Electric Power Development Co. is planning to build a thermal power plant in Yamaguchi Prefecture as nuclear reactors stay idled following the 2011 Fukushima core meltdowns, a source said Friday.

The plan by the electricity wholesaler known as J-Power to build the 1,200-megawatt coal-burning plant in the city of Ube also involves Osaka Gas Co. and chemical manufacturer Ube Industries Ltd., the source said.

The plant would be built on a vacant lot near Ube Industries’ coal importation facility at a cost of ¥200 billion to ¥300 billion.

J-Power will start out with a 600-megawatt plant to be completed in the early 2020s while a second facility of the same scale will be built later.

The three firms will set up a special-purpose company to build and operate the power plant. Power will be distributed among them depending on their respective stakes, which have yet to be decided, and sold to utilities, according to the source.

All of Japan’s 48 commercial nuclear reactors are offline until they can pass beefed-up safety checks. Given uncertainty over when and whether they can restart, the balance between electricity supply and demand remains tight, particularly in western Japan, where utilities have depended more on atomic power than in other areas.

Furthermore, many reactors in western Japan began operations more than 35 years ago and are facing decommissioning due to old age.

Against this background, J-Power believes there is potential demand for thermal power generation in the region, the source said.