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Stranded Coal Assets In Japan
Japan is facing a looming financial problem as a result of heavy investments in coal technology that may quickly become stranded assets as renewable energy sources become increasingly inexpensive.
Japan is gradually adding more ambitious policies with regard to
climate change including goals to reduce emissions and to have renewables
become the main source of power over the next three decades. But despite these policy efforts, Japan is
still investing heavily in coal power.
Japan currently has 21 new coal projects with over 11 GW of
under-construction, permitted or pre-permitted coal capacity. But these tens of billions of dollars in
assets would have to be closed prematurely in order to remain consistent with
the goals of the Paris Climate Agreement.
According to a new report by the Carbon Tracker Initiative, a
financial think tank, and the University of Tokyo, offshore wind power will be
cheaper than coal in Japan by 2022, new solar cheaper by 2023, and onshore wind
less expensive by 2025. The price of
offshore wind is already comparable to existing coal power in Japan. Japan had a total of 55.5 GW of solar
capacity last year and has the potential to reach 150 GW by 2030.
The report notes that 42% of the global coal fleet likely became
unprofitable last year and this could rise to 72% by 2040. The authors contend that building coal power
today equals high-cost power and financial liabilities tomorrow. The planned and operating coal capacity in
Japan is partially protected by regulations that give coal generators an unfair
advantage in the marketplace. Ultimately,
the stranded coal assets are likely to be passed down to consumers through
higher power prices.
**********
Web Links
Land of the Rising Sun and Offshore Wind
Photo, posted April 25, 2019, courtesy of Jen via Flickr.
Earth Wise is a production of WAMC Northeast Public Radio.
View all episodes
By Randy Simon
4.7
1515 ratings
Japan is facing a looming financial problem as a result of heavy investments in coal technology that may quickly become stranded assets as renewable energy sources become increasingly inexpensive.
Japan is gradually adding more ambitious policies with regard to
climate change including goals to reduce emissions and to have renewables
become the main source of power over the next three decades. But despite these policy efforts, Japan is
still investing heavily in coal power.
Japan currently has 21 new coal projects with over 11 GW of
under-construction, permitted or pre-permitted coal capacity. But these tens of billions of dollars in
assets would have to be closed prematurely in order to remain consistent with
the goals of the Paris Climate Agreement.
According to a new report by the Carbon Tracker Initiative, a
financial think tank, and the University of Tokyo, offshore wind power will be
cheaper than coal in Japan by 2022, new solar cheaper by 2023, and onshore wind
less expensive by 2025. The price of
offshore wind is already comparable to existing coal power in Japan. Japan had a total of 55.5 GW of solar
capacity last year and has the potential to reach 150 GW by 2030.
The report notes that 42% of the global coal fleet likely became
unprofitable last year and this could rise to 72% by 2040. The authors contend that building coal power
today equals high-cost power and financial liabilities tomorrow. The planned and operating coal capacity in
Japan is partially protected by regulations that give coal generators an unfair
advantage in the marketplace. Ultimately,
the stranded coal assets are likely to be passed down to consumers through
higher power prices.
**********
Web Links
Land of the Rising Sun and Offshore Wind
Photo, posted April 25, 2019, courtesy of Jen via Flickr.
Earth Wise is a production of WAMC Northeast Public Radio.
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