Japan’s power sector gets gas boost as coal fades
Japan's power sector is accelerating the phasing out of inefficient coal-fired plants to help reduce the country's greenhouse gas emissions. But LNG-based gas-fired generation capacity is forecast to increase, at least over the next decade.
Availability of coal-fired capacity will fall to 49.95GW in the April 2033-March 2034 fiscal year, down by 4pc, or 2.26GW, from 2023-24, according to an annual survey by nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. The latest outlook is more aggressive compared with the previous year's survey that showed the addition of coal-fired capacity by 290MW to 50.94GW during the 10 years to 2032-33.
No more new coal-fired power units are scheduled to be installed by 2033-34, after the 650MW Yokosuka No.1 and No.2 and the 500MW Saijo No.1 units began commercial operations in 2023. This suggests Japan's coal demand for power generation will fall further from the 102mn t consumed in 2023, based on government data.
But gas-fired capacity in 2033-34 is predicted to increase by 5pc, or 4.12GW, from 2023-24 to 83.54GW. The power sector is planning to start up 13 new gas-fired units with a combined capacity of 6.414GW during the period, while scrapping 2.295GW. Japanese power producers used 37.17mn t of LNG in 2023.
The addition of gas-fired capacity will help increase Japan's overall thermal power capacity to 149.46GW in 2033-34, up by 660MW from 2023-24, offsetting falls in coal- and oil-fired capacity. Oil-fired capacity is expected to drop by 1.19GW to 15.98GW during the period.
But thermal capacity in 2033-34 could be well below Japan's renewable power generation capacity, which is predicted to increase to 178.03GW by then, up by 29pc or 40.5GW from 2023-24. Renewables include hydroelectric, wind, solar, geothermal, biomass, waste and storage battery power sources. The power sector is boosting renewables capacity, especially solar and wind, up by 25.9GW to 100.55GW and by 12.36GW to 17.98GW respectively over the next decade.
Japan's overall power generation capacity is predicted to be 361.16GW in 2033-34, assuming 33.08GW of nuclear capacity will be available. This could meet expected peak demand of 161GW in the same year, up by 3GW from 2024-25. The firm power demand will be supported by Tokyo's digital push, although a falling population and further energy saving efforts will erode electricity consumption.
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Australia’s Ichthys LNG to restart liquefaction train
Australia’s Ichthys LNG to restart liquefaction train
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Australia’s Empire Energy signs deal to sell gas to NT
Australia’s Empire Energy signs deal to sell gas to NT
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South Africa adopts climate change law
South Africa adopts climate change law
Cape Town, 25 July (Argus) — South Africa's president Cyril Ramaphosa has signed into law the country's climate change bill, which sets out a national response to climate change for the first time. The new climate change act will enable the orderly reduction of greenhouse gas (GHG) emissions through the implementation of sectoral emission targets towards South Africa's commitment to reach net zero by 2050. Currently, the country is the 15th largest GHG emitter in the world, according to the World Resources Institute. The law provides policy guidelines to ensure South Africa reaches its nationally determined contribution (NDC) under the Paris climate agreement by assigning individual enterprises carbon budgets and facilitating public disclosure of their progress. In its updated 2021 NDC, the country has undertaken to cut its GHG emissions to 350mn-420mn t of CO2 equivalent (CO2e), equivalent to 19-32pc below 2010 levels, by 2030. The lower end of this range is in line with the Paris Agreement's 1.5°C global warming threshold. To meet this, South Africa will have to achieve a steep decline in coal-fired electricity generation. A carbon tax is seen as a vital component of the country's mitigation strategy, according to the president. "By internalising the cost of carbon emissions, carbon tax incentivises companies to reduce their carbon footprint and invest in cleaner technologies, and also generates revenue for climate initiatives," Ramaphosa said. South Africa's carbon tax was introduced in a phased approach in June 2019 at a rate of 120 rands/t ($7/t) of CO2 equivalent (CO2e) and increased to R134/t of CO2e by the end of 2022. But tax-free allowances for energy-intensive sectors such as mining, and iron and steel, along with state-owned utility Eskom's exemption, implied an initial effective carbon tax rate as low as R6-48/t of CO2e. South Africa's National Treasury is targeting an increase to $30/t of CO2e by 2030. But the extension of phase one from the end of 2022 to the end of 2025, together with an uncertain future price trajectory and lack of clarity on future exemptions, means