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Japan remains focused on restarting nuclear reactors

  • Spanish Market: Coal, Electricity, Emissions, Natural gas
  • 25/10/21

Japan will continue to focus on restarting nuclear reactors instead of building new reactors. This may complicate the country's target to realise carbon neutrality by 2050, as it will have little nuclear output by then without new construction.

Japanese premier Fumio Kishida and cabinet ministers on 22 October endorsed a basic energy policy that did not lay out any plans for construction or replacement of nuclear reactors and only focused on the restart of safe reactors. The government did not modify prospects for the nuclear sector from the draft plan that was made in July, despite requests from industry groups such as power and steel to allow new building and replacement, to ensure energy security and reduction of greenhouse gas (GHG) emissions.

Japan typically reviews the country's basic energy policy every three years. The trade and industry ministry (Meti) started discussion on the latest revisions in October last year, forming a key part of efforts to update its April 2030-March 2031 goal to reduce GHG emissions by 46pc from 2013-14 levels and to achieve carbon neutrality by 2050. The cabinet adopted the policy in time for the COP 26 climate change conference that takes place in Glasgow on 31 October-12 November.

Under the latest energy policy, Japan plans to generate 20-22pc of power output from nuclear energy, with 36-38pc from renewables, 41pc thermal power and 1pc from hydrogen and ammonia in 2030-31, which were also unchanged from the draft plans.

The Federation of Electric Power Companies of Japan, a group of major power utilities, expressed regret over the latest energy policy that does not mention new building and replacement of reactors. But it also said the new policy is meaningful, as it still includes a description to continue using necessary nuclear capacity.

Kishida, who named a new cabinet on 4 October, has adopted a positive stance towards the nuclear industry, favouring restarting safe reactors and considering replacing ageing ones. But Kishida also had said the cabinet would review public comments before approving the draft policy.

The government has well reviewed public hearings that was carried out from 3 September-4 October, which included both positive and negative opinions against nuclear energy, an official at Meti said. The current priority is to earn public understanding by restarting safe reactors, the official added.

But Japan will phase out nuclear reactors without any capacity additions. Under the current nuclear safety rules, all reactors are allowed to operate for 40 years with a one-time option to extend their lifespan to 60 years. This suggests that 15 of the existing 33 reactors with a combined capacity of 14,057MW will close by December 2030 and there will be no operational reactors in 2050, assuming a 40-year lifespan.

The future of the nuclear industry also depends on which political party will take majority seats in the 31 October lower house parliamentary election, as most parties have pledged a no-nuclear society. The current ruling liberal democratic party of Japan promotes the restart of safe reactors, without directly prohibiting building reactors. But the second largest the constitutional democratic party has pledged not to allow any new building of reactors in its manifesto.


