c0. introductionthe action plan for the electricity industry for achieving a low-carbon society of...

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C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization. Since its foundation in 1951, the Group has endeavoured to develop the six Tohoku prefectures and Niigata prefecture by providing low-cost, environmentally friendly electricity in a stable manner, with safety as a major premise, based on the basic principle of "no prosperity of Tohoku, no development of our group." On the other hand, the business environment surrounding the Group has entered a major turning point. These include intensified competition due to the full liberalization of the retail electricity market in April 2016, the spin-off of the transmission and distribution sector in April 2020, and changes in the supply and demand structure of electricity in line with the expansion of the introduction of renewable energy and digitization. In addition, in the six Tohoku prefectures and Niigata prefecture in which we have a business foundation, the depopulation and the declining birth rate and aging population are accelerating compared to other regions. In the future, social issues are expected to materialize in various fields such as transportation, education, and welfare, and the social structure is also about to change significantly. In an era of rapid change, the Group will be unable fulfil its raison d'etre and realize sustainable growth together with society, unless it pushes forward with its own transformation and takes on challenges on its own initiative. Based on this strong sense of crisis, the Group is committed to "contributing to the realization of a smart society for a new era originating in the Tohoku region and achieve growth along with the sustainable development of society. We formulated the Tohoku Electric Power Group's Medium-to Long-Term Vision, which is what the Group aspires to in the 2030s. Out of this strong sense of crisis, we formulated the Tohoku Electric Power Group's Medium to- Long-Term Vision, which articulates our ideal for the 2030s: to work as a group of companies that grows together with sustained development of society and contributes to achieve smart society for a new era, starting from Tohoku. Taking a broad view of diversifying social issues, we will transcend the boundaries of our existing electric power business and engage in businesses aimed at realizing a smart society (Society 5 0). Even as the power supply-demand structure changes dramatically, we will continue to play a leading role in the supply of electricity, particularly in the six Tohoku prefectures and Niigata prefecture, with the aim of achieving both the sustainable development of society and our own growth. To achieve this, we will promote structural reforms in the electricity supply business and take on the challenge of transforming our business model into a business aimed at realizing a smart society. Toward the realization of the Tohoku Electric Power Group's Medium-to Long-Term Vision, we will re-examine our aspirations since our foundation in a manner that conforms to the new era. Based on a strong recognition that this is the second founding period, we will create a value of "working alongside" that only our Group can accomplish as we open this new era. We hope that our stakeholders will continue to support us.

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

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Start date End date Indicate if you are providing emissions data for past reporting years

April 1 2018

March 31 2019

No

C0.3

(C0.3) Select the countries/areas for which you wil l be supplying data. Japan

C0.4

(C0.4) Select the currency used for all financial i nformation disclosed throughout your response.

JPY

C0.5

(C0.5) Select the option that describes the reporti ng boundary for which climate-related impacts on your business are being reported . Note that this option should align with your chosen approach for consolidating y our GHG inventory.

Financial control

C-EU0.7

(C-EU0.7) Which part of the electric utilities valu e chain does your organization operate in? Select all that apply.

Row 1

Electric utilities value chain Electricity generation Transmission Distribution

Other divisions

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-re lated issues within your organization?

Yes

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C1.1a

(C1.1a) Identify the position(s) (do not include an y names) of the individual(s) on the board with responsibility for climate-related issue s.

Position of individual(s)

Please explain

Board Chair The Representative Director & Chairman of the Board serves as the Board Chair. The Board Chair determines important matters of business execution related to climate change, receives regular reports on the status of business execution from Directors and supervises the execution of duties by Directors.

For example, in the current “Tohoku Electric Power Group’s Medium-to Long-Term Vision, we have set forth "Highlight 1: Change" as the focus of the Group's efforts to thoroughly strengthen competitiveness through drastic reforms of the power supply business. One focus area of our measures is to develop 2 million kW of renewable energy centered around the six Tohoku prefectures and Niigata prefecture. The “Tohoku Electric Power Group’s Medium-to Long-Term Vision” is approved by the Board of Directors, and the progress of measures including “Promotion of the Renewable Energy Business” is regularly reported to the Board of Directors, and supervision including review and guidance is conducted as necessary.

C1.1b

(C1.1b) Provide further details on the board’s over sight of climate-related issues.

Frequency with which climate-related issues are a scheduled agenda item

Governance mechanisms into which climate-related issues are integrated

Please explain

Scheduled - some meetings

Reviewing and guiding business plans

At the Board of Directors, important matters of business execution related to climate change are determined, and reports on the status of business execution from Directors and execution of duties by Directors are supervised. Regarding climate change issues, the Board determines important matters of business execution, receives regular reports on the status of business execution from Directors and supervises the execution of duties by Directors.

C1.2

(C1.2) Provide the highest management-level positio n(s) or committee(s) with responsibility for climate-related issues.

Name of the position(s) and/or committee(s)

Responsibility Frequency of reporting to the board on climate-related issues

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President Both assessing and managing climate-related risks and opportunities

More frequently than quarterly

C1.2a

(C1.2a) Describe where in the organizational struct ure this/these position(s) and/or committees lie, what their associated responsibilit ies are, and how climate-related issues are monitored (do not include the names of i ndividuals).

The President is the chair of the Global Environment Issue Countermeasure Council, where we deliberate on companywide environmental management, including climate change issues, from a comprehensive perspective and promote environmental management which aims for sustainable development with the local community. In addition, the President has established, under the Global Environment Issue Countermeasure Council, the Environmental Management Committee which is chaired by the Managing Executive Officer and deliberates on company-wide environmental management policies and plans, individual measures, performance evaluation across the divisions, and provides proposals and reports to the Global Environment Issue Countermeasure Council. In evaluating the policies, plans, individual measures, and results of company-wide environmental management, we have formulated the Mid-term Environmental Action Plan, which sets the promotion of measures to deal with climate change as one of our key issues. We are implementing a PDCA cycle of measures to address issues through curbing greenhouse gas emissions towards realizing a low-carbon society (steadily promoting the development of Joetsu Thermal Power No. 1, which aims to achieve the world's highest thermal efficiency), and developing 2 million kW of renewable energy, mainly in the Tohoku region and Niigata prefecture (including participating in the offshore wind power generation business in northern Akita Prefecture).

C1.3

(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets?

Yes

C1.3a

(C1.3a) Provide further details on the incentives p rovided for the management of climate-related issues (do not include the names of individuals).

Entitled to incentive

Type of incentive

Activity incentivized

Comment

Other C-Suite Officer

Monetary reward

Efficiency target

We aim to achieve the benchmark index (A index 1.00 or higher: an index that evaluates the degree of achievement of power generation efficiency for each fuel type (coal 41%, LNG 48%, oil 39%), and B index 44.3% or higher: an overall power generation efficiency that integrates

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power generation efficiency for each fuel type), which is the efficiency target for thermal power generation under the Japanese Energy Conservation Act.

Efforts to improve the thermal efficiency of thermal power generation to achieve benchmark indices will contribute to the reduction of fuel costs and, in turn, the achievement of performance targets for consolidated cash income, and will be linked to executive compensation.

All employees

Monetary reward

Emissions reduction project

Energy reduction project

Efficiency project

Behavior change related indicator

We have a monetary reward system to honour those who have contributed significantly to initiatives such as emissions reduction, energy reduction and efficiency improvement.

C2. Risks and opportunities

C2.1

(C2.1) Does your organization have a process for id entifying, assessing, and responding to climate-related risks and opportuniti es?

Yes

C2.1a

(C2.1a) How does your organization define short-, m edium- and long-term time horizons?

From (years) To (years) Comment

Short-term 0 1 Fiscal year 2018 - 2019

Medium-term 1 3 Fiscal year 2019 - 2021

Long-term 3 12 Fiscal year 2021 - 2030

C2.1b

(C2.1b) How does your organization define substanti ve financial or strategic impact on your business?

We will secure stable earnings by thoroughly strengthening our competitiveness through structural reforms in the electricity supply business. At the same time, we will take on the challenge of a "business for realizing a smart society" and make major changes to our business

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model by strategically investing management resources. We have set a financial target of JPY 320 billion for consolidated cash income by FY2024 with the aim of improving our ability to generate cash, which is necessary to achieve the transformation of our business model. We view events that prevent us from achieving this target as an important strategic impact. With regard to impacts related to climate change, we have incorporated into our valuation model certain assumptions based on similar events, both internal and external, with reference to the amount of losses incurred from large-scale natural disasters that we have experienced in the past. We define "whether or not there is a significant impact on management" based on the amount of notional company-wide losses that are calculated and evaluated.

C2.2

(C2.2) Describe your process(es) for identifying, a ssessing and responding to climate-related risks and opportunities.

Value chain stage(s) covered Direct operations

Risk management process Integrated into multi-disciplinary company-wide risk management process

Frequency of assessment More than once a year

Time horizon(s) covered Short-term Medium-term Long-term

Description of process We conduct annual surveys of short-, medium-and long-term "climate change risks and opportunities" to identify business and financial impacts. Specific processes include identifying climate-related risks and opportunities in each department and assessing the impact on the supervising department for each risk factor. Evaluation results summarizing the magnitude of the impact and countermeasures are reported to the Board of Directors following the Environmental Management Committee, which meets multiple times a year, and the Global Environmental Issue Countermeasure Council, which is chaired by the President.

【Process is applied to physical risks and opportunities】

Climate change risks that could have a significant impact on our operations include physical risks such as "sudden changes in rainfall" affecting our 209 hydroelectric plants, which is the largest number of this type of plants run by a company in Japan.

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To this end, each business section of the company identifies the impact on the supervising division for each risk factor based on data published by the Meteorological Agency and its Sendai Regional Headquarters (such as specific rainfall/snowfall data and future forecasts for the number of days on extreme heat and cold) and examples of disasters caused by major typhoons that we have experienced in the past. The magnitude of these impacts is assessed to the extent possible, and measures to deal with risks are examined. The Environmental Management Committee deliberates on the management of these risks and opportunities across divisions, which is then submitted to the Global Environment Issue Countermeasure Council, chaired by the President, and then reported to the Board of Directors.

【Process is applied to transitional risks and opportunities】

If regulations are tightened in the future to reduce emissions, we expect the importance and competitiveness of our 209 hydroelectric plants, which is the largest number of this type of plants run by a company in Japan. In addition, we view FY2020 through FY2024 as a period of change in our business model. We aim in our Medium-to-Long-Term Vision, to overcome competition and achieve sustainable growth by transforming our business model to realize a smart society. These include improving the efficiency of thermal power generation (such as promoting the development of the Joetsu Thermal Power Plant’s Unit No. 1, which aims to achieve the world's highest thermal efficiency, and discontinuing aging thermal power plants), developing 2 million kW of renewable energy, and commercializing VPPs. For this reason, as with physical risks and opportunities, each business section identifies what impact each risk factor (such as tightening regulations on CO2 emissions targets, expanding renewable energy introduction, and anticipated changes in customer behavior) has on the transition risks and opportunities of the supervising division. To the extent possible, the division assesses the magnitude of these impacts, and considers countermeasures for risks. The Environmental Management Committee deliberates on the management of these risks and opportunities across divisions, which is then submitted to the Global Environment Issue Countermeasure Council, chaired by the President, and then reported to the Board of Directors.

C2.2a

(C2.2a) Which risk types are considered in your org anization's climate-related risk assessments?

Relevance & inclusion

Please explain

Current regulation

Relevant, always included

If current environmental regulations are strengthened due to the climate change, such as speeding up achieving the interim targets of the Japanese Act on Sophisticated Methods of Energy Supply Structures, we are considering risks that could lead to an increase in power

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generation costs and a reduction in the return on investment of renewable energy power sources.

