Tokyo Electric is planning a major price hike for electricity with respect to major users as of April. Because of this, Chairman Masahiro Toyoda of the Japan Industrial and Medical Gases Association (JIMGA) held a press conference on February 3.

Chairman Toyoda noted, “The total annual demand of electric power for all of Japan comes to 906.4 billion kW, of which the entire industrial and medical gas industries use about 1% a year, or 9 billion kWh. This is equivalent to about 3% of the total demand of the manufacturing industry. Because of this, the amount of electric power purchased for sales of air separated gases such as oxygen, nitrogen, and argon exceeds 20 million kW per million yen of sales. This is about 40 times the average for the general manufacturing industry. The ratio of the electric power fee in the prime cost is extremely high. Because of this, the expected price hike by Tokyo Electric Power would result in an increase in cost for the industrial and medical gas companies in the area under the jurisdiction of Tokyo Electric Power of 6 billion on average a year. Also, if the same price hike were to permeate throughout the country, the amount affected would come to 17 billion. It would be absolutely impossible to absorb this just through the corporate efforts themselves.” Also, power generation has been moving over to thermal power plants since the incident at the nuclear power plant last year. “Taking into consideration the rise in the price of LNG, the fuel for thermal power generation, as well as the system for buying renewable energy, and measures to counter global warming on the part of the government the burden caused by the rise in electric power fees could well become even greater. Industrial gas users too are concerned that trend will accelerate to shift production overseas where power fees and other manufacturing costs are lower. This will greatly affect the continuance of the industry, including JIMGA which is composed of 1,110 companies and also encompasses 4 major gas producers,” he mentioned.

In addition, Toyoda stated, “I will check the intention of the Ministry of the Economy, Trade, and Industry, and put together the opinions of JIMGA. I will strongly bring to the attention of Tokyo Electric Power, as I noted today, the burden caused by the hike in electric power fees on the industrial and medical gas industries as well as the size of the effect on the demand industries.”