A protester holds a bucket of coal during a demonstration demanding that Japan stop supporting coal at home and overseas, at the G20 Summit in Osaka on June 28. Photo: REUTERS/Jorge Silva
business

King coal rules for power utilities in Japan

39 Comments
By Aaron Sheldrick and Yuri Harada

Japanese utilities will rely on the return of coal-fired power plants from maintenance to meet peak electricity demand this summer, highlighting the country’s dependence on the more polluting fuel instead of natural gas.

Coal-power stations capable of producing 10,437 megawatts (MW) of electricity will be fired up in the next few weeks, a Reuters survey of the companies shows.

The return of these units illustrates Japan’s inability to shake off coal as a mainstay fuel for its power generation despite pledges to reduce carbon emissions under the 2015 Paris climate agreement and even as the country remains the world’s largest liquefied natural gas (LNG) buyer.

Coal remains the cheapest fuel source for Japanese utilities as long-term contracts for cleaner burning LNG have risen this year since they are tied to the price of crude oil, which is up 25% in 2019.

As a percentage of Japan’s generation units, Japan’s gas-fired power capacity is nearly double that of coal. But utilities rely more on coal as a so-called baseload source, providing a continuous supply of electricity, while gas units are typically ramped up quickly to meet surges in demand.

Japan’s average import price for LNG in May was $9.41 per million British thermal units (mmBtu), according to the country’s trade bureau. Meanwhile, spot LNG prices dropped to $4.30 per mmBtu as of last week amid slowing demand.

However, Japan in May paid $4.26 per mmBtu for thermal coal supplies from Australia, which provided two-thirds of imports.

“Unless they are mandated or pushed to switch off coal we think the economic case is relatively limited to encourage more LNG use at the expense of coal,” said Giles Farrer, research director, global LNG, at Wood Mackenzie. “The price levers don’t support it on an overall basis.”

Japanese utilities are unable to dip into the cheaper spot LNG market because so much of their supply is being met by the existing higher-priced long-term contracts.

That is a hangover from the 2011 Fukushima nuclear disaster that shuttered the country’s reactors which had met 30% of Japan’s power needs. Without the nuclear power, utilities rushed to sign gas contracts, which are just starting to kick in.

Coal power is expected to provide 285.7 billion kilowatt hours (kWh) of electricity in the year through March 2020, an increase of 3.3% over the previous twelve months, according to supply plans submitted by utilities and generators to the government and published by Japan’s power grid monitor.

Generation from LNG is expected to fall almost 9% to 347.1 billion kWh during the same period, according to the grid monitor, the Organization for Cross-regional Coordination of Transmission Operators.

JERA, Japan’s biggest power generator and LNG buyer, Kansai Electric Power, the country’s second-largest power company, and seven other operators will have brought back 18 coal-fired power plants in the next few weeks, the companies told Reuters in responses to a survey on their LNG and coal use.

They all said they would restart coal plants once maintenance was completed, with JERA starting up 2,300 MW of coal power in recent days.

Japanese utilities typically put coal stations into maintenance in between the winter and peak demand seasons.

LNG makes up 25.9% of Japan’s overall generation capacity while coal accounts for 14.9% of the capacity, according to the grid monitor.

However, the utilities will run their coal plants much closer to their actual capacity than the gas plants. For coal plants, this capacity factor will be 73% of their full output in 2019, down 0.2 percentage points from 2018, according to the grid operator data.

The capacity factor for gas plants in 2019 is forecast to fall more than 5 percentage points to 47.6%, the data showed.

Japanese utility Hokuriku Electric, which operates in western Japan, said it would not switch from coal to LNG even if prices dropped further.

“We barely have the capacity to switch swiftly from coal to LNG and vice versa,” the company said.

Other operators said a range of factors were considered when deciding on fuel choice, including delivery schedules for fuel under contract, inventory levels and operational readiness of units.

“We do not decide on our power sources only on the basis of a decline in LNG prices,” Kansai Electric said in response to the survey, declining to comment on whether it would use more of the fuel.

© (c) Copyright Thomson Reuters 2019. Click For Restrictions - https://agency.reuters.com/en/copyright.html

©2019 GPlusMedia Inc.

39 Comments
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Japanese prefer economy and less unemployement than environmental friendly behavior and difficulty to find a job. A good choice.