We regularly conduct operational and financial risk surveys to identify, analyze and assess risks. The material risks are deliberated by the Global Environment Issue Countermeasure Council, which is chaired by the President, and the Executive Committee. In addition, certain material risks will be incorporated into the Mid-term Plan and Business Implementation Plan of each division formulated each fiscal year. In this way, we develop an accurate PDCA cycle on a company-wide level.

Emerging regulation


We are considering the risk of financial impact if the introduction of carbon pricing measures, such as carbon taxes and emissions trading, accelerates domestically in order to achieve the targets of the Paris Agreement.

In addition, when new policies are being developed to expand the introduction of renewable energy, we are also considering risks such as a decline in FIT prices and a decline in the recoverability of investment in renewable power sources due to system changes.

We regularly conduct operational and financial risk surveys to identify, analyze and assess risks. The material risks are deliberated by the Global Environment Issue Countermeasure Council, which is chaired by the President, and the Executive Committee. In addition, certain material risks will be incorporated into the Mid-term Plan and Business Implementation Plan of each division formulated each fiscal year. In this way, we develop an accurate PDCA cycle on a company-wide level.

Technology Relevant, always included

If the development of storage battery technologies to expand the introduction of renewable energy is promoted, there is a risk that grid costs will increase and revenues will decrease.

We are also considering the possibility that if CCUS and other new technologies are put into practical use and required to be installed at thermal power plants, the operating costs of thermal power will increase, which could adversely affect our results of operations and financial condition.

We regularly conduct business and financial risk studies, including technical risks, to identify, analyze and assess risks.

The material risks are deliberated by the Global Environment Issue Countermeasure Council, which is chaired by the President, and the Executive Committee. In addition, certain material risks will be incorporated into the Mid-term Plan and Business Implementation Plan of each division formulated each fiscal year. In this way, we develop an accurate PDCA cycle on a company-wide level.

Legal Relevant, always included

We are considering the impact on our business performance and financial position in the event that natural disasters intensify due to climate change, and resident litigations or shareholder lawsuits arise against hydroelectric power plants due to frequent heavy rain disasters and accompanying river flooding. We are aware of the relatively high

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risk associated with our hydroelectric power business, as we have the largest number of hydroelectric power plants in the country. We regularly conduct business and financial risk studies, including legal risks, to identify, analyze and assess risks.


Market Relevant, always included

We will position renewable energy as a power source that will play a part in our future power supply portfolio as the main business entity responsible for renewable energy in the six Tohoku prefectures and Niigata prefecture. We will prioritize management resources with the aim of developing 2 million kW, centering on the six Tohoku prefectures and Niigata prefecture, by undertaking new development and business participation while utilizing the know-how we have accumulated to date of wind power as well as hydroelectric, solar, geothermal, and biomass power generation.

It is necessary to remain competitive in the renewable energy market, which is expected to expand further in the future. However, we are considering the financial impact that we will receive if the number of participating operators increases further and competition among renewable energy operators intensifies, or if the demand for J-Credit and the non-fossil fuel energy certificates increases due to the progress towards a low carbon society and result in price increases.

We regularly conduct business and financial risk surveys to identify, analyze and assess risks.


Reputation Relevant, always included

The Electric Power Council for a Low Carbon Society, of which we are a member, has set a target of achieving an emissions factor of about 0.37kg-CO2/kWh (end of use) for all member companies in FY2030, based on the government-announced long-term energy supply and demand forecast for FY2030. Our most recent emission factor is 0.528 kg-CO2/kWh.

We are considering the risk of receiving negative evaluations from investors and other stakeholders if our response is delayed and the emission factor does not improve as planned despite changes in customer behavior, such as an increase in demand for electricity from

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renewable energy sources and other low-carbon energy sources in the future.

In addition, if we experience delays in accelerating our divestment from coal-fired generation or in responding to climate change, we are considering the likelihood impact of higher financing costs and lower stock prices. We regularly conduct business and financial risk studies, including reputational risk, to identify, analyze and assess risks. The material risks are deliberated by the Global Environment Issue Countermeasure Council, which is chaired by the President, and the Executive Committee. In addition, certain material risks will be incorporated into the Mid-term Plan and Business Implementation Plan of each division formulated each fiscal year. In this way, we develop an accurate PDCA cycle on a company-wide level.

Acute physical


Typhoon No. 10 in August 2016 caused a large-scale power failure due to disconnection of high-voltage lines caused by falling trees, and the loss and collapse of utility poles caused by landslides and river flooding.

We are considering the impact that our performance and financial conditions will be affected by the severity of natural disasters such as typhoons caused by climate change, when power generation facilities and transmission/distribution facilities, including those of other companies that we receive electricity from, are damaged, or when the power supply is shut down for a long period of time for reasons other than facility damage, as these result in issues such as the rising cost for facility restoration and power generation.

On a regular basis, we conduct business and financial risk studies, including acute physical risks, to identify, analyze and assess risks.


Chronic physical


The chronic physical risks of climate change include the risk of flooding in the event of a disaster due to sea level rise and the risk of drought if rainfall or snowfall declines.

We own 209 hydroelectric power plants (the largest ownership in Japan) in the six Tohoku prefectures and Niigata Prefecture.

Regarding thermal power stations, there is a risk that thermal power stations will be shut down due to restrictions on water intake caused by droughts. However, it is unlikely that water intake restrictions will be implemented as would be for inland thermal power stations because our thermal power stations are located on the coast and mainly use seawater. Drought can also reduce the amount of power generated by hydroelectric power stations, which can cause fuel costs to increase.

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However, as certain adjustments are made in accordance with “Provision of Reserve for fluctuation in water levels”, the impact on business performance is considered to be limited.

C2.3

(C2.3) Have you identified any inherent climate-rel ated risks with the potential to have a substantive financial or strategic impact on your business?

Yes

C2.3a

(C2.3a) Provide details of risks identified with th e potential to have a substantive financial or strategic impact on your business.

Identifier Risk 1

Where in the value chain does the risk driver occur ? Direct operations

Risk type / Primary climate-related risk driver Chronic physical Changes in precipitation patterns and extreme variability in weather patterns

Primary potential financial impact Increased direct costs

Company- specific description We own 209 hydroelectric power plants (the largest number of this type of plants run by a company in Japan) in the six Tohoku prefectures and Niigata Prefecture, and we recognize that there is a relatively high risk of chronic changes in precipitation patterns. When the annual rainfall pattern changes chronically, for example, when heavy rainfall occurs frequently and damage to our facilities occurs, the costs for making our facilities tougher and improving restoration capabilities increase. In addition, when the power supply by hydroelectric power generation declines due to small rains, small snow, etc., there is a risk that the operation of thermal power generation will increase and the fuel cost associated with the operation of thermal power generation will increase, which will adversely affect our finances. In the case of abundant water, fuel costs will decline due to a decrease in the operation of thermal power generation and in the case of drought, fuel costs will increase.

Time horizon Short-term

Likelihood About as likely as not

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Magnitude of impact High

Are you able to provide a potential financial impac t figure? Yes, a single figure estimate

Potential financial impact figure (currency) 8,550,000,000

Potential financial impact figure - minimum (curren cy)

Potential financial impact figure - maximum (curren cy)

Explanation of financial impact figure The financial impact figure of JPY8.55 billion in FY2018 is mainly fuel costs (direct costs). JPY 8.55 billion was calculated by multiplying JPY900 million (the cost effect per 1% of water output in FY2018) by 9.5 (the water output rate in FY2018 was 90.5% (9.5% less than the average year)).

Cost of response to risk 1,100,000,000

Description of response and explanation of cost cal culation Risks are mitigated as much as possible concerning the increase in fuel costs associated with increased thermal power generation operation during drought by improving power generation efficiency without changing the amount of water used through the effective use of water resources through the establishment and renovation of hydropower plants managed. For example, as the Kanose Power Plant has deteriorated over time, large-scale renovation work has been carried out on the power plant, the number of turbine generators has been revised from six to two, and highly efficient vertical valve turbines have been adopted. As a result, the maximum output

increased by about 10% (49,500 → 54,200kW) without changing the amount of water

used. Abundant water lowers fuel costs, while droughts increase fuel costs. However certain adjustments are made based on the provision of reserve for fluctuation in water level. Risk management expenses of JPY1.1 billion indicate ”Reversal of reserve for fluctuation in water levels” in FY2018.

Comment

Identifier Risk2

Where in the value chain does the risk driver occur ? Direct operations

Risk type / Primary climate-related risk driver

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Acute physical Increased severity and frequency of extreme weather events such as cyclones and floods

Primary potential financial impact Increased indirect (operating) costs

Company- specific description In particular, in recent years, the frequency of large-scale typhoons landing in the Tohoku region, which used to be unusual, has increased. Typhoon No. 10 in August 2016 caused power outages in approximately 97,000 homes in the six Tohoku prefectures due to the breakage of high-voltage lines caused by overwhelming trees, and the loss or collapse of electric poles caused by sand collapse and river flooding. We were able to recover the power on September 4, with the exception of some regions, thanks to recovery responses, including the introduction of a total of about 9,700 people and 22 power supply vehicles from corporate groups and partner companies. However, in the event that natural disasters become even more severe due to climate change (such as frequent occurrence of large-scale typhoons on the same scale) and cause damage to facilities, long-term suspensions of power sources, or large-scale power outages, facility repair costs and alternative fuel costs could increase, impacting our business performance and financial condition.








Explanation of financial impact figure The financial impact (i.e. JPY18.5 billion) describes the amount recorded as an extraordinary loss during the Niigata - Fukushima heavy rainfall in FY 2011. (Breakdown: Generation facilities: Approx. JPY16.5 billion, Distribution facilities: Approx. JPY1.9 billion)

Cost of response to risk

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739,000,000

Description of response and explanation of cost cal culation We strive to improve our ability to respond to emergency situations on a daily basis through drills and skill competitions so that we can respond swiftly and accurately to damage to distribution facilities caused by typhoons and other natural disasters. At the skill competition, we have included unexpected events to enhance the ability of each competing group to respond to contingencies that are not informed in advance. Through exercises that assume practice, we are enhancing resilience in the event of a major typhoon or other disaster. In addition, we are taking measures to reduce the adverse impact on our business performance and financial position by utilizing non-life insurance. Risk management expenses of JPY739 million indicate non-life insurance premiums for FY2018 (breakdown: approximately JPY692 million related to power generation facilities, approximately JPY35 million related to distribution facilities, and approximately JPY8 million related to general and administrative expenses).

Comment

Identifier Risk3

Where in the value chain does the risk driver occur ? Upstream

Risk type / Primary climate-related risk driver Market Increased cost of raw materials

Primary potential financial impact Increased direct costs

Company- specific description Due to the impact of climate change, there is a risk that fuel costs will fluctuate if the tax on fossil fuels to combat global warming is increased more than anticipated. We are also aware that the environment surrounding fuel procurement is undergoing major change, as there are moves worldwide to divest from fossil fuels, particularly in coal-related businesses. The percentage of thermal power plants generated by fossil fuels (such as coal, oil and gas) in our own power generation is high at 87%, and our results of operations and financial condition may be affected by changes in CIF prices and exchange rates for coal, LNG, heavy and crude oil.



