Company Information
Name: Chubu Electric Power Co. Inc.
Market: Japan
Installed capacity (as of 2023): 57.2 GW (Thermal),¹ 9.2 GW (Non-thermal)
Climate-related targets committed:
Long-term: Net zero CO₂ emissions by 2050
Medium-term:
– 50% CO₂ emissions reduction or more derived from electricity sold to customers by 2030 compared to FY2013
– Expand renewable generation capacity by at least 3.2 GW by 2030
Engagement Updates
In 2019, Chubu moved all thermal power electricity generation business, including coal assets, to JERA,² a joint venture with Tokyo Electric Power Company (TEPCO). The Chubu Electric engagement group continued working actively with the company last year. This involved focusing on a detailed decarbonization strategy, especially on the feasibility of the ammonia and hydrogen co-firing strategy and progress on the restart plan of the Hamaoka Nuclear Power Plant and that of renewable expansion. Further to the decarbonization strategy, the engagement group discussed governance, physical resilience, and public policy with the company. As with the previous year, the engagement group was pleased to have Chubu and JERA representatives in the engagement meeting and share their perspectives with investors.
Chubu’s decarbonization plan relies on renewable expansion and restarting the Hamaoka Nuclear Power Plant. With Chubu’s coal assets sitting with JERA, the company is committed to decommissioning all inefficient coal fired power plants (supercritical or less) by 2030 and starting the full-scale operation of ammonia co-firing technologies in the 2030s.
This year, Chubu started using performance-based stock compensation for directors’ remuneration. It used the volume of CO2 emissions as one performance indicator, impacting 10% of total directors’ remuneration. Chubu also disclosed its board of directors’ skills matrix in their integrated report, which includes ‘Technologies Contributing to Electric Power Supply & Environment’ as one such skill. In April 2024, Chubu faced climate resolutions filed by non-governmental organizations (NGOs) on the disclosure of directors’ competencies for the effective management of climate-related business risks and opportunities. While the proposal did not receive the two-thirds support hurdle needed for approval, it did receive over 20% shareholder support.³ This demonstrates growing investor interest in seeing more board members with climate risk competencies. Investors are also increasingly interested in the assessment and selection criteria for directors’ climate capabilities.⁴
The engagement group will continue working with Chubu Electric and JERA on feasibility and a detailed timeline to shift from coal to ammonia and to convey investor expectations for earlier coal phaseout, including overseas operations.