Rise of Japanese nuclear energy to squeeze Aussie coal exports

THE longer term growth prospects for Australian thermal coal exports to Japan may be limited as the country reinvigorates its nuclear energy program, according to research by NAB.
Rise of Japanese nuclear energy to squeeze Aussie coal exports Rise of Japanese nuclear energy to squeeze Aussie coal exports Rise of Japanese nuclear energy to squeeze Aussie coal exports Rise of Japanese nuclear energy to squeeze Aussie coal exports Rise of Japanese nuclear energy to squeeze Aussie coal exports

 

Lou Caruana

Despite the growth in demand from other Asian markets over the past decade, Japan remains the major market for Australian thermal coal exports – accounting for around 40% of all exports in the 12 months to August 2015 – however longer term growth prospects appeared limited, NAB said.

“In June 2015, Japan’s Ministry of Economy, Trade and Industry released a new energy plan for 2030. Reflecting the competing priorities of security, cost and the environment, the plan spreads electricity generation across a range of sources – with LNG at 27% of the fuel mix, coal at 26%, renewables between 22-24% and nuclear between 20-22%,” according to the NAB report.

“According to the Industry Minister, this plan would require at least 35 operating nuclear reactors. Although Japan has 43 at present, a typical lifespan of 40 years would reduce this number to 23 by 2030 – indicating either a significant construction program or an extension to the lifespans of existing capacity (something the Nuclear Regulation Authority is currently considering).”

The Australian Department of Industry, Innovation and Science forecast a fall in the volume of Japanese thermal coal imports in the period to 2020.

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