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Explanation of financial impact figure With regard to fluctuations in the price of fuel, the Japanese "fuel cost adjustment system" allows us to reduce the risk of fluctuations. The fuel cost adjustment system calculates the fuel cost adjustment unit price two months later, based on the 3-month average fuel price and reflects it to the monthly electricity charge. Due to fluctuations in fuel prices, there is a time lag in the reflection of fuel costs (expenses) and fuel cost adjustment (electricity charge income), which causes a temporary profit increase / decrease. JPY18 billion represents the cost effect of the time lag of the fuel cost adjustment system in FY2018.

Cost of response to risk 1,259,000,000

Description of response and explanation of cost cal culation With regard to fluctuations in thermal power generation fuel costs in sites such as Haramachi Thermal Power Station (coal) and Shin-Sendai Thermal Power Station (LNG), we strive to diversify the risk of fuel price fluctuations by aiming for a balanced power structure. The CIF price of fuels such as coal, LNG, and heavy crude oil and exchange rate are reflected to the electricity charge. We are also working to reduce negative financial impact risk by effectively utilizing financial transactions such as fuel price swaps to reduce the risk of fuel price fluctuations. The risk management cost of JPY1,259 billion is the net receivables and liabilities arising from derivative transactions used to hedge the risk of price fluctuations in net value. Furthermore, we are mitigating the financial impact risk of changes in fuel costs by promoting initiatives to improve thermal efficiency and efficient operation, including the stable operation of thermal power plants. For example, we are advancing system development utilizing artificial intelligence (AI) technology and efforts to further improve the operational efficiency of thermal power plants utilizing IoT and big data analysis. We are progressively promoting full-scale application to all thermal power plants.

Comment

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C2.4

(C2.4) Have you identified any climate-related oppo rtunities with the potential to have a substantive financial or strategic impact on your business?

Yes

C2.4a

(C2.4a) Provide details of opportunities identified with the potential to have a substantive financial or strategic impact on your b usiness.

Identifier Opp1

Where in the value chain does the opportunity occur ? Direct operations

Opportunity type Markets

Primary climate-related opportunity driver Access to new markets

Primary potential financial impact Increased revenues through access to new and emerging markets

Company-specific description We have been working to make effective use of renewable energy, starting with our 209 hydroelectric power plants (the largest ownership in the country). Furthermore, in the Group's Medium-to Long-Term Vision, we are aiming to develop 2 million kW of renewable energy and are working to expand the development of renewable energy centered on wind power. In the future, the non-fossil fuel value trading market is expected to expand along with other transitioning systems in progress, and it is expected that the non-fossil fuel value that has traditionally been unrecognized will materialize. If demand for non-fossil fuel value increases, new markets, such as the non-fossil fuel value trading market, will expand further. We can expect to increase sales as a non-fossil fuel energy certificates by entering this market which will expand business opportunities for us as a company with a large amount of renewable energy reserves.

Time horizon Long-term



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Explanation of financial impact figure JPY10.7 billion is calculated by multiplying 8,241 GWh of renewable electricity generated by our hydroelectric, wind, solar, and geothermal power plants in FY2018 by 1.3 JPY/kWh (the lowest price for feed-in-tariffs for non-fossil fuel energy certificates).

Cost to realize opportunity 13,585,000,000

Strategy to realize opportunity and explanation of cost calculation We are moving forward with efforts to expand business opportunities for us. As a company with a large amount of renewable energy reserves, we are looking into entering new markets such as the non-fossil fuel value trading market and contributing to increased sales of non-fossil fuel value. For example, we own the largest number of hydroelectric power plants in Japan at 209 locations, as well as geothermal power plants, which account for about half (46%) of those in Japan. To date, we have worked to make effective use of renewable energy abundantly existing in the six Tohoku prefectures and Niigata prefecture. The Group's Medium-to Long-Term Vision also states that "We position renewable energy as a part of our future power portfolio. As a responsible business entity for renewable energy in the six Tohoku prefectures and Niigata prefecture, we will focus on wind power generation as well as hydroelectric, solar, geothermal, and biomass power. We will leverage the know-how we have accumulated over the years to work on new developments and business participation and focus our management resources with an aim to developing 2 million kW centered in the six Tohoku prefectures and Niigata prefecture. In the Tohoku and Niigata regions, where we are primarily engaged, we have an abundance of renewable energy, including wind power. We aim to increase the percentage of renewable energy in electricity sales from 14% (FY2019) to 20%. In March 2018, we participated in the Rantau-Dedap Geothermal Power Generation Project in the Republic of Indonesia as our first overseas geothermal power generation project. We will actively contribute to the stable operation of power stations by leveraging our knowledge and experience in geothermal power generation technologies accumulated domestically. The cost to realize opportunity of JPY13.585 billion is the increase in the book value of hydroelectric power facilities and new energy power generation facilities in FY2018.

Comment

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Identifier Opp2


Opportunity type Energy source

Primary climate-related opportunity driver Use of new technologies

Primary potential financial impact Reduced direct costs

Company-specific description It is conceivable that the improvement of thermal power plant efficiency will be further promoted by the progress of climate change countermeasures and the growing need for low-carbon power sources. The share of power generated by thermal power stations using fossil fuels (such as coal, oil, gas) in our own power generation is as high as 87%. Improvement of thermal efficiency in thermal power generation is crucial in promoting both high economic efficiency and reduction of environmental burden, as it contributes not only to the reduction of fossil fuel consumption and the efficient use of energy resources, but also to the reduction of CO2 emissions. By actively introducing thermal power generation technologies with high thermal efficiency, it will be an opportunity to overcome competition and provide low-cost, stable power that supports regional restoration and development.

Time horizon Medium-term







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Explanation of financial impact figure The financial impact amount of JPY7.9 billion represents the reduction in fossil fuel costs in FY2019 associated with the commencement of operations at Noshiro Thermal Power Plant’s Unit No. 3. Noshiro Thermal Power Plant’s Unit No. 3 can reduce fuel costs by about 3% compared to existing units No. 1 and 2.


Strategy to realize opportunity and explanation of cost calculation Noshiro Thermal Power Plant’s Unit No. 3, which began commercial operation in FY2019, achieved the world's highest level of thermal efficiency of approximately 46% (lower heating value standard) as a power generation facility that uses coal by adopting the ultra-super critical pressure method and improving steam temperature. Furthermore, in the Group's Medium-to Long-Term Vision, which aims to create a corporate group that contributes to the realization of a new smart society originating in Tohoku and grows together with the sustainable development of society, the Group aims to "steadily promote the development of Joetsu Thermal Power Plant’s Unit No. 1, which aims to achieve the world's highest thermal efficiency, and to further strengthen the competitiveness of power sources and respond to changes in supply and demand associated with the expansion of the introduction of renewable energy sources by considering and implementing the shutdown of aging thermal power plants, which are not environmentally friendly or economically efficient." At the Joetsu Thermal Power Station, which is scheduled to be completed in FY2023, we will introduce next-generation gas turbines adopting the Forced-air Cooling Combustor System, which is highly economical and environmentally friendly, with the aim of achieving a thermal efficiency of at least 63%, the world's highest level as a gas combined cycle power generation facility. The cost to realize opportunity of JPY24.349 billion is the increase in the book value of the steam power generation facilities in FY2018. This figure also includes the increase in the book value of high-efficiency thermal power generation facilities.

Comment

Identifier Opp3


Opportunity type Products and services

Primary climate-related opportunity driver Development and/or expansion of low emission goods and services

Primary potential financial impact

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Increased revenues through access to new and emerging markets

Company-specific description In the Group's Medium-to Long-Term Vision, which envisions our aspirations for the 2030s, we define "smart society" as comfortable, safe, and reliable society in which we can resolve social issues that are emerging in various fields, such as transportation, education, and welfare, due to population decline and the aging of society with a declining birthrate, through the utilization of next-generation digital technologies and innovation. We are pursuing a number of new businesses to realize a "smart society." In particular, we are actively working toward the early commercialization of 2 businesses: effective use of regional energy resources through virtual power plants (VPPs) and installation services such as for distributed energy and storage batteries. With regard to our VPP business, we are aiming to make maximum use of energy resources such as solar power generation facilities, storage batteries, and EVs that exist in the region to strengthen local disaster prevention capabilities and quickly commercialize VPP services that help customers conserve energy and save costs. With regard to installation services such as for distributed energy and storage batteries, through cooperation and collaboration with solar panel manufacturers and storage battery manufacturers, we are aiming to quickly commercialize services based on a "third-party owned model," in which we bear the initial investment and provide solar power generation facilities and storage batteries to local customers. These businesses provide an opportunity for us to develop low-emission products and services and increase our sales.

Time horizon Long-term



Are you able to provide a potential financial impac t figure? Yes, an estimated range

Potential financial impact figure (currency)

Potential financial impact figure - minimum (curren cy) 4,000,000,000

Potential financial impact figure - maximum (curren cy) 33,000,000,000

Explanation of financial impact figure The figure is based on a trial calculation of the total sales in FY2030 (a single fiscal year) for the two businesses (the VPP business and the installation services business such as for distributed energy and storage batteries described above) under the

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assumption that the growing demand for low-carbon energy will result in a certain degree of growth and dissemination of solar power generation facilities, storage batteries, EVs, etc. and our services will be available to a certain extent in some of these areas. The figure is an estimated range due to uncertainty of market trends.


Strategy to realize opportunity and explanation of cost calculation With regard to our VPP business, we are aiming to make maximum use of energy resources such as solar power generation facilities, storage batteries, and EVs that exist in the region to strengthen local disaster prevention capabilities and quickly commercialize VPP services that help customers conserve energy and save costs. Concrete examples include verification of the effectiveness of consolidating and controlling solar power generation facilities and storage batteries at 25 designated evacuation sites as energy resources for VPPs in cooperation with local governments and verification of the technology (V2G: Vehicle to Grid) for charging and discharging batteries of electric vehicles by connecting them to the electric power system. With regard to installation services such as for distributed energy and storage batteries, through cooperation and collaboration with solar panel manufacturers and storage battery manufacturers, we are aiming to quickly commercialize services based on a "third-party owned model," in which we bear the initial investment and provide solar power generation facilities and storage batteries to local customers. In order to realize a smart society, we will develop marketing methods that meet customer needs, such as awareness of improving resilience and heightened environmental awareness due to the frequent occurrence of disasters in recent years, and develop technologies that can control various resources through business other than those mentioned above. We will realize early commercialization and then grow our business over the medium to long term. Assuming the effects of these efforts, we estimate sales and expenses as of FY2030 to be approximately JPY3 billion to JPY26 billion, of which the cost of realized opportunity of JPY14.5 billion is the mid-point.

Comment

C3. Business strategy

C3.1

(C3.1) Have climate-related risks and opportunities influenced your organization’s strategy and/or financial planning?

Yes, and we have developed a low-carbon transition plan

C3.1a

(C3.1a) Does your organization use climate-related scenario analysis to inform its strategy?

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Yes, qualitative

C3.1b

(C3.1b) Provide details of your organization’s use of climate-related scenario analysis.

Climate-related scenarios and models applied

Details

RCP 8.5

IEA Sustainable development scenario

＜RCP8.5, IEA Sustainable development scenario etc.＞

We announced our support for TCFD in April 2019. While using climate scenarios such as the IEA Sustainable Development Scenario as a transition risk scenario and the 2°C or 4°C scenario such as in the RCP8.5 as a physical risk scenario in accordance with the scenario analysis methods presented in TCFD's recommendations we are currently identifying risks and opportunities related to climate change and analyzing their impact on the power supply business, which is the core business, and on the smart-society building business, which is the growing business, over the medium-to long-term time horizon of 2050 and beyond.