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06/05/25

Australia's AGL to expand Kwinana power station

Australia's AGL to expand Kwinana power station

Sydney, 6 May (Argus) — Australian utility AGL will expand the capacity of its gas-fired Kwinana swift power station (KSPS) in Western Australia (WA) by 250 MW by 2029, according to plans submitted to WA's Environmental Protection Authority (EPA) on 2 May. AGL plans to construct a second stage of KSPS called K2. K2 will increase capacity to 370 MW from 120 MW currently, with up to four new gas-powered turbine units at the Kwinana site 40km south of Perth. Construction of the gas peaker is set to begin in 2026, and the power station will be operational from 2029. The new generators will run until 2058, according to AGL's project report. K2 will connect to the Southwest Interconnected System (SWIS) south of Perth and aims to support AGL and WA's transition to renewable energy. AGL aims to deliver 5.4 GW of renewable capacity by the end of 2030 and 12 GW by 2036, 300 MW of which has been completed through the Torrens Island battery and Broken Hill battery. Upper estimates of fuel supply are around 50 TJ/d (1.3mn m³/d), depending on operating hours, according to AGL. AGL did not disclose gas and diesel supply. AGL expects scope 1 CO2 emissions to be 5.8mn t over the project's life, while scope 3 emissions will reach 688,000t by 2058, according to the project application. Yearly emissions will decrease to meet WA's 2050 net zero target. AGL's submission came just days before Australia's Labor party was re-elected , reinforcing a focus on renewable energy. The WA government in 2023 announced further investment of A$2.8bn ($1.8bn) for its transition to renewable energy, which includes funding for large scale battery storage systems in Collie and Kwinana. WA's gas consumption is predicted to overtake supply from 2028, according to the Australian Energy Market Operator's (Aemo) 2024 outlook. New gas projects including the Scarborough energy project , the West Erregulla project , the Lockyer Gas project and the Waitsia stage two project will meet demand in 2027 but there is long-term uncertainty as the state transitions to renewable energy. Aemo introduced a WA reform program in 2023 including an energy transition strategy. This transition includes closing down state-owned coal-fired power stations by 2030, which currently account for 30pc of the grid supply in southwest WA. By Susannah Cornford Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's Labor win may aid low-carbon Fe, Al sectors


05/05/25
05/05/25

Australia's Labor win may aid low-carbon Fe, Al sectors

Sydney, 5 May (Argus) — The Australian Labor party's victory in the country's 3 May parliamentary election could support low-carbon iron and aluminium developers, providing policy clarity and public capital to the sectors. Labor's victory provides more certainty around Australia's A$14bn ($9.06bn) green hydrogen subsidy scheme, which will help steel producers transition towards hydrogen-powered steel furnaces. The opposition Coalition during the election pledged to scrap the programme, which will allow producers to claim A$2/t of green hydrogen produced from 2027. Australian steelmaker NeoSmelt and South Korean steelmaker Posco are developing electric iron smelters in Western Australia (WA) that produce hot-briquetted iron, which is used in the green steel process. Both projects will initially rely on natural gas but may transition to hydrogen-based processing as hydrogen production rises. Australia's hydrogen tax credits may prove crucial given ongoing hydrogen production challenges. South Australia's state government closed its Office of Hydrogen Power SA on 2 May, following a funding cut earlier this year. Labor can now also move forward with plans for A$2bn in low-emissions aluminium production credits, beginning in 2028-29. Smelters will be able to claim credits per tonne of low-carbon aluminium produced, based on their Scope 2 emission reductions. The party's proposal does not include any blanket credit for producers. Labor's aluminium production credits are aimed at supporting the Australian government's goal of doubling the country's share of renewable power from about 40pc to 82pc by 2030. Australian producers export about 1.5mn t/yr of aluminium, according to industry body Australian Aluminium Council, from four smelters located around the country. Green iron funding Labor's election win also secures its A$1bn lower-emission iron support pledge , first announced in late February. Half of the fund will go towards restarting and transitioning the 1.2mn t/yr Whyalla steelworks in South Australia into a green steel plant. The other half will support new and existing green iron and steel projects to overcome initial funding barriers. Labor has not allocated any funding through the programme yet. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia’s election gives LNG, fuels sector certainty