-11 ( +10 / -21 )

All this talk about how much electricity they need, where it comes from and how much they need, but nothing about any kind of concentrated effort to conserve energy or about relying on any renewable alternatives.

9 ( +16 / -7 )

Japanese prefer economy and less unemployement than environmental friendly behavior and difficulty to find a job. A good choice.

A false duality. The world is not binary.

7 ( +14 / -7 )

Any government or voter who puts economy above environment is short-sighted and completely unware or ignorant about the severity of the situation (climate change, extinction crisis ....) our greed had led us too.

5 ( +14 / -9 )

Tell me more about how electric cars are "zero emission"

9 ( +17 / -8 )

but nothing about any kind of concentrated effort to conserve energy or about relying on any renewable alternatives.

It's hard not to think the LDP oyajis and Japan Inc. want to remain DEpendent on the US/Russia/Gulf states and others selling fossil fuels.

Japanese government and business leaders do NOT push energy conservation measures as part of the pathway to energy INdependence.

Why would an island nation with so few natural resources want to remain a vassal state.

6 ( +8 / -2 )

Japan with abundant sun, wind and hydro and it can’t make a move to lessen dependence on fossil fuel?

6 ( +12 / -6 )

kurisupisu - Japan with abundant sun, wind and hydro and it can’t make a move to lessen dependence on fossil fuel?

You forgot to mention Japans most abundant and reliable alternative energy resource, geothermal. Every onsen (hot spa resort) in the country could be generating its own electricity for free.

15 ( +17 / -2 )

Tell me more about how electric cars are "zero emission"

Very simple - charge them using renewable energy - it's not rocket science.

And besides, even dirty fossil fuel sourced electricity with centrally produced emissions can be much cleaner than fossil fuel burned and emitted by regular cars - especially in congested cities.

1 ( +7 / -6 )

There's not much point in getting all hot and bothered about Japan's use of coal when next door China is going hell for leather to develope coal mines in Australia and India is doing the same. There are untold millions of poor people in India who are looking forward to the day when they wiil be getting electricity from coal supplied by Australia. Climate change fanatics are fighting a losing battle.

-2 ( +9 / -11 )

That isn't coal in the bucket.

4 ( +6 / -2 )

That isn't coal in the bucket.

Yes it is, just individually wrapped in plastic so your hands don't get dirty. No one wants dirty hands when it comes to the environment.

10 ( +11 / -1 )

Japan could eventually move towards natural gas but that’s a long term project. Japan needs nuclear power above all else. They have no realistic alternatives.

-6 ( +3 / -9 )

When KANSAI electric introduced an additional charge for not using nuclear energy it also stated it would reduce the charge once it was allowed to use its reactors again.

That happened but the charge was not lowered. My electricity prices remain the same at about ¥28/kWh. Total bill divided by kWh used.

Its always about profits.

More installed renewables should have happened by now, 8 years after Fukushima producing 25% of total power.

Signing a LNG contract is like buying a house on a fixed interest rate. Benefit when the rate goes up, loss when it goes down.

Base power, which is the amount of electricity needed 24/7 is about 25% of the total needed. That was generated by nuclear now by coal. Coal fired stations need to be run at near capacity because coal can't just be turned on and off like LNG.

There was also the deregulation of the supply industry which was suppose to lower the price of electricity but the effect is less than was originally thought. I didn't change because the price benefits were too small.

Power companies are now able to sell gas and gas companies power. Both are also selling internet services.

Some power companies like Kyushu refused to buy any more renewable energy because it was overloading the power supply grid which is BS.

4 ( +6 / -2 )

Lots of neon lights still being used in the advertising signs.

6 ( +6 / -0 )

My American friend before laughed when he saw Japanese people move around their kerosene stoves from one place to other to save fuel and money. It was for the first time for him to see a portable heater. Their houses are all centrally heated. How much they use fossil fuels and its influence to the environment?

-2 ( +4 / -6 )

People want to eat their cake and have it too. Japan needs energy. If you live in Japan your going to have to settle for coal or nuclear. It's just the way it is until green energies (if ever) become more viable.

Also the government is changing the law for the solar panel energy mandatory buying for electric companies because it's forcing the electric companies to raise prices on people who can't afford the panels. So these schemes to make people go green usually end up hurting the people financially. And people will need the money especially with the sales tax increase.

