As the developed world moves farther and farther away from coal-fired energy, one major economy is breaking the trend. Japan, in a move that few could have foreseen, has opened at least eight brand new coal-burning power plants in the last two years and has plans for at least 36 more in the next ten years.
This ambitious return to coal far outstrips any other developed nation, and it’s only speeding up. Last month the Japanese government made major advancements to officially adopt a national energy plan that would see 26 percent of the country’s total electricity come from coal in 2030, directly contradicting a previous directive to cut back coal usage to just 10 percent of total electricity.
One major reason for the stark turnaround in policy is the 2011 meltdown at the Fukushima Daiichi Nuclear Power Station. The tragedy provided a huge blow to the Japanese public’s support for nuclear energy. After the Fukushima disaster, all 54 of Japan’s nuclear reactors were shut down as they awaited new rigorous safety standards. To date, just seven of the 54 have reopened for business. In order to fulfill demand, the nation has turned to natural gas and, more surprisingly, coal.
However, despite all the love lost for nuclear, there are also plenty of critics to Japan’s new direction, who say that the government is being weak on renewables and that the return to coal guarantees a major rise in air pollution, standing in direct conflict with Japan’s pledges to cut its greenhouse gas emissions. As it stands now, the country is responsible for a whopping 4 percent of global emissions, and that’s before the impending construction of 36 coal plants over the next decade. Related: Rooftop Solar Could Power 75% Of U.S. Homes
In addition to its bullish building plans, Japan is also backing off on previous promises to shutter existing coal facilities. Instead of looking to clean up coal and invest in ageing infrastructure, local power company Electric Power Development Co Ltd. recently announced that they would forgo a previously announced plan to replace two ageing coal-fired power plants with newer, more efficient facilities in the Takasago region of Western Japan. Instead of moving forward with their plans to construct two 600-megawatt (MW) coal-fired power generation units the company will continue to use facilities that are now nearly 50 years old.
Japan’s hunger for coal is not purely domestic--last month the government of Wyoming announced that the Japan Coal Energy Center and Kawasaki Heavy Industries intend to spend $9 million in grant funding for research of carbon capture near the U.S. city of Gillette. Japan’s relationship with Wyoming coal, however, is nothing new. In 2016 Wyoming governor Matt Mead signed an agreement to collaborate with the Japan Coal Energy Center for coal research and technology. As the U.S. continues to move away from coal despite the administration's coal-positive rhetoric, the interest and research money coming from Japan is a breath of fresh air in a dying industry.
In addition to their research on carbon innovations in Wyoming, Japan is also looking for other ways to greenify coal, including looking into the fossil fuel as a possible source of energy for hydrogen-powered cars. In fact, Japanese engineering firm Kawasaki Heavy Industries has partnered with Australia to turn their cheap coal into hydrogen gas in a new Melbourne-based $390m pilot plant.
Just a few years ago, any expert would have told you that Japan’s coal industry was on its last legs as well. The nation was leaning heavily into nuclear power, with plans to cut by half what was a 25 percent dependency on coal in 2010 and increase atomic energy from 29 percent to 50 percent by 2030. Now, that trend has done a full 180°. Related: Brent Rises To 4-Year High As Houthis Target Saudi Oil Facility
Unlike other developed nations that now depend heavily on cheap natural gas, for Japan the math works out to coal’s benefit. Since the island nation has to import natural gas in its relatively pricey liquid form, coal is the more fiscally savvy option.
So far, the turn has been a boon to the economy. In one example, Japanese trading house Itochu Corp recently announced a 13.7 percent boost in annual net profit, and they attribute a large portion of it to higher coal prices thanks to the newfound demand. They’ve predicted that the current financial year will also be one of their best.
Against all odds, coal is making a comeback in at least one major global market, and with China and India (two of the largest markets in the world) continuing to depend heavily on coal, it looks like the once-ailing industry may have some life left in it after all.
By Haley Zaremba for Oilprice.com
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