How does a utility make money in the midst of one of the worst hits to power demand in modern history? By burning a little coal.
At least, that's what Kyushu Electric Power Co did. The utility in the southern Japanese island known for its beaches and active volcanoes surprised analysts Friday by beating forecasts for quarterly earnings.
It did so in part by running its giant, brand-new coal plant and selling the electricity to other regions of the country.
Despite growing international pressure Japan has yet to kick its reliance on coal, which is still expected to account for 26 per cent of the country's power generation in 2030, down from 32 per cent in the year ended March 2019.
A plan to shut 100 inefficient coal-fired power units won't cut emissions enough to meet the country's 2050 reduction target, according to a report from BloombergNEF.
"Matsuura No. 2 unit is very efficient as it uses ultra-supercritical power generation system," Naoko Iguchi, a company spokeswoman, said by phone on Friday.
"It's in line with the METI's policy of expanding efficient coal power units while phasing out inefficient coal units," she said, referring to the country's powerful Ministry of Economy, Trade and Industry.
Kyushu Electric's operating income for the quarter ending June 30 beat all analyst estimates, according to data compiled by Bloomberg.
The utility boosted the power it sold to the wholesale market by 54 per cent from the year before, thanks in large part to the new Matsuura unit, which came online in December, said Makoto Kamimae, a company director.