The Carbon Tracker Initiative report sees LCOEs of offshore wind, utility-scale solar PV and onshore wind becoming cheaper than the LCOE of coal by 2022, 2023 and 2025 respectively, independent of an additional carbon price or more stringent air pollution regulations. (Source: Carbon Tracker Analysis)
- Japan’s coal power capacity, planned and existing, could be under threat from cheaper renewables as solar PV and wind power as early as 2022, according to a report
- The country could have $71 billion of coal power assets stranded if the government doesn’t make policy course correction now
- It claims the LCOE of renewable energy in Japan could be lower than the LCOE of coal by 2022
- Suggestions from the report authors include looking at devising a retirement schedule for the existing coal fleet, and expanding renewable energy and supportive technologies through non-discriminatory regulations
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Under its Strategic Energy Plan (SEP) the Japanese government aims for renewables to become the main source of power in the country by 2050. The government is also committed to bring down its carbon emissions from thermal power generation. However, the ambitions are by far not sufficient. According to the Carbon Tracker Initiative, with new renewables becoming cheaper than new coal by 2022 and existing coal by 2025, the economic viability of new and existing coal in Japan could be severely undermined.
Without policy reform this could leave $71 billion worth of coal power generation assets stranded which could result into consumers paying for these through higher power prices.
As of September 20, 2019, Carbon Tracker reported, Japan had more than 11 GW of coal power capacity either under construction, permitted or pre-permitted with an overnight capital cost of $29 billion. The independent financial think tank has prepared a project finance model for each of the planned and under construction coal units in Japan to assess how these assets could become unviable over time, threatened by renewables.
Written in collaboration with the Institute for Future Initiatives at the University of Tokyo and CDP, the Carbon Tracker report titled Land of the Rising Sun and Offshore Wind, claims, “Independent of an additional carbon price or more stringent air pollution regulations, the LCOE of renewable energy in Japan could be lower than the LCOE of coal by 2022. Specifically, the LCOE of offshore wind, utility-scale solar PV and onshore wind could be cheaper than the LCOE of coal by 2022, 2023 and 2025 respectively.”
Among renewables, new solar PV capacity could be cheaper than new coal plants by as early as 2023, and by 2025, new solar PV could be cheaper than operating coal plants, claims the research.
The report suggests the government should immediately reconsider planned and under construction coal power capacity and devise a retirement schedule for the existing fleet consistent with decarbonization goals under the Paris Agreement. At the same time, it recommends expanding renewable energy and supportive technologies as battery storage, demand response and high-voltage transmission through non-discriminatory regulations.
The Carbon Tracker’s Land of the Rising Sun and Offshore Wind report can be downloaded for free from its website.