Environment Social Governance Finance - J-POWER

1 J-POWER GroupAnnual Report2017J-POWER Group Annual Report 2017 Printed in Power Development Co., Planning & Administration DepartmentCorporate Planning Office15-1, Ginza 6-chome, Chuo-ku, Tokyo 104-8165, JAPAN TEL: +81-3-3546-2211 E-Mail: GroupAnnual Report2017J-POWER Group Annual Report 2017 Printed in Power Development Co., Planning & Administration DepartmentCorporate Planning Office15-1, Ginza 6-chome, Chuo-ku, Tokyo 104-8165, JAPAN TEL: +81-3-3546-2211 E-Mail: its establishment by the government in 1952 to overcome the power shortages in postwar Japan, J-POWER (Electric Power Development Co., Ltd.) has developed its business in the wholesale supply of hydro-electric and thermal power, conducted a power transmission business through its trunk transmission lines that connect each domestic region, and contributed to the stable supply of electric power in Japan.

2 Listed on the Tokyo Stock Exchange s First Section and thus becoming fully privatized in 2004, J-POWER has been developing new businesses, including electric power generation businesses in foreign countries where growth is expected, and renewable energy, such as wind and geothermal power. Currently, Japanese power companies are facing a variety of business circumstances, including electricity sys-tem reform, but, by making the most of its expertise regarding leading-edge technologies developed through-out the world and its proven record of trustworthy performance, J-POWER is making steady and farsighted progress on the basis of its coexistence of energy and the Environment Group Profile4J-POWER Group Business Development throughout Japan6 Message from President Toshifumi Watanabe7An Interview with the President12 Japan s Electric Power Supply System14J-POWER Group Medium-Term Management Plan Facing the Challenge of Further Growth 16 Measures to Reinforce Safety for Ohma Nuclear Power Plant (Overview)18 Business Overview18 Electric Power Business 18 Domestic Electric Power Business (Hydroelectric Power) 19 Domestic Electric Power Business (Wind Power) 20 Domestic Electric Power Business (Thermal Power)

3 22 Domestic Electric Power Business (Transmission/Transformation)23 Electric Power-Related Business24 Overseas Business28 Other Business 29E ( Environment ) S ( Social ) G ( Governance )30 E ( Environment ) 30 Environmental Initiatives 36 Initiatives toward Carbon Reduction 40 Initiatives toward Environmental Preservation 41 Preservation of Natural Environment 42 Environmental DataJ-POWER s HistoryTrends in J-POWER s Power Generation CapacityPower Generation Capacity (MW)025,00020,00015,00010,0005,000 September 1952J-POWER established as a government-funded company based on the Electric Power Development Promotion Law (Law No. 283 of July 31, 1952) October 1965 Began operating the Sakuma Frequency Converter Station to link the different frequencies of eastern and western JapanApril 1956 Began operating the Sakuma Power Plant as J-POWER s first large-scale hydroelectric power plant (350 MW)November 1962 Provided consulting services for the Tacna Hydropower Project in Peru, the starting point of overseas consulting operationsNovember 1972 Began operating Shintoyone Power Plant (1,125 MW), J-POWER s first large-scale pumped storage hydroelectric power plant with a capacity over 1,000 MWJanuary 1981 Began operating Matsushima Thermal Power Plant No.

4 1 (500 MW), Japan s first power plant fueled primarily with imported coal. No. 2 (500 MW) began operations in June of that yearDecember 1979 Began operating the Kitahon HVDC Link between Hokkaido and Honshu(As of March 31) Domestic Electric Power Business (Hydroelectric) Domestic Electric Power Business (Thermal) Overseas Power Generation Business Domestic Electric Power Business (Wind)Note: Includes capacity of consolidated subsidiaries and equity-method affiliates. Capacity is multiplied by J-POWER s investment ratio (equity ratio).Development of large-scale hydroelectric power plantsConstruction of high-voltage transmission linesDevelopment of large-scale pumped storage hydroelectric power plantsExpansion of interconnecting lines and trunk linesEstablishment of transmission lines and a frequency converter stationConstruction of a nuclear power plant20142013201220112010200920082007200 6200520042003200220012000201620172015199 5199019851980197519701965196019551950 Development of thermal power plants fueled by imported coalDevelopment of thermal power plants fueled by domestic coalDeveloping overseas consulting businessJuly 2000 Began operating Tachibanawan Thermal Power Plant No.