In the 2°C scenario, which entails a large transition risk, we assumed that measures would be taken to realize a carbon-free society and that thermal power sources would shrink due to policies, markets, and other factors, while low-carbonization of electricity and electrification would greatly advance.

In this scenario, rises in the cost of CO2 emissions due to policies, markets, and other factors could reduce the competitiveness of conventional power sources and adversely affect us financially.

In terms of measures and opportunities to respond to this, the Group intends to mitigate the adverse financial impact and generate profits by taking on the challenges of “low-carbonization of electricity”; supplying electricity with superior economical efficiency and environmental performance in virtue of improving the efficiency of thermal power and expanding the development of renewable energy, and by promoting electrification, including for mobility, through switching to a variety of service provider businesses and promoting digital innovation.

On the other hand, in the 4°C scenario, where physical risks are high, the impact of climate change is conspicuous, and we assumed that the importance of electricity supply resilience would increase because of the anticipated impact on our facilities damage and supply interruption as urgent risks due to frequent and severe weather disasters, and on hydroelectric power generation due to changes in precipitation and snowfall patterns as chronic risks.

Under this scenario, climate change could adversely affect our finances by causing damage to our facilities and expanding impacts on electricity supply. However, we believe that adverse financial impacts can be mitigated and profit generated through actions such as making facilities more resilient, improving recovery responsiveness, and considering business opportunities utilizing distributed energy.

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Scenario analysis results in line with TCFD recommendations will be disclosed for the first time in the Integrated Report 2020, but we will continue to improve it in stages in the future.

In February 2020, we formulated “Tohoku Electric Power Groups Medium-to Long-Term Vision” which the Group aspires to by the 2030s, focusing on the power supply business, the smart-society building business, and our corporate value creation. We recognize that the Group is entering a major turning point in society and the electricity supply and demand structure based on an evaluation of the current situation and future prospects of the six prefectures of Tohoku and Niigata Prefecture, where we base our business, as well as the state of competition in the energy industry.

Specifically, as one of our focus points, considering renewable energy as a power source that will play a part in our future power source portfolio, we aim to become a responsible business entity dealing with renewable energy in the six prefectures of Tohoku and Niigata Prefecture. Having wind power generation at the core and covering hydroelectric, solar, geothermal, and biomass power generation, we will utilize the know-how our group has acquired and work on new development and business projects. Aiming for 2,000 MW mainly in the six prefectures of Tohoku and Niigata Prefecture, we will preferentially devote our management resources to the effort. Also we will become involved in the entire life cycle of renewable energy and will also consider conducting operation and maintenance (O&M) and power source replacement business.

Furthermore, another focus point is the advancement and evolution of a management foundation which emphasizes ESG. Under the Group's Environmental Policy, we promote environmental management and efforts to mitigate / adapt to climate change and enhance the disclosure of environmental information.

We believe that the Group's Medium-to Long-Term Vision is effective as a climate change response strategy even based on the results of the above-mentioned 2°C Scenario and 4°C Scenario Analysis. The results of the scenario analysis have been helpful in confirming the direction of our business strategy.

Nationally determined contributions (NDCs)

＜NDC＞

We conduct our business in compliance with the Act on Rationalizing Energy Use, which was formulated by Japan based on the NDC and stipulates standards for new thermal power plants, etc. and benchmarks for the efficiency of thermal power generation, as well as the Act on Sophisticated Methods of Energy Supply Structures, which requires retailers to achieve the annual target of 44% for the ratio of non-fossil fuel power sources in 2030 and the annual interim targets up to that point.

For 2030, we are analyzing and making assumptions according to these regulations based on the NDC, such as examining the power mix consistent with the energy mix assuming S+3E in the power generation sector in Japan. This has an impact on our medium-to long-term strategic decisions.

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C3.1d

(C3.1d) Describe where and how climate-related risk s and opportunities have influenced your strategy.

Have climate-related risks and opportunities influenced your strategy in this area?

Description of influence

Products and services

Yes It affected the fields of various services provided to customers and strategies for realizing them in the Tohoku Electric Power Group's Medium-to Long-Term Vision which is our aspiration for the 2030s.

Specifically, with the Group's Medium-Term Plan, which outlines measures for the 5-year period from FY2020 to FY2024 aimed at realizing this vision, we focus on positioning renewable energy as a power source that will play a part in our future power source portfolio in Highlight 1, and formulating a strategy to develop services that help customers save energy and costs by utilizing renewable energy in Highlight 2.

The following example illustrates the effort we have implemented in anticipation of these strategies.

[Tokyu Setagaya Line (light railway)]

In March 2019, together with Tokyu Corporation and Tokyu Power Supply Co., Ltd., we realized the operation of the Setagaya Line with 100% renewable energy generated solely from hydro and geothermal power.

This initiative was the first in Japan to run all trains of an urban railway track through the use of 100% renewable energy. The Setagaya Line, which previously emitted 1,263 tons of CO2, equivalent to about 0.5 units of the Tokyo Dome in one year, has been operated as "Japan's first urban commuter train with zero CO2 emissions."

Through this initiative, which serves as an advanced example of the use of renewable energy in Japan, the 3 companies will continue to promote sustainable urban development and work toward further enhancing the value of areas along the rail line.

Supply chain and/or value chain

Yes It affected the collaboration in the supply chain, especially the strategy for the efficient upgrading of the transmission and distribution network outlined in the Tohoku Electric

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Power Group's Medium-to Long-Term Vision which is our aspiration for the 2030s.

The following is an example of a major strategic decisions aimed at this.

[Low-loss wire with fins with Kitanihon Electric Cable]

We have jointly developed a low-loss wire with fins with Kitanihon Electric Cable Co., Ltd., a wire supplier, to reduce the environmental impact of electricity transportation, including the reduction of CO2 emissions, and to build electric power infrastructures that can withstand the severe climates caused by snowfall in the six prefectures of Tohoku and Niigata prefecture. We are expanding the introduction of these low-loss wires.

"Low-loss wire with fins" can reduce electrical resistance by 20% or more and contribute to CO2 emission control by reducing power loss during power transmission.

In addition, "low-loss wire with fins" are shaped to inhibit snow adhesion and prevent equipment damage caused by snow accretion during winter, thereby contributing to a stable supply of electric power.

Expanded deployment is also expected to have the effect of increasing resilience to large-scale disasters.

"Low-loss wire with fins" is measured by the installation volume (thousand km), and the status of introduction is monitored on an ongoing basis.

Investment in R&D

Evaluation in progress The Company has formulated strategies based on changes in the business environment, such as the conversion of renewable energy into a mainstay power source and the expansion of distributed energy, and is actively investing in research and development in order to realize the Tohoku Electric Power Group's Medium-to Long-Term Vision which is our aspiration for the 2030s.

As renewable energy is becoming increasingly popular, it is important to work on upgrading power networks to adapt to changes in supply and demand.

The following is an example of a major strategic decision aimed at this.

[Solar Demand Forecast, R&D Report]

Recognizing the risks and opportunities of climate change, the Company actively invests in research and development related to climate change. For example, with growing interest in renewable energy, solar power generation (PV)

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interconnections are expanding. However, since PV is characterized by instantaneous and large fluctuations in output depending on the weather, there are concerns that if a large volume of PV is introduced into the power system, it may affect aspects of power quality and supply and demand operations.

For this reason, we have studied methods for estimating and predicting the accuracy of solar radiation, which has a significant impact on PV output, and methods for estimating and predicting PV output, and developed a system for estimating the solar power output of the entire Tohoku region.

The results of numerous other studies are available on our website. Reference: https://www.tohoku-epco.co.jp/rdcenter/

Operations Yes This affected our strategic for upgrading our power network to realize a smart society in the Tohoku Electric Power Group's Medium-to Long-Term Vision which is our aspiration for the 2030s. The use of transmission and distribution facilities and smart meter data allows us to upgrade the operational aspects of our power network.

As an example of our main strategic decisions aimed at this, we made the decision to install smart meters for all customers in our service area by the end of FY2023.

With the introduction of renewable energy and the proliferation of distributed energy, we will consider ways to efficiently build facilities and grid operation adapted to changes in supply and demand, as well as work to upgrade our power networks to realize a smart society. In addition, we will consider and develop new businesses by utilizing transmission and distribution facilities and smart meter data.

C3.1e

(C3.1e) Describe where and how climate-related risk s and opportunities have influenced your financial planning.

Financial planning elements that have been influenced

Description of influence

Row 1

Access to capital To realize our medium-to long-term financial strategy, the Company first issued the Tohoku Electric Power Green Bond, from the viewpoint of expanding the renewable energy business and securing diverse funding. The use of proceeds of this green bond is limited to businesses that improve the environment in Japan and overseas, such as the

27

development of renewable energy. The green bond had an issue amount of JPY5 billion and will mature in 10 years.

We aim to develop 2 million kW of renewable energy, mainly from wind power generation, in the six Tohoku prefectures and Niigata prefecture. Funds procured through the Tohoku Electric Power Green Bond will be used primarily for this project. In addition, the status of the use of proceeds and the effects of environmental improvements (such as annual CO2 reductions associated with the introduction of renewable energy) will be published in the Group's annual Integrated Report.

The issuance of the Tohoku Electric Power Green Bond has been evaluated and verified by DNV GL Business Assurance Japan K.K. (DNV GL), a third-party evaluation organization, for compliance with various standards related to the issuance of green bonds. In addition, we were the first ex-general electric utility to acquire certification from the CBI (Climate Bonds Initiative, an international NGO that sets strict standards for ensuring the reliability and transparency of green bonds).

In recent years, there has been a growing trend among shareholders and institutional investors, particularly in terms of medium-to long-term corporate growth potential and sustainability, toward companies seeking non-financial ESG management that emphasizes corporate ethics and legal compliance, environmental conservation considerations, and contributes to the development of local communities, in addition to their financial status. In light of these circumstances, we are strengthening our ESG management initiatives. We will continue to actively engage in the renewable energy business and further promote ESG management.

C3.1f

(C3.1f) Provide any additional information on how c limate-related risks and opportunities have influenced your strategy and fin ancial planning (optional).

C4. Targets and performance Targets and performance

C4.1

(C4.1) Did you have an emissions target that was ac tive in the reporting year? Intensity target

C4.1b

(C4.1b) Provide details of your emissions intensity target(s) and progress made against those target(s).

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Target reference number Int 1

Year target was set 2015

Target coverage Company-wide

Scope(s) (or Scope 3 category) Scope 1

Intensity metric Metric tons CO2e per megawatt hour (MWh)

Base year 2013

Intensity figure in base year (metric tons CO 2e per unit of activity) 0.589

% of total base year emissions in selected Scope(s) (or Scope 3 category) covered by this intensity figure

100

Target year 2030

Targeted reduction from base year (%) 37.18

Intensity figure in target year (metric tons CO 2e per unit of activity) [auto-calculated]

0.3700098

% change anticipated in absolute Scope 1+2 emission s -37.18

% change anticipated in absolute Scope 3 emissions 0

Intensity figure in reporting year (metric tons CO 2e per unit of activity) 0.528

% of target achieved [auto-calculated] 27.8551277637

Target status in reporting year Underway

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Is this a science-based target? No, and we do not anticipate setting one in the next 2 years

Please explain (including target coverage) This target is aimed at achieving around 0.37 kg-CO2/kWh for the entire Electric Power Council for a Low Carbon Society, of which we are a member. By promoting a PDCA cycle based on the action plan as an individual company, we intend to increase the effectiveness of efforts toward achieving the target for all businesses. The figure of around 0.37 kg-CO2/kWh is consistent with the national emission factor calculated from the energy mix described by the Japanese government's Long-Term Energy Supply and Demand Outlook. Although the scope of this target also includes CO2 emissions from power received from other companies (electricity purchased from other companies for sale to our customers), we have selected Scope 1 as the target coverage because the majority is CO2 emissions from in-house power generation.

