Japan seeks some coal comfort

THE Japanese government is looking to ease its environmental assessments for coal-fired power plants, according to a Nikkei news service report.

Noel Dyson

This could be the news global coal producers have been looking for as thermal coal prices continue to languish.

Japan could prove a handy fillip to the healthy market created by China. Indeed, it was not so long ago that Japan was the thermal coal price setter. China assumed its mantle only recently.

The new environmental rules could be in place as early as next year. They are expected to spell out the environmental performance needed to pass the assessments.

The assessments themselves are expected to take less time too, said to be down to one year from the three years or so for upgrades to fossil fuel-driven plants. For construction of plants, that assessment time could be cut to two years.

Assessments for wind and geothermal plant projects will likely be sped up to 18 months.

These environmental assessments have long presented a high hurdle for businesses wanting to establish coal-fired plants in Japan.

According to Nikkei, Mitsubishi Corp abandoned a project in Fukushima Prefecture in 2010 after it failed to clear those environmental hurdles. Apparently, projected carbon dioxide from the coal burning plant would have been 50-100% greater than those from LNG plants. As such, they were deemed too high.

Indeed, Tokuyama Corp was the most recent to gain such an approval. It won its approval in 2009.

Given the power problems that have plagued Japan since the Fukushima Daiichi nuclear plant disaster last year, it is understandable the nation has turned its eyes to coal.

According to the Nikkei report, the Tokyo Electric Power company has plans to build coal-fired plants as an alternative to nuclear ones. It is expected to file for approval as early as next year under the new assessment procedures.

On an economic basis, coal still leads the way.

According to Nikkei, at 4 yen per kilowatt-hour, coal is one quarter the cost of oil-fired plants and up to half that of LNG plants.