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Kobe Steel to conduct environmental impact assessment for new power station project in Tochigi Prefecture, Japan

February 22, 2013

TOKYO, February 22, 2013 – Kobe Steel, Ltd. announces that it will undertake an environmental impact assessment with the aim of constructing a gas-fired power station in Moka, Tochigi Prefecture, Japan. Environmental assessment procedures are planned to begin in late March. The assessment is anticipated to take approximately three years.

Through its ironmaking operations, Kobe Steel has accumulated over half a century of know-how in operating private power generation facilities. At its Kakogawa Works in Kakogawa, Hyogo Prefecture, Kobe Steel is currently installing two gas turbine combined cycle (GTCC) power plants that use blast-furnace gas as fuel. This project is anticipated to improve thermal efficiency. At the Kobe Works in Kobe, Hyogo Prefecture, Kobe Steel built a coal-fired power station with a generation capacity of 1.4 million kilowatts. Kobe Steel has been supplying The Kansai Electric Power Co., Inc. with electricity from its Kobe power station since 2002 as a wholesale power business, which contributes to the stable supply of electricity in the Kansai region.

On this background, the new plan under consideration consists of constructing two 700,000 kW-class GTCC power plants that will be fired by city gas. Together, they will yield a total generation capacity of about 1.4 million kW. The plants are envisaged to be built adjacent to Kobe Steel’s Moka Plant at the No. 5 Kogyo Danchi, an industrial park in Kinugaoka, Moka. Start-up of operations is targeted to commence between 2019 and 2021.

Meanwhile, Tokyo Gas Co., Ltd. is proceeding with pipe-laying work for a city-gas supply line that will run from Hitachi in Ibaraki Prefecture to the industrial park in Moka. Construction of the line, which will improve the stable procurement of city gas for fuel, is anticipated to be completed in fiscal 2015. The location of the gas-fired power station under consideration has excellent social infrastructure with relatively easy connection to the power grid.

Kobe Steel would supply the electricity it generates to TEPCO, which plans to open the independent power producer (IPP) project for bidding. On November 7 last year, TEPCO unveiled its Intensive Reform Action Plan, under which it would establish “a plan to hold a 10 million kW-scale bid invitation corresponding to the replacement of aged thermal generators.”

The power station under consideration would contribute to stabilizing Kobe Steel’s profit base. If the project is realized, it will be Japan’s first fired power station located inland. The project is envisaged to contribute to society’s need for an inland location to aid the dispersion of power generation and bolster regional economic development.