Coal is the reasonable answer for Japan atm and their coal power plants are much more cleaner than China or India. Maybe people should demand those countries add scrubbers to their coal power plants rather than obsessing on co2. We can prove the pollution coming from those plants are cancer causing and unhealthy at least.

-4 ( +3 / -7 )

The big four and the 'white goods' manufacturers continue to push Voice controllers, AI and remote controlled electronic devices out into the market place, all powered by electricity in the theme of labour- and time-saving, yet without a thought to where the power comes from? Their standby modes all consume a little power, but added up, makes a considerable impact on the electricity usage. Maybe time to go back to manually switching things on and off, and getting out of the sofa or off the tatami to do it?

5 ( +5 / -0 )

That is definitely coal in the bucket. Coal is very beautiful if you ever get the chance to pick a piece up.

-1 ( +3 / -4 )

Until the Hydrogen economy blooms the best cleanest you can use is Natural gas. It burns in the same plants you burn coal in and USA has plenty to sell :) I'm sure Trump will get Japan a special deal and low price. USA lowered CO2 by 1/3 switching.

the Heanous part of coal is the fly ash that contains mercury that lands in the sea and eaten by microorganisms...that get eaten by small fishes ...that get eaten by larger fish and concentrated in that fish....that gets eaten by Tuna and Albacore that gets big dose of Mercury and why your fish full of large amounts of Mercury . BTW radioactive isotopes can also concentrate this way in biological paths

1 ( +2 / -1 )

The cleanest and cheapest electricity is HYDROELECTRIC . Nicolai Tesla and Westinghouse Co, built the first hydroelectric plant over 100 years ago at Niagara Falls on the Canada USA border by Buffalo NY. These plants are still there making cleanest cheapest power today. USA pays an average of .12 KWhr and Sweden also did the smart move using Hydroelectric https://www.worldatlas.com/articles/electricity-rates-around-the-world.html

https://bigthink.com/paul-ratner/why-nikola-teslas-greatest-achievement-may-be-in-niagara-falls

6 ( +6 / -0 )

Any government or voter who puts economy above environment is short-sighted and completely unware or ignorant about the severity of the situation (climate change, extinction crisis ....) our greed had led us too.

All governments put economy over environment. All of the top economies have the resources, capital, and technology to go completely environmentally friendly with power sources and much more; however, they don't do so because of how huge the economic costs will be. Making such a change will cost billions to trillions in Government subsidies and it will put a very large percentage of people out of work.

@Darren

While Hydroelectricity is the most effiecient way of producing energy and it is much cleaner than most of the other options, it taxes the local habitats greatly. So it also ends up affecting the environment. It uses an incredible amount of land and alters the flow of water. This leads to a build up in many types of things suchs as sediments and aquatic plant life that push the surrounding animals out of the environment.

There is no perfect option.

-4 ( +1 / -5 )

Japan does not use its geothermal capacity which is rated at the third largest in the world. Current installed capacity is only 0.5GW, say compared to base load coal at 40GW, but the capacity is 23GW, which if used would reduce the need for coal.

The prices of solar panels are falling and new ones being made in cheap film form which can be stuck to just about anything. But they won't help the need for base load power.

Countries like the UK do not burn much coal anymore and have reached 26% of power demand from renewables compared with Japan 6.9%, or 14.5% with hydro.

Until the Hydrogen economy blooms the best cleanest you can use is Natural gas. It burns in the same plants you burn coal in and USA has plenty to sell 

Modifying an existing coal-fired boiler to natural gas firing capability, either to replace or to supplement coal as the primary fuel source, is an extensive – and expensive – project. 

The cleanest and cheapest electricity is HYDROELECTRIC 

Japan has already reached maximum capacity for hydro dams.

My American friend before laughed when he saw Japanese people move around their kerosene stoves from one place to other to save fuel and money.

American consume about 1.5 times the amount of electricity of Japanese people. America 12,071 kWh per year. Japan 7,481 kWh per year.

3 ( +4 / -1 )

I’ve asked a friend in academia here about the use of geothermal energy for power generation. He said that the various salts and other dissolved minerals in the water / steam makes it difficult for efficient, continuous power generation and is high maintenance.

2 ( +4 / -2 )

Japan does not use its geothermal capacity...

The Ministry of the Environment protests each time geothermal is proposed, claiming they will ruin the environment and threaten National parks, and a veiled threat to tourism.

