ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Energy

Japan's top coal power company scraps plan for new plant

J-Power cites costs and global pushback for decision on Yamaguchi project

J-Power's Matsushima power station in Nagasaki Prefecture: The company said it will use existing capacity rather than build a new coal-fired plant in Japan. (Photo courtesy of J-Power)

TOKYO -- Japan's top coal power producer J-Power canceled the construction of a power plant in Yamaguchi Prefecture, the company said Friday, as it works to curb its dependence on the fossil fuel amid growing regulatory pressures.

"We have decided against construction upon considering the project's profitability," J-Power Director Hitoshi Kanno said. "We will take advantage of our existing facilities to curb carbon dioxide emissions with as little costs as possible."

J-Power had planned to install two 600-megawatt coal-fired facilities in the city of Ube with Japanese chemical manufacturer Ube Industries and Osaka Gas. Osaka Gas withdrew from the project in April 2019, saying it no longer believed it could recoup the investment.

J-Power and Ube had since downsized plans to a single 600-MW unit, and were considering using cutting-edge environmental equipment and other options to move forward with the project.

But coal, which is carbon-intensive even compared with other fossil fuels, has faced increasing headwinds as Japan and other leading economies ramp up their fight against climate change. Japan aims to achieve net-zero carbon emissions by 2050, and Prime Minister Yoshihide Suga is expected to discuss possible cooperation on climate in his summit with U.S. President Joe Biden on Friday.

As part of Japan's push to curb emissions and shut down inefficient facilities, the economy ministry plans to require all coal power plants to achieve an efficiency rate of 43% by 2030.

The current requirement is 44.3% across all types of thermal power, which includes less carbon-intensive alternatives like liquefied natural gas and petroleum. The Federation of Electric Power Companies of Japan believes achieving 43% is "an extremely ambitious goal" when it comes to coal.

Japan has roughly 150 coal-fired facilities nationwide. Among those operated by a major utility, just two met the threshold in fiscal 2019, while 31 scored an efficiency rate of 40% or above, according to the economy ministry.

Both new and existing plants would require massive investment to achieve the 43% goal. But this could be a risky move, since it usually takes at least 20 years before utilities start earning returns on coal power plants, and Japan could adopt even tougher restrictions on the fuel in the meantime.

"We are seeing pushback against coal across the world, which contributed to our decision" to cancel the new plant, Kanno said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more