment, are linked to TEPCO Holdings’ alliance developments.
The data-centre construction boom is disrupting the balance between the government’s decarbonisation policy and energy supply, raising questions about the feasibility of the GX strategy. Debate is deepening within an industry undergoing restructuring, including JERA, over how to achieve carbon neutrality by 2050 while accommodating rising electricity demand.
The cost of dealing with the Fukushima accident is reported to be ¥23.4 trillion, and the response scheme based on unlimited liability has emerged as a practical issue 15 years after the earthquake. Concerns have been raised that recovery of decontamination costs through equity and shortfalls in decommissioning costs could cause the scheme to malfunction.
The selection of TEPCO Holdings’ next president is at a crossroads between extending the long-serving administration and changing the president, with attention focused on the appointment conditions and movements of potential rivals. Progress on restarting nuclear power plants and the direction of alliances are expected to affect the future of Japan’s energy infrastructure.