C4.2

(C4.2) Did you have any other climate-related targe ts that were active in the reporting year?

Target(s) to increase low-carbon energy consumption or production

C4.2a

(C4.2a) Provide details of your target(s) to increa se low-carbon energy consumption or production.

Target reference number Low 1

Year target was set 2015

Target coverage Company-wide

Target type: absolute or intensity Absolute

Target type: energy carrier Electricity

Target type: activity Production

Target type: energy source Low-carbon energy source(s)

Metric (target numerator if reporting an intensity target)

30

Percentage

Target denominator (intensity targets only)

Base year 2015

Figure or percentage in base year 19

Target year 2030

Figure or percentage in target year 44

Figure or percentage in reporting year 22

% of target achieved [auto-calculated] 12

Target status in reporting year Underway

Is this target part of an emissions target? No, this target is not part of the emission target because it is a non-fossil fuel power supply ratio target. However, we believe that an increase in the ratio of non-fossil fuel power sources will directly contribute to the reduction of our emissions.

Is this target part of an overarching initiative? No, it's not part of an overarching initiative

Please explain (including target coverage) As part of our efforts to reduce CO2 emissions in order to realize a low-carbon society, the entire Group will work together to achieve the 44% or more ratio of non-fossil fuel power sources by FY2030 stipulated in the Act on Sophisticated Methods of Energy Supply Structures. While aiming to expand the use of non-fossil fuel energy in supply, such as the utilization of nuclear power, with safety assurance as a major premise, and the utilization of renewable energy, we will continue to promote initiatives in both demand and supply, based on the pursuit of an optimal power source structure from the viewpoint of "S+3E."

C4.3

(C4.3) Did you have emissions reduction initiatives that were active within the reporting year? Note that this can include those in the planning and/or implementation phases.

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Yes

C4.3a

(C4.3a) Identify the total number of initiatives at each stage of development, and for those in the implementation stages, the estimated C O2e savings.

Number of initiatives

Total estimated annual CO 2e savings in metric tons CO2e (only for rows marked *)

Under investigation 0 0

To be implemented* 2 0

Implementation commenced*

1 0

Implemented* 2 11,000

Not to be implemented 0 0

C4.3b

(C4.3b) Provide details on the initiatives implemen ted in the reporting year in the table below.

Categories of Initiatives and Types of Initiatives Energy efficiency in production processes Machine/equipment replacement

Estimated annual CO 2e savings (metric tons CO 2e) 11,000

Scope(s) Scope 1

Voluntary/ Mandatory Voluntary

Annual monetary savings (unit currency – as specifi ed in C0.4) 170,896,000

Investment required (unit currency – as specified i n C0.4) 24,349,000,000

Payback period 11-15 years

Estimated lifetime of the initiative 11-15 years

Comment

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We are replacing power generation facilities in order to curb CO2 emissions and reduce power generation costs. For example, in FY2018, we replaced the 3-1ST low-pressure turbine at Higashi-Niigata Thermal Power Plant’s Unit No. 3, and we were able to confirm improvement in thermal efficiency. In addition, Sendai Thermal Power Plant’s Unit No.4 also introduced high-performance cooling blades, and improvement in thermal efficiency was confirmed. Since the amount of investment includes managerially sensitive information, we responded to the increase in book cost of steam power generation facilities in FY2018 of JPY24.349 billion (including the amount of investment related to the improvement of thermal efficiency of Higashi Niigata Thermal Power Plant’s Unit No. 3 and Sendai Thermal Power Plant’s Unit No. 4). For the investment recovery period, we responded with the service life of depreciable assets under the tax law (15 years for steam power generation facilities).

C4.3c

(C4.3c) What methods do you use to drive investment in emissions reduction activities?

Method Comment

Compliance with regulatory requirements/standards

Make investment decisions in light of regulations imposed on the power industry or those expected to be introduced.

C4.5

(C4.5) Do you classify any of your existing goods a nd/or services as low-carbon products or do they enable a third party to avoid G HG emissions?

Yes

C4.5a

(C4.5a) Provide details of your products and/or ser vices that you classify as low-carbon products or that enable a third party to avo id GHG emissions.

Level of aggregation Group of products

Description of product/ Group of products Supply of 100% renewable energy

Are these low-carbon product(s) or do they enable a voided emissions? Low-carbon product

Taxonomy, project, or methodology used to classify product(s) as low-carbon or to calculate avoided emissions

Other, please specify, Act on Promotion of Global Warming Countermeasures

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% revenue from low-carbon product(s) in the reporti ng year 0

Comment Since March 25, 2019, in cooperation with Tokyu Power Supply Co., Ltd., we have been supplying 100% of renewable energy generated solely from hydro and geothermal power to the Setagaya Line (light railway) operated by Tokyu Corporation. This initiative was Japan's first operation of an urban railway line using 100% of renewable energy on all trains throughout the year.

C-EU4.6

(C-EU4.6) Describe your organization’s efforts to r educe methane emissions from your activities.

Our thermal power stations do not have production facilities for fuels that generate methane. With regard to LNG in storage, natural inflation generates BOG (Boil-Off Gas), which is the principal component of methane, but we use all BOG at power generation facilities to make the system redundant. In addition, in order to accommodate the high methane concentration of shale gas and other gases in our high-efficiency power generation facilities, we modified the gas turbine combustor of Higashi Niigata Unit No.4-2 system in FY2019. Besides, at Higashi Niigata Unit No.4-1 system, a high methane concentration gas will be available by converting the gas turbines of Akita Thermal Power Plant’s Unit No. 5 and Higashi Niigata Thermal Power Plant’s Unit No. 5, both of which were emergency installations discontinued in March 2019 during FY2020. These efforts will contribute to reducing CO2 by using methane in more efficient power generation facilities. Furthermore, our activities may contribute to reduction of methane emission at the coal mining stage and oil / gas production stage by promoting reduction of fuel consumption through high efficiency of thermal power generation including at Shin-Sendai Thermal Power Plant’s Unit No. 3 which boasts the world's highest thermal efficiency (with a thermal efficiency of 60% or more).

C5. Emissions methodology

C5.1

(C5.1) Provide your base year and base year emissio ns (Scopes 1 and 2).

Scope 1

Base year start April 1 2013

Base year end March 31 2014

Base year emissions (metric tons CO 2e) 36,777,400

Comment

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Scope 2 (location-based)



Base year emissions (metric tons CO 2e) 0

Comment

Scope 2 (market-based)



Base year emissions (metric tons CO 2e) 0

Comment As the company (including headquarters) uses electricity generated by the company itself, Scope 2 emissions are 0t.

C5.2

(C5.2) Select the name of the standard, protocol, o r methodology you have used to collect activity data and calculate emissions.

Act on the Rational Use of Energy Japan Ministry of the Environment, Law Concerning the Promotion of the Measures to Cope with Global Warming, Superseded by Revision of the Act on Promotion of Global Warming Countermeasures (2005 Amendment)

C6. Emissions data

C6.1

(C6.1) What were your organization’s gross global S cope 1 emissions in metric tons CO2e?

Reporting year

Gross global Scope 1 emissions (metric tons CO 2e)

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31,964,500

Comment

C6.2

(C6.2) Describe your organization's approach to rep orting Scope 2 emissions.

Row 1

Scope 2, location-based We are reporting a Scope 2, location-based figure

Scope 2, market-based We are reporting a Scope 2, market-based figure

Comment

C6.3

(C6.3) What were your organization's gross global S cope 2 emissions in metric tons CO2e?

Reporting year

Scope 2, location-based 0

Scope 2, market-based (if applicable) 0

Comment As the company (including headquarters) uses electricity generated by the company, Scope 2 emissions are 0t.

C6.4

(C6.4) Are there any sources (e.g. facilities, spec ific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are wit hin your selected reporting boundary which are not included in your disclosure?

No

C6.5

(C6.5) Account for your organization’s gross global Scope 3 emissions, disclosing and explaining any exclusions.

Purchased goods and services

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Evaluation status Not relevant, explanation provided

Please explain Because they are subject to activities that are significantly unrelated to our major power generation businesses and have extremely low volumes.

Capital goods

Evaluation status Relevant, calculated

Metric tons CO 2e 784,232

Emissions calculation methodology Increase in book value of electric utility plant and equipment JPY237.646 billion × emission factor of capital goods (3.30 t/million JPY)

※ Securities Report P.125

※ Source of Emission Factors: "Emission Intensity per unit of Capital Goods" from P.17

of the "Emission Intensity Unit Database for Calculating an Organization's Greenhouse Gas Emissions etc. through the Supply Chain" (Ver. 2.6) published by the Japanese Ministry of the Environment in March 2019. https://www.env.go.jp/earth/ondanka/supply_chain/gvc/files/tools/DB_V2-6.xlsx

Percentage of emissions calculated using data obtai ned from suppliers or value chain partners

100

Please explain

Fuel-and-energy-related activities (not included in Scope 1 or 2)


Metric tons CO 2e 9,072,000

Emissions calculation methodology Electricity received by other companies: 18,144 GWh x Substitute value: 500 t-CO2/GWh = 9,072,000t

※ Source of the substitute value: Emission factor by electric utility (for calculation of

greenhouse gas emissions of specified emitters) -FY2018 results Substitute value https://ghg-santeikohyo.env.go.jp/files/calc/h31_coefficient_rev.pdf


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100

Please explain

Upstream transportation and distribution


Metric tons CO 2e 21,438

Emissions calculation methodology CO2 emissions from domestic cargo transports submitted to the government every year under the Act on the Rational Use of Energy. Calculated by aggregating the calorific values consumed by each type of vehicle and vessel, and multiplying them by the emission factor for each type of fuel reported in the "Ordinance Concerning the Calculation of Greenhouse Gas Emissions Associated with Business Activities of Specified Emitters" by the Japanese Ministry of Economy, Trade and Industry and Ministry of the Environment (Ordinance No. 3, 2006). For vessels for which fuels are indistinguishable, the coefficients of internal vessels specified in the "Guideline for Calculation of CO2 Emissions in the Distribution Business" by the Japanese Ministry of Economy, Trade and Industry and Ministry of Land, Infrastructure, Transport and Tourism are used.


100

Please explain

Waste generated in operations



Business travel



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Employee commuting



Upstream leased assets



Downstream transportation and distribution



Processing of sold products


Please explain Because our sold products cannot be processed.

Use of sold products


Please explain Because it is aggregated into Scope 1 and has not been calculated separately.

End of life treatment of sold products


Please explain As termination of production of sold products cannot be conducted.

Downstream leased assets

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Franchises


Please explain Because there is no franchise.

Investments



Other (upstream)

Evaluation status

Please explain

Other (downstream)

Evaluation status

Please explain

C6.7

(C6.7) Are carbon dioxide emissions from biogenic c arbon relevant to your organization?

No

C6.10

(C6.10) Describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tons CO 2e per unit currency total revenue and provide any additional intensity metrics that are appropriate t o your business operations.

40

Intensity figure 0.0000142424

Metric numerator (Gross global combined Scope 1 and 2 emissions, metric tons CO 2e)

31,964,500

Metric denominator unit total revenue

Metric denominator: Unit total 2,244,314,000,000

Scope 2 figure used Market-based

% change from previous year 18.75

Direction of change Decreased

Reason for change The full liberalization of the electricity retail market had the impact of reducing electricity sales (retail) and increasing sales of electricity (wholesale) outside the area and that of wholesale power exchanges. However, in FY2018, the company replaced 3-1ST low-voltage turbines at Higashi Niigata Unit No. 3 system, resulting in improved thermal efficiency. The company also introduced high-performance cooling blades at Sendai Thermal Power Plant’s Unit No.4, resulting in improved thermal efficiency.

