CORRECTED - (OFFICIAL)-J-Power, Chugoku Elec to test low-emission

(Company corrects figures in paragraph 8 to ... energy efficiency by 10 to 15 percent..., not.. energy efficiency by 50 to 55 percent...)

TOKYO, June 3 (Reuters) - Japan's Electric Power Development Co (9513.T: Quote, Profile, Research) (J-Power) and Chugoku Electric Power Co (9504.T: Quote, Profile, Research) plan to spend several hundreds of millions of dollars to build a coal-fired test plant that is eventually meant to generate power without releasing any carbon dioxide into the atmosphere.

The plant will be Japan's first pre-commercial test case to apply integrated coal gasification combined-cycle generation, a process that will allow it to produce about 15 percent less carbon dioxide than a conventional coal plant, said Masashi Yamazaki, a J-Power spokesman.

In addition, the plant will use pure oxygen rather than air to gasificate coal, allowing it to capture the remaining carbon dioxide more easily in a separate chemical process. CO2, blamed for global warming, will then be pooled and stored elsewhere.

Construction of the plant will cost several tens of billions of yen, the spokesman added. The 150-megawatt plant will start operating by the fiscal year to March, 2017.

Japan imports almost all of the energy it uses. It has increased its reliance on coal, the worst polluter in terms of greenhouse gas emissions, in the past decade due to relatively lower importing costs.

Japan, the world's fifth-biggest emitter of CO2, is now focusing on advanced energy technologies such as efficient coal-fired power plants and carbon capture and storage.

Coal accounted for 20 percent of Japan's primary energy supply in the year ended in March, 2007, up by 4 percentage points from fiscal 1996/97. In contrast, reliance on oil fell to 47 percent from 54 percent during the same period.

"Using oxygen is unique to us," J-Power's Yamazaki said. He added that integrated gasification combined-cycle (IGCC) generation is expected to increase energy efficiency by 10 to 15 percent from that of an ordinary coal plant with the newest facilities of some 40 percent per unit of production.