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Four Reasons Japan Needs to Cease Coal-Fired Power Exports and Shift to Supporting Renewable EnergyIn response to the discussion on revision of Japan’s Infrastructure System Export Strategy

7 July 2020

in Japanese

Renewable Energy Institute released the English excerpt of  "Four Reasons Japan Needs to  Cease Coal-Fired Power Exports  and Shift to Supporting Renewable Energy" (Japanese full version released on 25 June 2020 ).

English excerpt below:

Background and Purpose of this Document

- On February 12, 2020, Renewable Energy Institute released an information package entitled “5 Fallacies of Japan’s Coal-fired Power Export Policy,“ which showed that the arguments used to justify Japan’s coal-fired power export policy thus far were clearly unfounded.

- This report was mentioned in a press conference given by Environment Minister Shinjiro Koizumi, discussions in the Japanese Diet, and newspaper editorials. On April 1, the Expert Fact Review Committee on Official Assistance for the Export of Coal-fired Power Projects (hereafter “the MOE Committee”) was established under Minister Koizumi.

- At the request of the Ministry of the Environment, on April 21 Renewable Energy Institute submitted “The Move Toward Decarbonization in Asia” to the Fact Review Committee, which outlined the changes occurring in South Korea and China, which had previously pursued coal-fired power exports in a manner similar to Japan, as well as the move toward decarbonization in Southeast Asian nations. The MOE Committee released its summary on May 26, with Minister Koizumi declaring that Japan would aim to shift toward policies that are based on the principle of decarbonization.

Shift from “sell because people buy” to “don’t export unless doing so helps advance decarbonization” (decarbonization principle) 

- Meanwhile, beginning in April the Ministry of Economy, Trade and Industry held the Round-Table Panel for the Post 2020 Infrastructure Systems Export Strategy, focusing on “streamlining and verification of facts on exports of infrastructure systems that are considered necessary in discussing related measures, taking into account the social situations surrounding the fields of energy and electricity.” On May 21, the panel released its interim report (hereafter “METI Report”). This report proposed proactive measures, highlighting “the need for Japan to contribute to the growing renewable energy market.”
 Unfortunately, however, the report included several arguments linked to the rationalization of coal-fired power usage, including underestimating the potential for renewable energy in Southeast Asia and using assumptions based on the IEA scenario, which is not aligned with the Paris Agreement.

- In light of these developments, we are publishing this document in the hope that it will lead to a comprehensive review of the Japanese government’s infrastructure export strategy, resulting in complete cessation of coal-fired power exports and a shift to supporting new energy businesses that serve to advance the expansion of renewable energy sources.
 

Four Reasons Japan Needs to Cease Coal-Fired Power Exports and Shift to Supporting Renewable Energy Business

(1) The claim that Japan’s coal-fired power plants have world-leading efficiency no longer holds true

- It is clear from the METI Report and materials submitted by power companies to the MOE Committee that the claim that Japan’s coal-fired power plants have world-leading energy efficiency, which formed the main argument for Japan’s coal-fired power export strategy, no longer holds true.
- Keisuke Suzuki, State Minister for Foreign Affairs, stated at the third MOE Committee meeting that "the report states that the double-reheat USC units produced solely in China have greater efficiency than the single-reheat USC units produced in Japan, and that the cost is not greater than the Japanese technology. If this is true, the premise for exporting - that Japan’s technology is superior - would change."

(2) ”Coal-fired power and decarbonization in tandem” is unrealistic

- “Decarbonization” technologies advocated in the METI Report such as IGCC and CCS have only a small reduction effect, are costly, and the technology is not yet established. It is also clear from the materials submitted by power companies that the technology is not yet feasible for use in current export projects.

(3) There are major business opportunities for renewable energy development, power grid construction, etc. in Southeast Asia

- Southeast Asia has significant renewable energy potential - more than enough to meet electricity demand.
- The generation cost for photovoltaic technology, etc. is rapidly decreasing, making it cost-competitive versus coal-fired power.
- There is already an international power grid in the Indochina peninsula, with construction/plans progressing in island areas. It is in advancing these initiatives where infrastructure export opportunities lie.

(4) Many corporations and financial institutions are already shifting from coal-fired power to renewable energy businesses
 

Summary of Why Japan Needs to Cease Coal-Fired Power Exports and Shift to Supporting Renewable Energy

(1) The government of Japan is committed to the Paris Agreement, stating that “Determined to lead global decarbonization, Japan will demonstrate its high aspiration and its stance to actively promote efforts for decarbonization both in and out of Japan” (Japan's “Long-term Strategy under the Paris Agreement). Accordingly, the government must adopt an infrastructure export strategy that is aligned with the realization of the Paris Agreement.

(2) Relying on the IEA’s Stated Policies Scenario, the METI Report states that “In 2040, although the ratio of coal-fired power generation will decline comparatively, it is forecast, for example, that coal power will continue to comprise 50 percent of electricity generation in the Asia-Pacific region.” This is used as justification to continue supporting coal-fired power. However, the Stated Policies Scenario does not align with the goals of the Paris Agreement, stating that in 2040 energy-derived CO2 emissions in Southeast Asia will rise some 60 percent from 2018 levels. Determining Japan’s infrastructure export strategy based on the Stated Policies Scenario contradicts the Japanese government’s stated commitment to the Paris Agreement.

(3) Although Japan has lost its primary argument for rationalizing coal-fired power exports - that its coal-fired power generation technology has world-leading efficiency - at the same time there are significant business opportunities related to development of renewable energies and power grid construction in Southeast Asia.

(4) Both the MOE Committee and the METI Report state that a large number of Japanese companies are proactively engaging in expansion of renewable energies and related businesses.

(5) In order to contribute to the fight against global climate change and to advance the country’s business opportunities, the time has come for Japan to review its infrastructure export policy, completely ceasing its coal-fired power export and instead supporting renewable energy-related business.

External Links

  • JCI 気候変動イニシアティブ
  • 自然エネルギーで豊かな日本を創ろう!アクション
  • irelp
  • 全球能源互联网发展合作组织

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