However, rather than phasing out all of Japan’s pre-1995 coal-fired fleet, market observers say it is more likely that all lower efficiency plants could be targeted. Low-efficiency coal power plants are defined as requiring more than 8,600 Btu of fuel per kWh of electricity output.
Lost coal capacity could reach 160 TWh
If all these units will be closed, Japan would lose an estimated 24 GW of thermal generating capacity which represents about 51% of the country’s currently operating fleet of coal power plants. This is a significant proportion of the current mix, representing about 51% of Japan’s operational coal-fired plants.
Assuming that a gradual phasing out takes place over the next decade, then Japan’s power mix has “little option but to become more reliant on nuclear and imported LNG,” says Wood Mackenzie Asia Pacific vice-chair, Gavin Thompson. In his view, ‘lost’ coal generation could reach around 160 TWh by 2030.
Gas, nuclear generation to fill the gap
In this case, the contribution of nuclear power would have to be increased but gas-fired generation is likely to fill make up for most of the lost capacity. By 2030, up to an additional 13 million tons (Mt) of LNG could be required to help fill the gap.
“Any issue with nuclear restarts – an obvious risk - and LNG demand could be higher still. This will inevitably increase generation costs,” Thompson cautioned.
Japan is also expected to build over 50 GW of renewables capacity out to 2030, including a major increase in offshore wind, though high costs of that technology in Japan make it rather challenging.
‘Clean coal’ IGCC plants gain ground
Some of the shuttered ageing coal-fired capacity might also be replaced with clean coal power units. Around 6.1 GW of ultra-supercritical and integrated gasification combined cycle coal plants (IGCC) are currently under construction in Japan.
Others have been proposed, and Wood Mackenzie pointed out that given their higher operational efficiencies, adding a significant volume of newer IGCC units to replace less efficient plants would “clearly support a continued role for coal in Japan’s power mix.”
In the long run, this would also allow the government to keep up its existing 2030 clean energy targets to reduce the share of unabated coal in the energy mix to around 25%.
