Japan Proposes Efficiency Target for Coal-Fired Power Plants

Japan has proposed a new efficiency target for coal-fired power plants which would force power operators to upgrade their power plants if they want to continue operating them after 2030. The target is expected to limit coal-fired power generation and encourage the use of LNG. Under a recommendation issued by a coal power working group under the Ministry of Economy, Trade and Industry (Meti), the government would phase out inefficient coal-fired power plants if they cannot meet a 43% efficiency target. According to Meti's document, the target applies to each power operator, and not individual plants. The efficiency rate will be calculated by dividing generated electricity with the amount of feedstock (coal minus biomass, ammonia and hydrogen) which means increasing the share of less carbon-intensive fuels would improve the plant efficiency. The 43% target, which still requires approval from Meti, is considered a high bar by the power sector. Meti said only two facilities cleared the 43% threshold in fiscal 2019 while 31 plants hit 40%. Most plants will require upgrading to improve their efficiency to meet the new target by 2030. The latest target followed a Meti announcement last year in which it said it would introduce measures to accelerate the closures of old and inefficient coal-fired power plants. Meti's goal is to reduce the share of coal from the current 32%, down to 26% by 2030. The new efficiency target could hit 100 existing coal-fired power plants and in turn encourage LNG as a power fuel for new power plants (LNGI Jul.10'20). The phaseout is targeted at units which are not equipped with the latest clean coal technology, such as ultra-super critical and integrated gasification combined-cycle infrastructure. The ministry is expected to provide guidance to power companies under the 43% mark to help them meet the target. Japanese power utilities have been looking at biomass and ammonia as a co-burning fuel in existing coal-fired plants which can help to reduce carbon emissions. Jera, Japan’s largest power utility, is studying a demonstration plant that would blend ammonia at its coal-fired power plant at Hekinan, just south of Nagoya. The project would require modification work and new infrastructure which would take three years to be completed. "The target allows each company to choose initiatives such as increasing efficiency, stop or shut down," a Jera spokesperson told Energy Intelligence. "We will consider our initiatives at [a] specific plant by taking into account [the] future business environment and stakeholders." Jera has not specified which coal plants it plans to shut down. Another major power utility which would be affected by the new target is J-Power. The utility has said it would expand the application of biomass mixed combustion, replace aging thermal power plants while conducting research on next-generation zero-carbon technologies. Longer term, Japan is hatching plans to import hydrogen and/or ammonia for its power sector which accounts for around 43% of its energy-related CO2 emissions. The world's third-largest economy is looking to take a global lead on hydrogen which would be critical to achieve its net-zero pledge by 2050 (LNGI Oct.26'20). J-Power is part of a Japanese consortium for a Japan-Australia project -- Hydrogen Energy Supply Chain (HESC) supported by both governments -- which is looking to set up a hydrogen supply chain by gasifying brown coal at Latrobe Valley in Australia's Victoria state. The pilot project reached a milestone last month when the gasification and hydrogen refining facilities at Latrobe Valley started operations. The project aims to transport a small amount of liquefied hydrogen later this year to Japan aboard the world’s first purpose-built liquefied hydrogen carrier, the Suiso Frontier. Unlike other pilot projects which have opted to transport ammonia due to hydrogen’s high transport and storage costs, proponents of HESC said the advantage of shipping liquefied hydrogen is that it does not need to be converted back to hydrogen once it has been transported. Japan is in the midst of updating its basic energy strategy for 2030 and 2050, due to be unveiled this summer, and revising its emission reduction targets ahead of the UN Climate Change Conference (COP26) in November to help it achieve its net-zero pledge by 2050. Coal is expected to remain a mainstay of Japan’s power mix with a focus on deploying the most efficient technologies to lower its emissions. Nuclear power remains controversial in Japan where the public has lost confidence in the competency of nuclear operators following the 2011 Fukushima disaster (LNGI Apr.7'21). Japan’s renewables capacity has increased in recent years but its high costs due to a lack of ideal land conditions and lowering of feed-in tariffs could limit its future growth. LNG is seen as a transition fuel in Japan before ammonia or hydrogen becomes commercially viable and reach scale. Clara Tan, Singapore