Japan cuts 2030 coal/gas power share targets

Source : https://www.argusmedia.com/en/news/2236379-japan-cuts-2030-coalgas-power-share-targets


Japanese annual power-sector coal and LNG demand would fall by around 53.8mn t and 23.1mn t, respectively, by 2030-31 from the 2019-20 level, according to Argus analysis of the government's latest proposals for the power sector.

Japan today set a new target to reduce the share of thermal power generation in the national mix to 41pc by 2030-31, in a draft basic energy plan published by the trade and industry ministry (Meti).

The new goal, which is down from a previous 2030 target share of 56pc and from the 2019-20 share of 76pc, is part of the government's strategy to expand renewable generation and decarbonise by 2050.

Japan announced tougher emissions reduction targets earlier this year and is now aiming to cut 2030-31 greenhouse gas (GHG) output by 46pc compared with 2013-14 levels, up from a 26pc target reduction previously.

The new 41pc target for generation from fossil fuels comprises a 20pc share for LNG, 19pc for coal and 2pc for oil. This is down from previous 2030 targets of 27pc, 26pc and 3pc, and from actual 2019-20 shares of 37pc, 32pc and 7pc, Meti said.

The new lower target for coal's share of the power mix comes only a week after Meti said that it would be difficult to cut coal's share to 20-25pc by 2030-31, given that it has to ensure supply security and limit the impact on in-house power generators in the industrial sector.

In absolute terms, annual gas and coal-fired generation would fall to 187TWh and 177.7TWh in 2030-31 if the targets are met, based on Meti's 935TWh forecast for overall power generation at the start of the next decade. This would be down by 191.9TWh for gas and by 150TWh for coal from the 2019-20 level, when overall power generation was 1,024TWh, according to Meti figures.

This suggests annual power-sector NAR 6,000 kcal/kg-equivalent coal consumption of around 63.6mn t in 2030-31, assuming a 40pc plant efficiency, down by 53.8mn t from 2019-20. LNG consumption would drop by around 23.1mn t to 22.5mn t/year, assuming a 55pc plant efficiency.

Gas and coal-fired generation in 2030-31 would also be 100.6TWh (12.1mn t of LNG) and 99.3TWh (35.6mn t of NAR 6,000 kcal/kg coal) lower than previously targeted, with around three-quarters of this decline the result of a lower government forecast for overall power generation and the remainder due to new lower target shares for each fuel.

Meti now expects 2030-31 power generation to drop to 930-940TWh from a previous outlook of 1,065TWh and from 1,024TWh in 2019-20, it said.


Renewables boost

Japan is targeting an increase in the share of renewable generation in 2030-31 compared with both previous targets and the 2019-20 level to help reduce the country's reliance on thermal generation.

Meti has increased the target renewables share for 2030-31 to 36-38pc, from a previous aim of 22-24pc and from 18pc in 2019-20. The new 2030-31 renewable goal includes a 15pc share for solar, 6pc for wind, 10pc for hydro, 5pc for biomass and 1pc for geothermal.

Solar and wind would account for most of the overall increase from renewables, with output rising to an implied 140.3TWh and 56.1TWh, respectively, according to Argus analysis, from 75TWh and 16.3TWh currently.

Japan has 64GW of installed solar and 10GW of wind (9.2GW onshore and 800MW offshore), according to Meti figures, but this would need to rise by 48.7GW to nearly 113GW for solar and by 16GW to 26GW for wind by 2030-31, according to Argus analysis assuming 14.2pc and 25pc average solar and wind load factors.

The government is accelerating installation of solar power facilities that are relatively easy to install with shorter lead times.


Nuclear share flat

Meti has maintained its previous 2030 nuclear target of 20-22pc, as Tokyo continues to promote the restart of nuclear reactors while keeping safety as its first priority. The target share would still be up sharply from the 6pc actual share in 2019-20.

While the target share remains flat, the new lower outlook for overall power generation means that the approximate 21pc share of total output would equate to 196.5TWh in 2030-31, down from 223.7TWh in the government's previous outlook.

Assuming a 90pc average annual utilisation rate, this would suggest around 25GW of nuclear capacity would need to be available by 2030, according to Argus estimates, up from the 10GW that has already restarted since 2011.

Meti has also set a goal to achieve a 1pc share of hydrogen and ammonia for the first time in the 2030-31 power mix.

The preliminary power mix goal was presented as part of the country's basic energy policy, which is reviewed every three years. Meti started discussions on latest revisions in October last year, forming a key part of efforts to update its 2030 goal to reduce GHG emissions by 46pc from 2013-14 levels and achieve carbon neutrality by 2050.


By Motoko Hasegawa and Jake Horslen

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