Minews - Japan continues to re-embrace coal

(Minews) - Japan is continuing to re-embrace coal to make up for its lack of nuclear energy, with plans for another power station released Thursday bringing the number of new coal-fired plants announced this year to seven.

Utilities in Japan are eager to take advantage of coal’s relative cheapness to give them a competitive edge at a time when other countries are seeking to reduce their greenhouse-gas emissions by moving away from a fuel source seen as dirty.

The liberalization of Japan’s power industry by 2020 will pit power companies against each other as rivals for the first time. In addition, with a relaxation of restrictions on coal power and no new emissions targets on the horizon, utilities are increasingly seeing coal as an important part of their business plans.

Kansai Electric Power Co. and Marubeni Corp. informed Akita prefecture on Thursday of their plans to build a new, 1.3-gigawatt coal-fired power station in the northern prefecture of Japan, the two companies said.

If all seven projects including the plant in Akita materialize, they will increase the nation’s coal-power generation by up to 7.26 gigawatts by around 2025. That is equivalent to seven medium-size nuclear reactors.

The two companies plan to build the power station in an industrial park on the northern coast of the Sea of Japan, with construction slated to begin around 2019 and commercial operations by around 2025. Spokespersons at each company said the relative shares in the project haven’t been decided.

Kansai Electric, based in Osaka, plans to use the Akita project to supply electricity to customers in Tokyo, the only place in Japan where major growth in power demand is expected, a company spokesman said.

The other projects include Chubu Electric Power Co.’s plan to replace an old oil-power station near Nagoya with a 1 gigawatt coal-power station, and a 1.2 gigawatt coal-power station planned by Electric Power Development Co., Osaka Gas Co. and Ube Industries Ltd. in Yamaguchi prefecture in western Japan.

More projects are likely to be announced as the year goes on. Tokyo Electric Power Co. is holding a tender to build new power stations to replace 6 gigawatts of old oil-power capacity in Tokyo. The tender closes at the end of this month.

A company spokesman said it was likely coal would be used, given the need to secure competitive power sources, though he added that a decision hadn’t been made yet.

The relative cheapness of coal was indicated in a 2011 government report that estimated the cost of coal power in Japan at ¥7.5, or about 6 cents, per kilowatt-hour including construction and operation. The same report put the cost of nuclear power at ¥9 per kwh, gas power at ¥10 per kwh and oil power at ¥19 per kwh.

The moves by the power companies are “understandable” in light of the prolonged nuclear outage that has forced power utilities to rely on old, inefficient oil- and gas-power stations, said Hidetoshi Shioda, energy-industry analyst of SMBC Nikko Securities.

All of Japan’s 48 reactors are offline over safety concerns following the Fukushima nuclear accident, though four of them are expected to come back online later this year.

Before the nuclear accident in March 2011, the environment ministry had essentially blocked the building of new coal-power stations through tighter environmental assessments as Japan sought to meet ambitious greenhouse-gas reduction goals that have since been scrapped.

With the power industry straining to meet demand after the accident, the ministry loosened its policy to allow the building of new coal-power capacity provided it used the latest, most efficient technologies available.