the effective carbon tax rate is likely to remain well below the IMF's recommended $50/t of CO2e by 2030 for emerging markets. The new climate change act seeks to align South Africa's climate change policies and strengthen co-ordination between different departments to ensure the country's transition to a low-carbon and climate-resilient economy is not constrained by any policy contradictions. It outlines South Africa's planned mitigation and adaptation actions aimed at cutting GHG emissions over time, while reducing the risk of job losses and promoting new employment opportunities in the emerging green economy. The law also places a legal obligation on provinces and municipalities to ensure climate change risks and associated vulnerabilities are acted upon, while providing mechanisms for national government to offer additional financial support for these efforts. The new act formally establishes the Presidential Climate Commission (PCC) as a statutory body tasked with providing advice on the country's climate change response. Among other things, the PCC is developing proposals for a just transition financing mechanism, for which a platform will be launched in the next few months. Over the last three years, South Africa has seen an increase in extreme weather events often with disastrous consequences for poor communities and vulnerable groups. To address the substantial gap between available disaster funds and the cost of disaster response, the government announced in February that it would establish a climate change response fund. At the time of the announcement, Ramaphosa reiterated that South Africa would undertake its just energy transition "at a pace, scale and cost that our country can afford and in a manner that ensures energy security". Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-Australia’s Coronado to lift coal sales
US-Australia’s Coronado to lift coal sales
Sydney, 25 July (Argus) — US-Australian coal producer Coronado Coal will boost coal sales during July-December despite logistical challenges, as it maintains its output guidance of 16.4mn-17.2mn t for 2024. The firm sold 7.8mn t of coal during January-June, leaving it a target of 8.6mn t for July-December to meet the bottom of its 2024 guidance . It has maintained this guidance despite warning that shipments from its Australian Curragh mine will be affected by a two-week rail disruption from the end of July . Coronado operates the Curragh mine in Queensland and two mining complexes in the US' Virginia. All produce coking and thermal coal. Coronado's revenues were supported during April-June compared with January-March by a smaller discount for pulverised injection coal (PCI) against hard coking coal prices, which saw the PCI price rise while other metallurgical coal prices were under pressure. Its sales prices will remain strong in July-September, forecasts chief executive Douglas Thompson, on restocking in India and the rail disruption in Queensland, as well as the fire at Anglo American's Grosvenor mine that will disrupt Australian exports. Thompson warned that there was some downside risk of $5-10/t to Australian PCI pricing but if this was realised it will see China restart buying from Australia. In the long term he expects more competition from Russia-origin PCI, as Russian coal producers find new routes to the seaborne market and regain market share lost because of an European embargo. The premium for premium hard coal prices over PCI coal prices has shrunk to around $30/t from $145/t over the past six months. Argus last assessed the premium hard low-volatile price at $224/t fob Australia on 24 July and the PCI low-volatile price at $193.65/t. Coronado's group sales volumes were up 8.3pc to 4.1mn t in April-June compared with January-March , reflecting higher sales from its Australian and US operations. The increase in volumes combined with reduced need to remove waste materials allowed Coronado to cut is mining costs by 27.5pc from the previous quarter to an average of $91.10/t of coal sold. The firm expects costs to fall further in July-December as it demobilises more of its mining fleet at its Curragh mine. This reflects reduced waste removal and should have no impact of coal production at Curragh, Thompson said. Production at Curragh should increase in the second half of 2024, with 100,000t of coal production deferred from June to July because of heavy rainfall. By Jo Clarke Coronado Coal (mn t) Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 Jan-Jun '24 Jan-Jun '23 Sales (mn t) Australia (Curragh) 2.7 2.5 2.5 5.2 4.7 US 1.4 1.2 1.5 2.6 3.0 Total 4.1 3.7 4.0 7.8 7.6 Sales data % coking coal of total sales 81.0 78.7 76.0 79.9 75.3 Australian realised met coal price (fob) ($/t) 216.2 225.2 237.7 220.5 239.7 US realised met coal price (for) ($/t) 161.7 170.9 196.0 166.0 215.5 Source: Coronado Australian coal price comparisons ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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