Intensity figure 0.4969450576

Metric numerator (Gross global combined Scope 1 and 2 emissions, metric tons CO 2e)

31,964,500

Metric denominator megawatt hour generated (MWh)

Metric denominator: Unit total 64,322,000

Scope 2 figure used Market-based

% change from previous year

41

0.25

Direction of change Decreased

Reason for change In FY2018, the 3-1ST low-pressure turbines were replaced in the Higashi-Niigata Unit No. 3 system to improve thermal efficiency. In addition, high-performance cooling blades were installed in Sendai Thermal Power Plant’s Unit No.4 to improve thermal efficiency. As a result, the overall thermal efficiency of the thermal power station was improved (from 46.2% in FY2017 to 46.7% in FY2018), resulting in an improvement in emissions per unit of power generated.

C7. Emissions breakdown

C7.1

(C7.1) Does your organization break down its Scope 1 emissions by greenhouse gas type?

Yes

C7.1a

(C7.1a) Break down your total gross global Scope 1 emissions by greenhouse gas type and provide the source of each used global war ming potential (GWP).

Greenhouse gas Scope 1 emissions (metric tons in CO 2e)

GWP Reference

CO2 31,900,000 IPCC Fourth Assessment Report (AR4 - 100 year)

N2O 42,000 IPCC Fourth Assessment Report (AR4 - 100 year)

SF6 22,500 IPCC Fourth Assessment Report (AR4 - 100 year)

C-EU7.1b

(C-EU7.1b) Break down your total gross global Scope 1 emissions from electric utilities value chain activities by greenhouse gas type.

Gross Scope 1 carbon dioxide emissions (metric tons CO2)

Gross Scope 1 methane emissions (metric tons CH4)

Gross Scope 1 SF6 emissions (metric tons SF6)

Total gross Scope 1 GHG emissions (metric tons CO2e)

Comment

Fugitives 0 0 1 22,500

Combustion (Electric utilities)

31,900,000 0 141 31,942,000 The value listed in the

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SF6 column is N2O emissions

Combustion (Gas utilities)

0 0 0 0

Combustion (Other)

0 0 0 0

Emissions not elsewhere classified

0 0 0 0

C7.2

(C7.2) Break down your total gross global Scope 1 e missions by country/region.

Country/Region Scope 1 emissions (metric tons CO 2e)

Japan 31,964,500

C7.3

(C7.3) Indicate which gross global Scope 1 emission s breakdowns you are able to provide.

By activity

C7.3c

(C7.3c) Break down your total gross global Scope 1 emissions by business activity.

Activity Scope 1 emissions (metric tons CO 2e)

Electricity generation 31,964,500

C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4

(C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4) Break down your organization’s total gross global Scope 1 emissions by sector production activity in metric tons CO 2e.

Gross Scope 1 emissions, metric tons CO 2e Comment

Electric utility activities 31,964,500

C7.9

(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to those of the previous rep orting year?

Decreased

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C7.9a

(C7.9a) Identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined), and for each of them specify how y our emissions compare to the previous year.

Change in emissions (metric tons CO2e)

Direction of change

Emissions value (percentage)

Please explain calculation

Change in renewable energy consumption

0 No change 0 Renewable energy consumption remained unchanged from the previous year.

Other emissions reduction activities

11,000 Decreased 0.03 In FY2018, Sendai Unit No. 4 introduced high-performance cooling blades, and Higashi Niigata Unit No. 3-1 system improved their thermal efficiency by replacing low-pressure turbines. CO2 savings are the sum of the calculations shown below.

Total calorific value of fuels for individual units x (thermal efficiency improvement fraction/thermal efficiency prior to improvement) x CO2 emission factor

Reduction in emissions/Scope 1 emissions in the previous fiscal year = 11,000/32,767,500=0.03%

Divestment

Acquisitions

Mergers

Change in output

792,000 Decreased 2.42 (Scope 1 emissions in the previous fiscal year - Scope 1 emissions in the current fiscal year) - Emissions reductions due to "Other emissions reduction activities" =32,767,500-31,964,500-11,000

Reduction in emissions/Scope 1 emissions in the previous fiscal year =792,000/32,767,500=2.42%

Change in methodology

Change in boundary

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Change in physical operating conditions

Unidentified

Other

C7.9b

(C7.9b) Are your emissions performance calculations in C7.9 and C7.9a based on a location-based Scope 2 emissions figure or a market -based Scope 2 emissions figure?

Market-based

C8. Energy

C8.1

(C8.1) What percentage of your total operational sp end in the reporting year was on energy?

More than 20% but less than or equal to 25%

C8.2

(C8.2) Select which energy-related activities your organization has undertaken.

Indicate whether your organization undertook this energy-related activity in the reporting year

Consumption of fuel (excluding feedstocks)

Yes

Consumption of purchased or acquired electricity

No

Consumption of purchased or acquired heat

No

Consumption of purchased or acquired steam

No

Consumption of purchased or acquired cooling

No

Generation of electricity, heat, steam, or cooling

Yes

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C8.2a

(C8.2a) Report your organization’s energy consumpti on totals (excluding feedstocks) in MWh.

Heating value

MWh from renewable sources

MWh from non-renewable sources

Total (renewable + non-renewable) MWh

Consumption of fuel (excluding feedstock)

HHV (higher heating value)

0 129,901,593 129,901,593

Consumption of self-generated non-fuel renewable energy

0 0

Total energy consumption

0 129,901,593 129,901,593

C8.2b

(C8.2b) Select the applications of your organizatio n’s consumption of fuel.

Indicate whether your organization undertakes this fuel application

Consumption of fuel for the generation of electricity Yes

Consumption of fuel for the generation of heat No

Consumption of fuel for the generation of steam No

Consumption of fuel for the generation of cooling No

Consumption of fuel for co-generation or tri-generation No

C8.2c

(C8.2c) State how much fuel in MWh your organizatio n has consumed (excluding feedstocks) by fuel type.

Fuels (excluding feedstocks) Coal

Heating value HHV

Total MWh consumed by the organization 57,039,722

MWh consumed for self-generation of electricity 57,039,722

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MWh consumed for self-generation of heat 0

Emission factor 0.0906

Unit metric tons CO2e per GJ

Emission factor source "Ordinance Concerning the Calculation of Greenhouse Gas Emissions Associated with Business Activities of Specified Emitters" Appended Table 1 (Related to Article 2)

Comment

Fuels (excluding feedstocks) Crude Oil Heavy

Heating value HHV







Comment

Fuels (excluding feedstocks) Crude Oil

Heating value

47

HHV

Total MWh consumed by the organization 848,889

MWh consumed for self-generation of electricity 848,889





Comment

Fuels (excluding feedstocks) Natural Gas

Heating value HHV







Comment

48

Fuels (excluding feedstocks) Liquefied Natural Gas (LNG)

Heating value HHV







Comment

C-EU8.2d

(C-EU8.2d) For your electric utility activities, pr ovide a breakdown of your total power plant capacity, generation, and related emissions d uring the reporting year by source.

Coal – hard

Nameplate capacity (MW) 3,158

Gross electricity generation (GWh) 27,235

Net electricity generation (GWh) 26,146

Absolute Scope 1 emissions (metric tons CO 2e) 18,597,231

Scope 1 emissions intensity (metric tons CO 2e per GWh)

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682.84

Comment Coal

Lignite

Nameplate capacity (MW) 0

Gross electricity generation (GWh) 0

Net electricity generation (GWh) 0

Absolute Scope 1 emissions (metric tons CO 2e) 0

Scope 1 emissions intensity (metric tons CO 2e per GWh) 0

Comment

Oil





Scope 1 emissions intensity (metric tons CO 2e per GWh) 689.99

Comment Crude Oil Heavy, Crude Oil

Gas



50




Comment Natural Gas, Liquefied Natural Gas (LNG)

Biomass






Comment The maximum power generation capacity is converted from the heat ratio because of mixed combustion.

Waste (non-biomass)






Comment N/A

51

Nuclear






Comment N/A

Fossil-fuel plants fitted with CCS






Comment N/A

Geothermal

Nameplate capacity (MW) 188.8



Absolute Scope 1 emissions (metric tons CO 2e)

52

0


Comment

Hydropower






Comment

Wind






Comment N/A

Solar

Nameplate capacity (MW) 4.5

53





Comment

Marine






Comment

Other renewable






Comment

54

Other non-renewable






Comment

Total






Comment

C-EU8.4

(C-EU8.4) Does your electric utility organization h ave a transmission and distribution business?

Yes

55

C-EU8.4a

(C-EU8.4a) Disclose the following information about your transmission and distribution business.

Country/region Japan

Voltage level Transmission (high voltage)

Annual load (GWh) 82,686

Annual energy losses (% of annual load) 5

Scope where emissions from energy losses are accoun ted for Scope 2 (Market-based)

Emissions from energy losses (metric tons CO 2e) 0

Length of network (km) 15,330

Number of connections 58,457

Area covered (km2) 8,637

Comment We disclose Annual load and Annual energy losses as Transmission and Distribution.

Country/region Japan

Voltage level Distribution (low voltage)

Annual load (GWh) 82,686

Annual energy losses (% of annual load) 5

Scope where emissions from energy losses are accoun ted for

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Scope 2 (Market-based)

Emissions from energy losses (metric tons CO 2e) 0

Length of network (km) 147,934

Number of connections 3,126,235

Area covered (km2) 20

Comment We disclose Annual load and Annual energy losses as Transmission and Distribution.

C9. Additional metrics

C9.1

(C9.1) Provide any additional climate-related metri cs relevant to your business.

Description Other, please specify

Thermal efficiency of thermal power plant

Metric value 46.7

Metric numerator Gross thermal efficiency (Lower Heating Value (LHV) standard，％)

Metric denominator (intensity metric only)

% change from previous year 0.5

Direction of change Increased

Please explain The improvement of thermal efficiency in thermal power generation not only reduces the use of fossil fuels and contributes to the efficient use of energy resources, but also contributes to the reduction of CO2 emissions, so we are actively introducing thermal power generation technologies with higher thermal efficiency.

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Higashi Niigata Unit No. 3 system, which began commercial operation in 1985, was the first large-capacity combined-cycle power plant in Japan to achieve a thermal efficiency of approximately 48%, the highest level at that time. Since then, we have achieved even higher thermal efficiency at Higashi Niigata Unit No.4 system and Sendai Thermal Power Plant’s Unit No.4, and at the Shin-Sendai Unit No.3 system (which began commercial operation on a full scale in July 2016) we have achieved a thermal efficiency of 60% or higher, the highest level in the world at that time. In addition, we are steadily proceeding with the construction of Joetsu Thermal Power Plant’s Unit No.1 which has a combined cycle power generation facility with the world's highest thermal efficiency of 63% or higher. We will strive to ensure a stable supply as well as to achieve high economic efficiency and reduce environmental impact.

C-EU9.5a

(C-EU9.5a) Break down, by source, your total planne d CAPEX in your current CAPEX plan for power generation.