05/05/25
05/05/25

Australia’s election gives LNG, fuels sector certainty

Sydney, 5 May (Argus) — Australia's governing Labor party's second majority term could mean that changes to the offshore permitting regime promised last year are signed into law, while east coast LNG businesses will avoid a planned reservation system proposed by the opposition. Labor's victory at the 3 May election combined with the election of fewer members from the Greens party and climate-focused independents, could mean it faces less pressure to cancel fossil fuel projects. But it will remain reliant on the Greens to pass laws through the nation's upper house — the senate — meaning Labor may need to negotiate the passage of bills with the leftist party if the Liberal-National-based coalition opposes its measures. The Greens ran on a promise to ban new coal, oil and gas projects but won fewer seats than in 2022 because of preference flows. A federal decision on the lifetime extension of the Woodside Energy-operated 14.4mn t/yr North West Shelf (NWS) LNG delayed by Labor, is now looking more positive for the firm. The firm sees approval as vital to progressing its Browse gas development offshore northwestern Australia. Voters' rejection of the opposition Coalition on the nation's east coast means its policy to reserve a further 50-100PJ (1.34bn-2.68bn m³/yr) from the Gladstone-based LNG exporters will not proceed. The result provides an opportunity for certainty and stability for the energy sector, upstream lobby Australian Energy Producers said. The group urged the government to focus on new supply as Australia's gas reserves for domestic use rapidly deplete. The government will need to specify exactly how it aims to secure supplies to ensure stable supply, once coal-fired generators retire at the end of the 2020s and into the 2030s. This is because the nation's integrated system plan is based on Labor's policy of reaching 82pc renewable energy in the power grid, backed up by about 15GW of gas-fired power. Industry will await further direction stemming from the Future Gas Strategy which canvassed solutions to Australia's declining gas supply including new pipelines, storage and seasonal LNG imports. Permitting concerns In the government's previous three-year term, a series of court-ordered requirements to consult with affected Aboriginal groups briefly disrupted multi-billion dollar LNG developments. Labor promised to specify through new laws exactly which groups must be consulted before approvals could be granted. But these were dropped from the agenda in early 2024 following opposition by the Greens. Labor's resources minister Madeleine King blamed the Greens for obstructionist manoeuvres on this legislation, but it remains unclear if and when Labor might introduce such laws. Conversely, the Coalition promised to end government support for anti-gas lobbies such as law group the Environmental Defenders Office — set to continue under Labor. In liquid fuels, Labor's victory should boost Australia's electric vehicle (EV) sales, with emissions standards laws set to remain enforced. The Coalition had said it would soften the laws because of concern over cost of living pressures. Plans to temporarily cut the fuel excise will also not progress. Australia's EV take-up has stalled, and industry has blamed this on poor investment in recharging infrastructure and other policy settings, including the removal of the fringe benefits tax exemption for plug-in hybrid car models. A re-elected Labor government is likely to further policy towards a mandate for sustainable aviation fuel or renewable diesel, given the growing share of Australia's emissions projected to come from the transport industry. It pledged A$250mn ($162mn) for low-carbon liquid fuels development in March , for low-carbon liquid fuels development in March, as part of its commitment to the nascent sector. Local market participants are optimistic that further biofuels support will be provided as urgency to meet net zero ambitions builds, including a 2030 target of 43pc lower emissions based on 2005 levels. About A$6bn/yr of feedstocks like canola, tallow and used cooking oil are exported from Australia, while existing ethanol and biodiesel producers are running underutilised plants, making about 175mn litres/yr at present, because of poorly-enforced blending mandates. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia re-elects renewable-focused Labor party


05/05/25
05/05/25

Australia re-elects renewable-focused Labor party

Sydney, 5 May (Argus) — Australia's Labor party has been voted in for another term in a landslide majority, reaffirming the party's targets on renewable energy and emissions reduction. The election held on 3 May saw overwhelming support for the incumbent Labor government led by prime minister Anthony Albanese, which prioritised renewable energy, compared to the opposition's plans to install nuclear plants to replace coal-fired power . Labor now face pressure to meet key energy policy targets, including 82pc renewable energy in electricity grids by 2030 and a 43pc reduction in greenhouse gas emissions on 2005 levels by 2030. The government said late last year that Australia was on track to reduce emissions by 42.6pc by 2030 , nearly within the target and rising from previous estimates of 37pc in 2023 and 32pc in 2022. This was mostly because of the reformed safeguard mechanism , the expanded Capacity Investment Scheme (CIS) and the fuel efficiency standards for new passenger and light commercial vehicles. Lobby groups now expect the government to set a strong 2035 emissions reduction target , within the range of 65-75pc below 2005 levels indicated last year by the Climate Change Authority (CCA). The CCA is yet to formally recommend a target, and the government will then need to make a decision and submit Australia's next Nationally Determined Contribution (NDC) under the Paris Agreement later this year. In metals, a plan to buy critical minerals from commercial projects and keep stockpiles to steady prices by withholding or releasing stock will now be pursued by the re-elected government. The previous Albanese government was not forthcoming in meeting calls for a biofuels mandate or production incentives but it announced it would allocate A$250mn ($162mn) of its A$1.7bn Future Made in Australia innovation fund to low-carbon fuels (LCLF) research and development in March. In agriculture, a planned ban on live sheep exports will go ahead by 1 May 2028 under laws passed last year. The coalition campaigned heavily to revoke the laws, but the re-election of Labor has raised concerns in the live export sector. By Grace Dudley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico bets on new contract model to lift gas output


