OREANDA-NEWS. Japanese trading house Sumitomo is planning to build a 50MW biomass-fired power generation plant in northern Japan's Tohoku area, as it looks to take advantage of the country's electricity industry reforms.

Sumitomo will begin building the ?25bn ($208mn) plant in June next year at Sakata in Yamagata prefecture through its subsidiary Summit Energy, aiming to start commercial operations in May 2018. The Sakata plant aims to have the largest biomass-fired capacity in the Tohoku region, using woody biomass bought from domestic and overseas markets.

French utility Engie, formerly GDF Suez, has signed a 10-year delivery contract to supply the plant with 1mn t of wood pellets from 2018.

This is Sumitomo's third biomass power plant, following the 50MW Itoigawashi plant in northwest Japan's Niigata prefecture that started operations in January 2005 and the 75MW Handa plant in central Japan's Aichi prefecture scheduled to come on stream in June 2017.

Reforms of Japan's power industry are under way, after an independent power operator was set up in April in the first phase of a three-stage reform process. The retail power market is scheduled to be fully deregulated by April next year, followed by the spin-off of utilities' power transmission businesses by 2020.