Primary power generation source

CAPEX planned for power generation from this source

Percentage of total CAPEX planned for power generation

End year of CAPEX plan

Comment

Wind 15,000,000,000 5.11 2020 We aim to develop 2 million kW of renewable energy in general, centered on wind power generation, in the Tohoku and Niigata region by utilizing the know-how we and our corporate group have cultivated to date to engage in new development and business participation. The planned CAPEX is the notional amount invested per year. Total facility construction costs for FY2018 are used for the total planned CAPEX.

C-EU9.5b

(C-EU9.5b) Break down your total planned CAPEX in y our current CAPEX plan for products and services (e.g. smart grids, digitaliza tion, etc.).

Products and services

Description of product/service CAPEX planned for product/service

Percentage of total CAPEX planned for products and services

End year of CAPEX plan

Distributed generation

We are participating in the VPP aggregator construction demonstration

684,000,000 0.23 2021

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project and verifying the construction of a system that utilizes energy resources (storage batteries, power generation facilities, electric vehicles, etc.) possessed in factories and homes, etc., by remote and integrated control using advanced energy management technology, and by making them function as if they were a single power plant, for adjusting the supply and demand of electric power. This fiscal year's demonstration will be conducted with the aim of expanding past efforts to further verify the feasibility as a power supply-demand balance adjustment function in more detail. The period is scheduled to be from May 29, 2020 to February 19, 2021. Specifically, for the further effective utilization of renewable energy, new models will be added to the car share model, tourist site model, and business site model verified in the previous fiscal year, and control verification will be conducted according to the status of the use of electric vehicles. In addition to electric vehicle storage batteries, we will add stationary storage batteries, etc. as energy resources for VPPs, combine them, control them, and participate in the VPP common demonstration in accordance with the product menu of the supply and demand adjustment market, etc. that will begin in April 2021. Planned CAPEX includes the increased book value of new-energy and other power generation facilities in FY2018, and total facility construction costs in FY2018 are used for the CAPEX plan.

C-CE9.6/C-CG9.6/C-CH9.6/C-CN9.6/C-CO9.6/C-EU9.6/C-MM9.6/C-OG9.6/C-RE9.6/C-ST9.6/C-TO9.6/C-TS9.6

(C-CE9.6/C-CG9.6/C-CH9.6/C-CN9.6/C-CO9.6/C-EU9.6/C-MM9.6/C-OG9.6/C-RE9.6/C-ST9.6/C-TO9.6/C-TS9.6) Does your organization inves t in research and development (R&D) of low-carbon products or services related to your sector activities?

59

Investment in low-carbon R&D

Comment

Row 1

Yes We have positioned the next 5 years (FY2020-2024) as the "business model transformation period" in order to realize our aspirations for the 2030s outlined in Tohoku Electric Power Groups Medium-to Long-Term Vision, and are promoting business development based on 3 Focal points. Focal point 1 "Change" Enhancing competitive strengths through comprehensive reforms in the electricity supply business Focal point 2 "Challenge" Taking on the challenge of swiftly achieving profitability in businesses to realize a smart society Focal point 3 "Create" Evolving the management foundations to support corporate value creation The Group's research and development for FY2020 will focus on these three points mentioned above and based on the principle of "Research and development contributing to safety assurance and stable supply of electricity," the Group will promote initiatives as a united corporate group by setting the following three priority areas. In our efforts, we will carefully select the content of our research based on profitability and future potential and focus on research and development that will lead to "drastic reform of the power supply business" and "early profitability of the smart-society realization business."

Research and development priority areas are as follows.

・ Research and development that utilizes new ICT and other cutting-edge

technologies to strengthen competitiveness and profitability

・ Research and development that will contribute to the realization of an

optimum power source portfolio and a low-carbon society through high-efficiency power generation and the upgrading of re-energy technologies, etc.

・ Research and development that contributes to the acquisition of advanced

technologies that will support future growth and strengthen competitiveness

C-CO9.6a/C-EU9.6a/C-OG9.6a

(C-CO9.6a/C-EU9.6a/C-OG9.6a) Provide details of you r organization's investments in low-carbon R&D for your sector activities over the last three years.

Technology area

Stage of development in the reporting year

Average % of total R&D investment over the last 3 years

R&D investment figure in the reporting year (optional)

Comment

Energy storage

Pilot demonstration

≤20% In order to further expand the introduction of renewable energy, we started operation of the

60

Hydrogen Production System in March 2017 to conduct research on hydrogen production and are conducting research using this system. Specifically, we have installed new solar power generation facilities and hydrogen production equipment in the buildings of our Research and Development Center to produce and store hydrogen using electricity generated by solar power and generate electricity for Research and Development Centers using this hydrogen as fuel.

Steam turbine and/or other component upgrades

Large scale commercial deployment

≤20% In 1984, we became the first company in Japan to introduce a large-capacity gas turbine combined cycle for business use as the Higashi Niigata Unit No. 3 system (Seiro town, Niigata Prefecture). Since then, we have been developing pioneering technologies for gas turbines that contribute to reducing energy consumption and pollution in emissions. At Higashi Niigata Unit No. 4 system, we have accumulated knowledge and expertise in developing high-efficiency gas combined-cycle power generation facilities by applying the element technologies for heat-resistant materials, blade-cooling technology, and high-temperature and low NOX combustors developed for the 1500°C class high-efficiency gas turbine, achieving the world's highest thermal efficiency of 55% or higher (lower calorific value) in 2006, and achieving the world's highest thermal efficiency of 58% at the time when Sendai Unit No. 4

61

began commercial operation in 2010.

As further expansion of the introduction of renewable energy will require thermal power generation facilities to absorb further natural fluctuations, it is anticipated that the operation of these facilities will result in an increase in operations at parts that will be inefficient. Accordingly, research and development (from FY2016 to FY2018) was conducted to further improve operational efficiency and improve efficiency, including partial output.

Specifically, we are working on the development of steam turbines compatible with the minimum output reduction operation to increase the amount of output change, the development of an operation method to shorten the start-up time within a range where the environmental load does not increase, the development of a method to optimize the cooling air flow rate at the partial output, and the development of heat-resistant materials to further improve the combustion temperature. Some of these research results have been introduced to Joetsu Unit No.1, and we are continuing research into the application of these technologies to existing combined-cycle power generation facilities.

In terms of power development (from FY2016 to FY2018), we achieved the world's highest heat efficiency ratio of 60% or more at the Shin-Sendai Unit No. 3-2 system 490MW (the Unit No.3-1 system 490MW started commercial operation in 2015), which began

62

commercial operation in July 2016. In 2017, we increased the output of Sendai Unit No.4 from 446MW to 468MW and Shin-Sendai Unit No.3 system from 980MW to 1046MW. On the other hand, we have jointly developed the Forced-air Cooling Combustor System for the Next-Generation Gas Turbine, which has been developed by plant manufacturers, and has been awarded the 2018 METI Minister’s Award for Excellent Energy-Saving Equipment and Systems. We have introduced the next-generation gas turbine at Joetsu Unit No. 1, which is scheduled to begin commercial operation in June 2023, and are aiming to achieve a thermal efficiency of at least 63%, which is the world's highest level in the field of energy combined cycle power generation.

C10. Verification

C10.1

(C10.1) Indicate the verification/assurance status that applies to your reported emissions.

Verification/assurance status

Scope 1 Third-party verification or assurance process in place

Scope 2 (location-based or market-based) Third-party verification or assurance process in place

Scope 3 Third-party verification or assurance process in place

C10.1a

(C10.1a) Provide further details of the verificatio n/assurance undertaken for your Scope 1 emissions and attach the relevant statement s.

Verification or assurance cycle in place Annual process

63

Status in the current reporting year Complete

Type of verification or assurance Limited assurance

Attach the statement

verification.pdf

Page/section reference See page 1 for Independent Assurance Report, see page 2 for Letters from independent third parties for CDP responses, see page 3 for scope 1 emissions.

Relevant standard ISAE3000

Proportion of reported emissions verified (%) 100

C10.1b

(C10.1b) Provide further details of the verificatio n/assurance undertaken for your Scope 2 emissions and attach the relevant statement s.

Scope 2 approach Scope 2 market-based





verification.pdf

Page/ section reference See page 1 for Independent Assurance Report, see page 2 for Letters from independent third parties for CDP responses, see page 3 for scope 2 emissions.


Proportion of reported emissions verified (%)

64

100

C10.1c

(C10.1c) Provide further details of the verificatio n/assurance undertaken for your Scope 3 emissions and attach the relevant statement s.

Scope 3 category Scope 3: Fuel and energy related activities (not included in Scopes 1 or 2)





verification.pdf

Page/ section reference See page 1 for Independent Assurance Report, see page 2 for Letters from independent third parties for CDP responses, see page 3 for scope 3 emissions.


Proportion of reported emissions verified (%) 92

C10.2

(C10.2) Do you verify any climate-related informati on reported in your CDP disclosure other than the emissions figures reported in C6.1, C6.3, and C6.5?

No, but we are actively considering verifying within the next two years

C11. Carbon pricing

C11.1

(C11.1) Are any of your operations or activities re gulated by a carbon pricing system (i.e. ETS, Cap & Trade or Carbon Tax)?

Yes

65

C11.1a

(C11.1a) Select the carbon pricing regulation(s) wh ich impacts your operations. Japan carbon tax

C11.1c

(C11.1c) Complete the following table for each of t he tax systems you are regulated by.

Japan carbon tax

Period start date April 1 2018

Period end date March 31 2019

% of total Scope 1 emissions covered by tax 100

Total cost of tax paid 9,000,000,000

Comment JPY9 billion of total tax paid is calculated by multiplying the fuel consumption for FY 2018 by the tax rate of "tax for measures against global warming".

C11.1d

(C11.1d) What is your strategy for complying with t he systems you are regulated by or anticipate being regulated by?

"Tax for Climate Change Mitigation" is the tax based on the amount of fossil fuels procured. Therefore, as a strategic measure to comply with this system, we believe that reducing fossil fuels consumption and further improving efficiency will be effective while aiming for an optimal power source portfolio based on S+3E. Specifically, we can expect a reduction in carbon taxes that we pay through such measures as restarting nuclear power plants with the major premise of ensuring safety, further expanding the introduction of renewable energy, increasing the efficiency of thermal power generation and reducing carbon emissions through the abolition of aged thermal power generation. Firstly, regarding nuclear power plants, we are aiming for the early restart of Onagawa Nuclear Power Plant’s Unit No. 2and Higashidori Nuclear Power Plant’s Unit No. 1 on the premise of ensuring safety. In February 2020, we decided to complete the construction of Onagawa Nuclear Power Plant’s Unit No. 2, which was granted permission to change the installation of nuclear reactors in FY2022. We are also aiming for the early resumption of operations at the Onagawa Nuclear Power Plant’s Unit No. 3while appropriately responding to various issues. Next, regarding renewable energy, having wind power generation at the core and covering solar, hydroelectric, geothermal, and biomass power generation, we will utilize the know-how our group has acquired and work on new development and business projects. Aiming for 2,000

66

MW mainly in the six prefectures of Tohoku and Niigata Prefecture, we will preferentially devote our management resources to the effort. In addition, in order to utilize renewable energy in the long term and sustainably, we will become involved in the entire life cycle of renewable energy and will also consider conducting operation and maintenance(O&M) and power source replacement business. Furthermore, with regard to thermal power generation, our Noshiro Thermal Power Plant’s Unit No.3 came online in March 2020. Employing ultra-supercritical (USC) technology and by boosting steam temperatures, Noshiro Unit Power Plant’s Unit No.3 has achieved thermal efficiency of 46%, among the world’s highest levels of thermal efficiency recorded to date (based on low-level heat generation volume) for coal-fired power generation equipment. We believe that it enables us to achieve both high economic benefits and reduction of CO2 emissions. In addition, Joetsu Thermal Power Plant’s Unit No.1, which is expected to come online in 2023, will employ a next-generation gas turbine adopting a forced air-cooled combustor system jointly. This unit is designed to achieve both high economic benefits and lower environmental impact by reducing fuel consumption and CO2 emissions with the goal of realizing a world-leading thermal efficiency of 63% or better for gas combined cycle power generation equipment. In addition, Akita Thermal Power Plant Unit’s No. 3 terminated operation in September 2019 and No. 2 in March 2020 in order to suspend and decommission old and inefficient thermal power plants, which are not environmentally friendly or economical. In March 2019, we discontinued the use of gas turbines at Akita Thermal Power Plant’s Unit No. 5 and Higashi Niigata Thermal Power Plant’s Unit No. 5. In FY 2020, we intend to utilize the decommissioned facilities effectively and reduce fuel consumption and CO2 emissions by improving operability and thermal efficiency by diverting gas turbines to Higashi Niigata Unit No. 4-1 system. Furthermore, the long-term suspension is scheduled for Higashi Niigata Thermal Power Plant’s Unit No. 1 and No. 2 in March 2021. In addition, Akita Thermal Power Plant’s Unit No. 4 is being operated over time, and while operations will continue for the time being, consideration will be given to discontinuing it in the future. In addition, we introduced a system incorporating IoT technology in FY2019. We continue to strive to maintain and improve heat efficiency by conducting careful daily operation management and stable operation of high-efficiency plants. In this way, we are devising strategies to comply with regulations while aiming to reduce fossil fuel use and further improve efficiency.