A simple fact finding trip to New Zealand would demonstrate that geothermal power has a tiny impact on the land, is easily hidden, and contributes 17% of the country's electricity, around 900MW. There is potential for at least double that. However their Resource Management Act is a bureaucratic nightmare, contributes to delays and increases initial costs.

10 ( +10 / -0 )

Iceland is 85% of total power from geothermal. Philippines 27%. Kenya 51%. America produces 3500 MW from geothermal, about same as 3 nuclear reactors.

3 ( +4 / -1 )

All the Japanese power companies have made major contributions to the coffers of the LDP for many decades ensuring a position of power when he come to using energy for power generation. Nuclear, and now trying to limit the use of renewables and geothermal.

The power companies are a major force.

The International Geothermal Association (IGA) has reported that 10,715 megawatts (MW) of geothermal power in 24 countries is online, which is expected to generate 67,246 GWh of electricity in 2010.

2 ( +3 / -1 )

For residential use, Americans and Canadians use double the electricity Japanese use. See the per person chart.

http://shrinkthatfootprint.com/average-household-electricity-consumption

In Japan that amount will also include electricity for HVAC, cooking (IH) and hot water (eco cute heat pumps). My own home does not use kero or natural gas. Just electric and firewood in winter.

Getting back to coal, but yeah, tons of PM, tons of CO2, lots of mercury, and more radiation than from nuclear plants. "The alternative is coal" could be the strongest reason for turning the nuke plants back on.

-1 ( +2 / -3 )

Japanese coal fired power stations are of low emissions standards which produce a reliable electricity supply keeping Japanese people employed, with low energy costs and are safer than Nuclear power stations in a Country that is prone to earthquakes.

If that isn't enough they can turn to the Americans who have developed Coal powered stations that emit no emissions.

https://8rivers.com/portfolio/allam-cycle/

-5 ( +1 / -6 )

@Andrew Crisp (Coal) ...safer than Nuclear power stations

May be you need to check the statistics that show how many thousands of people die from coal mining, air pollution, water and soil pollution from toxic sludge from coal mines before you claim coal is safer than nuclear.

7 ( +7 / -0 )

As long as the major power monopolies control the power distribution system alternative methods of power generation will never get off the ground in Japan. Even now it is said that most of the power generated by the solar panels that are gradually taking over the entire countryside is not utilized.

3 ( +3 / -0 )

Maybe good nrws for the city of Yubari, Hokaido.

1 ( +1 / -0 )

Electricity is too expensive, and power bills are dreaded.

We have been fortunate to have an extended rainy season, or else

it would be harsh...

Since the 2011 earthquake, trains, stores, offices, et al, are have been cheap about turning AC to levels that actually cool.

If coal can get it done, fire it up.

Summer in Japan is hell on EARTH.

-4 ( +1 / -5 )

When you travel into the countryside, you can't stop noticing the "solar panel" farms springing up in areas that used to be grass.. and on houses. Good to see the local initiative taking the responsibility to generate their their electricity.

4 ( +5 / -1 )

Japan has a plethora of wind, solar and wave power available. If a sun deprived location like the UK can do without coal powered generation then the only reason Japan has not implemented the necessary changes since 2011 is a singular failure of political will and foresight.

bearandrodent, a separate closed cycle using the heat but not the water would solve that problem. It is more about inertia and finding any excuse not to do anything.

Nuclear using the existing plant and the outdated technology of the 50’s and 60’s is suicidal given Japans geology. Modern technology using intrinsically safer liquid salt reactors would be a safer route. There is a company with an installation ready product called Moltex Energy (no I don’t have shares in them!!).

3 ( +4 / -1 )

How many people will perish or get sick from this action? I think it will be in the hundreds of thousands of people.

5 ( +5 / -0 )

When renewal energies become much more affordable, Japan, or any other countries, will move to the new energeis. Not a big deal.

-2 ( +0 / -2 )

Oh when winter sets in, the black hard rock will keep you lighted and warm at night.

-2 ( +1 / -3 )

Japan with abundant sun, wind and hydro and it can’t make a move to lessen dependence on fossil fuel?

Most of Japan is too far north to rely on solar, to mountainous to rely on wind and all three source mentioned require large amounts of land which doesn't work well in a densely populated country.

-5 ( +0 / -5 )

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