02/05/25
02/05/25

Mexico bets on new contract model to lift gas output

Mexico City, 2 May (Argus) — Mexico's push to raise domestic gas output to 5 Bcf/d by 2030 depends on a new shared participation model designed to attract private investment, with four strategic gas fields prioritized as tenders begin. State-owned Pemex this week released the detailed guidelines for the mixed production scheme, first introduced in February. The model guarantees Pemex at least a 40pc share of production and gives the company wide discretion to set contract terms and choose the bidding process — including no-bid awards. But interest in the new contracts is expected to center on Mexican firms with close ties to President Claudia Sheinbaum's administration, such as Carlos Slim's Grupo Carso, according to market sources. "With these guidelines, Pemex can finally pick and choose who they want, how they want," said Miriam Grunstein, a former adviser to energy regulator CRE and senior partner at Brilliant Energy Consulting. "The downside is they are likely to turn to Mexican firms that lack the technical experience for complex projects, rather than international companies with the know-how for deep-water or unconventional plays," Grunstein said. "This scheme isn't made for companies like BHP, Total, or Eni," added Eduardo Prud'homme, former technical director at Cenagas and co-partner at consultancy Gadex. "Pemex doesn't want operators as partners. Though it is perfect for Carso." A relative newcomer to the upstream sector, Carso is one of the government's most important contractors for infrastructure projects and stands to gain on future business whether or not the upstream partnerships succeed. Prud'homme doubts international majors looking for a one-off deal would be willing to take on the heavily regulated, high-risk projects when the maximum stake is 60pc. "If you fail, Pemex will not share the loss," said Prud'homme. "If you succeed, Pemex decides how much to share." Pemex management said it plans to launch 17 projects under the new scheme this year. It remains unclear how many of these will focus on gas development. Still, gas is a core focus. Pemex's 2025–2030 business plan allocates Ps238bn (US$12.1bn) to gas projects in pursuit of the 5 Bcf/d goal. Four key fields — Burgos, Quesqui, Ixachi and Bakte — are expected to provide 54pc of total projected output. Carso is already active, partnering with Pemex on the complex deep-water Lakach gas project, which is now expected to migrate from a service contract to the new mixed contract model. Slim began renegotiations in February after the model was announced. Carso has also expanded upstream, buying into the oil-rich Zama project in December. In March, Sheinbaum confirmed the government is in talks with Carso to partner on Ixachi. Turning the tide Still, gas output continues to decline. An analysis by Mexican think tank IMCO found that Pemex and its farmout partners this year posted their lowest first-quarter gas production in 15 years. In the first quarter, Pemex produced 4.408 Bcf/d of gas, down by 8pc from the same period in 2024 and 12pc lower compared with the same quarter 2023. The 367 MMcf/d annual decline marks the steepest first-quarter drop since 2018, when output fell by 536 MMcf/d year over year. On the positive side, Pemex's natural gas production in March ticked 0.3pc higher from the previous month to 4.39 Bcf/d – marking the second consecutive month of increases after February output was up 1.3pc from January. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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