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Ministries don't agree on Japan energy future

February 12, 2013


Sparks fly over power plants / 2 ministries at odds over building new coal-fired plants

The debate over whether to promote construction of new coal-fired power plants has intensified as two ministries have taken opposing positions on the issue.

The Environment Ministry holds a negative view of the plan in light of environmental concerns, including the fact that coal emits more greenhouse gases than liquefied natural gas and other energy sources.

The Economy, Trade and Industry Ministry, on the other hand, has been promoting the plan to help offset the anticipated increase in fuel costs due to the long-term suspension of nuclear power plants.

The Environment Ministry asked METI last month to postpone a planned bid by Tokyo Electric Power Co. to purchase electricity generated by outside thermal power plant operators, and the matter is being discussed by the two ministries, sources close to the deal said.

To make up for a future power supply shortage, the utility announced in November a plan--starting from July 2019--to purchase electricity generated at thermal plants to be built by power wholesalers.

Environment Minister Nobuteru Ishihara said Tuesday after a regular Cabinet meeting that his ministry is reviewing the utility's power purchase plan from the viewpoint of curbing greenhouse gases without creating complications.

Economy, Trade and Industry Minister Toshimitsu Motegi insisted on holding the tender as planned during a news conference the same day, saying, "Coal-fired power generation has a vital role in maintaining a stable electricity supply and economic efficiency."

Coal thermal power costs about 9 yen per kilowatt-hour, compared to 22 yen per kWh for oil-fired plants and 10 yen per kWh for LNG-fired plants.

However, the amount of carbon dioxide emissions discharged by coal-fired plants is said to be double that of LNG-fired plants.

Therefore, it may be difficult to obtain approval to construct new thermal plants after undergoing an environmental impact assessment by the Environment Ministry.

Prime Minister Shinzo Abe's administration plans to review the former Democratic Party of Japan-led government's policy of reducing greenhouse gas emissions from 1990 levels by 25 percent by 2020, but has yet to set a new goal.

Since the latter half of last year, the two ministries have made efforts to coordinate their views on the construction of new coal-fired plants. But TEPCO's plan to soon start accepting bids from outside thermal power plant operators has intensified the confrontation between the two ministries.

To help compensate for power supply shortages caused by the planned decommissioning of four reactors at its Fukushima No. 1 nuclear power plant, the utility will procure the necessary 2.6 million kilowatts from outside vendors starting in 2019.

As the bid ceiling was set at 9.53 yen per kilowatt-hour, it appears that it will be difficult for power generators other than coal-fired plant operators to take part.

A plan has emerged to hammer out a compromise through discussions by deregulation and other government panels if coordination efforts between the two ministries fail.


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