(C11.2) Has your organization originated or purcha sed any project-based carbon credits within the reporting period?

No

C11.3

(C11.3) Does your organization use an internal pric e on carbon? Yes

C11.3a

(C11.3a) Provide details of how your organization u ses an internal price on carbon.

67

Objective for implementing an internal carbon price Drive energy efficiency Drive low-carbon investment

GHG Scope Scope 1

Application Thermal power station etc. It is used to assess risks and opportunities associated with investment in power plants, such as reducing CO2 emission factors, increasing non-fossil ratios, and regulatory costs related to climate change issues.

Actual price(s) used (Currency /metric ton) 2,600

Variance of price(s) used We refer to the prices of non-fossil fuel energy certificates that can be used to report the CO2 emission factors of electric power companies under the Act on Promotion of Global Warming Countermeasures. Specifically, the national average coefficient is assumed to be 0.5kg-CO2 / kWh and converted from the lowest bid price of 1.3 JPY / kWh for FIT non-fossil fuel energy certificates. This pricing gradually changes over time.

Type of internal carbon price Shadow price

Impact & implication As an assessment of the risks and opportunities associated with investment in a power plant, we conduct a price assessment based on the CO2 emission factors of the power plant and the above internal carbon price. Since the introduction of the system, there have been no investment projects related to power plants and there have been no cases of application.

C12. Engagement

C12.1

(C12.1) Do you engage with your value chain on clim ate-related issues? Yes, our customers Yes, other partners in the value chain

C12.1b

(C12.1b) Give details of your climate-related engag ement strategy with your customers.

Type of engagement Collaboration & innovation

68

Details of engagement Run a campaign to encourage innovation to reduce climate change impacts

% of customers by number 85.8

% customer-related Scope 3 emissions as reported in C6.5 100

Please explain the rationale for selecting this gro up of customers and scope of engagement

Since electricity supply business is our core business, cooperation with all entities in demand of electricity is vital to promote energy conservation. For example, we supply about 30% of the hot water and 40% of the heating energy used in the homes in the Tohoku region. Given this situation, in order to promote energy conservation at home, it is also essential to promote high-efficiency, highly airtight houses that improve the performance of houses themselves, while taking into account the regional characteristics of customers' residences, along with high-efficiency hot water supply and heating systems that utilize heat pump technology. We provide energy services to customers who use our electricity, including factories, hospitals and welfare facilities, school-related facilities, and agricultural facilities, that lead to energy savings and cost savings.

Impact of engagement, including measures of success We provide energy services to our customers who use our electricity, including homes, factories, hospitals and welfare facilities, school-related facilities and agricultural facilities, that lead to energy savings and cost savings. In particular, as about 30% of households in the Tohoku region consume energy through water heaters, the key to protecting the environment is to reduce this consumption as much as possible. By introducing Eco Cute, a hot water supply system using heat pump technology, the CO2 emission from hot water supply can be reduced. We cooperate with manufacturers and electricity stores to propose the introduction of Eco Cute to customers. In addition, in conjunction with the introduction of equipment, we are working to conserve energy in terms of electricity use and to equalize load by proposing a menu of electricity rates for each time zone that matches the lifestyle. We monitor the status on an ongoing basis based on the cumulative total of Eco Cute units introduced through our company. The number of units introduced has reached 481,537 in FY2018.

C12.1d

(C12.1d) Give details of your climate-related engag ement strategy with other partners in the value chain.

We regard environmental conservation as one of the key management issues and are promoting initiatives such as reducing CO2 emissions while formulating the Mid-term Environmental Action Plan. As part of these efforts, we are undertaking initiatives in partnership with Toyota Motor Corporation. Specifically, for customers who have purchased plug-in hybrid vehicles (PHV) with superior environmental performance, we are implementing a “PHV Yorisou

69

e-Drive Service” that enables them to earn the Company's "Yorisou e-Points" depending on EV mode driving distance, etc., thereby contributing to improving energy use efficiency for customers. We offer a variety of services through our membership-based Web service "Yorisou e-Net" under the “PHV Yorisou e-Drive Service”. PHVs are hybrid cars that can be recharged from an external power source. They combine the advantages of electric cars, which do not emit CO2 or exhaust gases while driving, with the advantages of hybrid cars, which offer excellent fuel efficiency. The government-formulated Global Warming Countermeasures Plan also states that the spread and expansion of next-generation vehicles, such as PHVs, is a measure to reduce the transport sector, which accounts for approximately 19% of Japan's total CO2 emissions. We also plan to introduce a total of around 100 PHVs as commercial vehicles over the 10 years from FY2016 onward and expect to reduce CO2 emissions by around 60 tons per year. The “PHV Yorisou e-Drive Service” is a unique initiative to protect the rich nature of the region and hand down the global environment to the future in a more desirable form. We will continue to develop initiatives that better meet customer needs while reducing environmental impact.

C12.3

(C12.3) Do you engage in activities that could eith er directly or indirectly influence public policy on climate-related issues through any of the following?

Trade associations Funding research organizations Other

C12.3b

(C12.3b) Are you on the board of any trade associat ions or do you provide funding beyond membership?

Yes

C12.3c

(C12.3c) Enter the details of those trade associati ons that are likely to take a position on climate change legislation.

Trade association The Electric Power Council for a Low Carbon Society

Is your position on climate change consistent with theirs? Consistent

Please explain the trade association’s position In order to steadily promote initiatives aimed at attaining the goals set out in the Action Plan for the Electricity Industry for Achieving a Low-Carbon Society, we promote and support efforts of member companies and promote the PDCA cycle.

70

How have you influenced, or are you attempting to i nfluence their position? The General Manager of the Environment Division participates in the Board of Directors of the Council as a Director and strives to reflect opinions on the operation of the council for achieving the goals. In addition, when reporting to the Council our Company implements a PDCA cycle for our individual company action plan concerning the Action Plan for the Electricity Industry for Achieving a Low-Carbon Society and report examples that can be shared by other member companies.

C12.3d

(C12.3d) Do you publicly disclose a list of all res earch organizations that you fund? No

C12.3e

(C12.3e) Provide details of the other engagement ac tivities that you undertake. We have been participating in direct ammonia burning of energy carriers since 2015 in the Strategic Innovation Creation Program (SIP) sponsored by the Cabinet Office. In addition to investigating legal issues related to the use of ammonia as fuel for thermal power generation facilities, we conducted a simulation analysis of the impacts of mixed combustion of ammonia in the LNG Combined Cycle Power Generation Facility (GTCC) and confirmed that there were no major legal challenges and that we were able to respond without major modifications to existing facilities by analysis.

C12.3f

(C12.3f) What processes do you have in place to ens ure that all of your direct and indirect activities that influence policy are consi stent with your overall climate change strategy?

The Action Plan for the Electricity Industry for Achieving a Low-Carbon Society of the Electric Power Council for a Low Carbon Society, an industry organization, is evaluated by the Executive Board each year. It also reports to the Japanese Ministry of Economy, Trade and Industry and Keidanren (Japanese Business Federation) and is evaluated by a third party council. (Results: Ministry of Economy, Trade and Industry, Industrial Structure Council, Resource and Energy Working Group 2018 12.18, Keidanren Low Carbon Society Realization Program Third Party Commission 2018. 12.21, Ministry of the Environment Opinion Exchange Meeting 2019 2.20) We are developing a PDCA cycle of the initiatives outlined in this action plan above as our own Mid-term Environmental Action Plan. Specifically, the Environmental Management Committee deliberates policies, plans, individual measures, and performance evaluations related to the Mid-term Environmental Action Plan on a cross-divisional basis and proposes and reports to the Global Environment Issue Countermeasure Council. In addition, we are cooperating and supporting efforts to establish CCS (CO2 recovery and storage) technology. We are investing in Japan CCS Research Co., Ltd., a research organization, and dispatching officers. This Japan CCS Research Co., Ltd. is implementing Japan's first large-scale CCS demonstration project (separating and collecting CO2, injection, storage, and monitoring) in Tomakomai City, Hokkaido, and is expected to be put into practical use in the future. Information on CCS is reported and shared with management as appropriate.

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C12.4

(C12.4) Have you published information about your o rganization’s response to climate change and GHG emissions performance for this repor ting year in places other than in your CDP response? If so, please attach the publ ication(s).

Publication In mainstream reports

Status Complete

Attach the document

h30ho.pdf

Page/Section reference Governance (p.37,p.39,p.40(3)

Strategy, Opportunities (p.10＜新たな事業機会への挑戦＞)

Risks (p.12,p.13)

Opportunities (p.14＜最適な設備形成と再生可能エネルギー導入拡大に向けた取り組み,

p.20(3)＞

Content elements Governance Strategy Risks & Opportunities

Comment

Publication In voluntary sustainability report

Status Complete

Attach the document

tohoku_report2019_jp.pdf

Page/Section reference Governance (p.42,43 (Environmental Management)) Governance (p.51,52 (Corporate Governance))

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Strategy (p.14-39 (Strategies)) Risks (p.58,59 (Crisis management structure)) Opportunities (p.33-39 (Cultivating New Business Opportunities)) Emissions figures (ESG DATABOOK p.8 (Climate Change)) Emissions figures (ESG DATABOOK p.32 (Performance Data)) Emission targets (p.43 (Awareness of climate change and preventative actions)) Other metrics (ESG DATABOOK p.30 (Performance Data))

Content elements Governance Strategy Risks & Opportunities Emissions figures Emission targets Other metrics

Comment

C15. Signoff

C-FI

(C-FI) Use this field to provide any additional inf ormation or context that you feel is relevant to your organization's response. Please no te that this field is optional and is not scored.

C15.1

(C15.1) Provide details for the person that has sig ned off (approved) your CDP climate change response.

Job title Corresponding job category

Row 1 President President

Submit your response

In which language are you submitting your response? Japanese

Please confirm how your response should be handled by CDP

I am submitting to Public or Non-Public Submission

I am submitting my response Public

c0. introductionthe action plan for the electricity industry for achieving a low-carbon society of...

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