5 1 (1,050 MW), Japan s largest coal-fired power generation 2 (1,050 MW) began operations in December of that yearApril 2002 Began operating Isogo Thermal Power Plant New No. 1 (600 MW).New No. 2 (600 MW) began operations in July 2009 December 2000 Acquired an interest in Tianshi Thermal Power Plant in China (50 MW, low-grade coal and coal waste)December 2000 Began operating the Tomamae Winvilla Wind Farm (31 MW), J-POWER Group s first wind power facilityOctober 2004 Listed on the First Section of Tokyo Stock ExchangeDevelopment of wind power generation businessDevelopment of overseas power generation businessMay 2006 Acquired equity in Tenaska Frontier Power Plant (830 MW, gas), J-POWER s first power plant ownership in the United StatesMay 2007/March 2008 Began operating Kaeng Khoi 2 Power Plant (1,468 MW, gas)

6 In ThailandJune, December 2014 Began operating Nong Saeng IPP (1,600 MW, gas) in ThailandMay 2008 Began construction of the Ohma Nuclear Power Plant (1,383 MW), J-POWER s first nuclear power plantApril 2015 Began operating Kuttari Power Plant ( MW, small- to medium-scale hydroelectric)May 2016 Completed comprehensive renewal of Akiba No. 2 ( MW, hydroelectric with increased capacity)August, November 2012 Began operating Hezhou Power Plant (2,090 MW, coal) in ChinaJune, December 2015 Began operating U-Thai IPP (1,600 MW, gas) in ThailandProfileCorporate PhilosophyWe will meet people s needs for energy without fail, and play our part for the sustainable development of Japan and the rest of the MissionWe value integrity and pride, which drive everything we pursue harmony with the Environment , and thrive in the trust of communities where we live and regard profits as the source of our growth, and share the fruits with the refine our knowledge constantly, to be the pioneering leader in technologies and unite diverse personalities and passions as one, and dare create a better Credo46 S ( Social )

7 46 Respect for Human Resources 49 Health and Safety Management 51 Contribution to Society52 G ( Governance ) 52 Corporate Governance 57 Compliance & Risk Management 60 Emergency Management61 Financial Section/Fact Data62 Consolidated Financial Statements66 Management s Discussion and Analysis72 Financial and Operating Highlights78 10-Year Consolidated Financial Data88 10-Year Non-Consolidated Financial Data94 Major Group Companies96 Corporate Profile/Stock InformationForward-Looking statementsStatements in this annual report, other than those of his-torical fact, are forward-looking statements about the future performance of J-POWER that are based on man-agement s assumptions and beliefs in light of information currently available.

8 And involve both known and unknown risks and other uncertainties. Actual events and results may differ materially from those anticipated in these of Monetary Amounts and other FiguresFor monetary amounts and electric power sales, figures less than the indicated unit are rounded down. For other amounts, figures less than the indicated unit are rounded to the nearest unit unless otherwise s HistoryTrends in J-POWER s Power Generation CapacityPower Generation Capacity (MW)025,00020,00015,00010,0005,000 September 1952J-POWER established as a government-funded company based on the Electric Power Development Promotion Law (Law No. 283 of July 31, 1952) October 1965 Began operating the Sakuma Frequency Converter Station to link the different frequencies of eastern and western JapanApril 1956 Began operating the Sakuma Power Plant as J-POWER s first large-scale hydroelectric power plant (350 MW)November 1962 Provided consulting services for the Tacna Hydropower Project in Peru, the starting point of overseas consulting operationsNovember 1972 Began operating Shintoyone Power Plant (1,125 MW), J-POWER s first large-scale pumped storage hydroelectric power plant with a capacity over 1,000 MWJanuary 1981 Began operating Matsushima Thermal Power Plant No.

9 1 (500 MW), Japan s first power plant fueled primarily with imported coal. No. 2 (500 MW) began operations in June of that yearDecember 1979 Began operating the Kitahon HVDC Link between Hokkaido and Honshu(As of March 31) Domestic Electric Power Business (Hydroelectric) Domestic Electric Power Business (Thermal) Overseas Power Generation Business Domestic Electric Power Business (Wind)Note: Includes capacity of consolidated subsidiaries and equity-method affiliates. Capacity is multiplied by J-POWER s investment ratio (equity ratio).Development of large-scale hydroelectric power plantsConstruction of high-voltage transmission linesDevelopment of large-scale pumped storage hydroelectric power plantsExpansion of interconnecting lines and trunk linesEstablishment of transmission lines and a frequency converter stationConstruction of a nuclear power plant20142013201220112010200920082007200 6200520042003200220012000201620172015199 5199019851980197519701965196019551950 Development of thermal power plants fueled by imported coalDevelopment of thermal power plants fueled by domestic coalDeveloping overseas consulting businessJuly 2000 Began operating Tachibanawan Thermal Power Plant No.

10 1 (1,050 MW), Japan s largest coal-fired power generation 2 (1,050 MW) began operations in December of that yearApril 2002 Began operating Isogo Thermal Power Plant New No. 1 (600 MW).New No. 2 (600 MW) began operations in July