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Feed-in-Tariff (FIT) for coal power?  Japan moves ahead with coal “investment” rather than “divestment”

Since the Ministry of Economy, Trade and Industry (METI) established a “Council for promoting the early realization of next generation thermal power generation” on June 16th, three meetings have already been held. The purpose of this council is to promote highly efficient coal-fired and LNG thermal power plants. The council is made up of industry, government and academic representative and supports the swift implementation of these plants. It aims to discuss measures for the early development and deployment of such technology,and draw up a roadmap for its development and acceleration in both the public and private sectors.

 The council members seem to recognize the worldwide trend of “decarbonization”, but…

The worldwide trend of decarbonization was discussed in the first meeting. US President Obama’s Climate Action Plan was mentioned, which includes restricting new coal power plant facilities to those with CCS (carbon capture and sequestration) technology, ending public financing for overseas coal projects, and calling on governments and multilateral development banks to quickly join in their efforts to end public coal financing.

Also mentioned at the meeting was a statement made by a major European oil company at the World Gas Conference that coal is a pollutant that is detrimental in our efforts to protect the environment and that it’s essential to switch from coal to gas. The company also commented that governments should drive up the cost of coal fuels through measures such as a carbon tax.

However, at the council’s meeting, such global trends were simply regarded as “an unfavorable trend towards coal” and members showed no sign of wavering from their position. The council’s discussion completely disregarded the world’s decarbonization trend and the reasons behind it, and continued with their plan to promote coal.

Even efficient “next generation” thermal plants will lead to further CO2 emissions

So what is the significance of these next-generation thermal plants? Looking at coal-fired thermal power, there are several types of technologies, such as Advanced-USC (A-USC), Integrated coal Gasification Combined Cycle (IGCC), and Integrated coal Gasification Fuel Cell combined cycle (IGFC). The Japanese government plans to put A-USC and IGCC technology into practice by the 2020s and IGFC technology by the 2030s. In the document distributed at the council meeting, it was said that CO2 emissions from power plants with A-USC, IGCC and IGFC technology could potentially emit 710g/kWh, 650g/kWh and 590g/kWh, respectively. Compared with the most advanced USC plant currently in operation, which emits 820g/kWh, this newer technology could emit less CO2 but the difference is miniscule. LNG power plants were also subject to discussion by the council. Current LNG plants operating with Gas Turbine Combined Cycle (GTCC) technology emit approximately 340g/kWh of CO2. Even now, plants with GTCC technology emit less than half of the emissions of highly efficient coal power plants. However, new power plants fitted with the soon-to-be-developed Ultra High Temperature Gas Turbine Combined Cycle, which will emit approximately 301g/kWh, or Gas Turbine Fuel Cell Combined Cycle (GTFC) (280g/kWh). It is obvious just by looking at the documents from the meeting that emissions from new coal plants fitted with this new technology will have much higher emissions (see the link below for more information).

Targets are 5 years ahead of original projection, “incentives are needed”

At the 3rd council meeting, policies were presented for the aim to develop plans for adopting A-USC technology by 2016, IGCC by 2018 and IGFC by 2025. These targets are 5 years ahead of schedule. Shozo Kaneko from the University of Tokyo (Professor and Deputy Director of the Collaborative Research Center for Energy Engineering) made a surprising comment in regards to this. He proposed that it is necessary for the government to quickly evaluate the efforts of highly motivated people that challenge highly efficient coal-fired power generation and give them adequate incentives. According to Professor Kaneko, such support is absolutely necessary under the circumstances of electricity deregulation. He also said that in order to compensate the efforts, the council should consider setting a Feed in Tariff for coal power or use revenue from the environmental tax on the scale of 3 billion yen annually. In essence, Professor Kaneko urged that the government should offer a “premium” to coal power industries.

Professor Kaneko’s remarks only sparked comments from industry representatives who voiced requests for subsidies and low-interest monetary policies for public funds.

Meanwhile around the world, the trend of divesting is gaining steam. Many countries have been ending or withdrawing funds from coal power generation projects. Despite this global movement away from coal, the argument around coal in Japan is the complete opposite of “investment”, such as “FIT for coal” or “tax revenue for coal”. It seems like we have been transported back to the dark ages.

On July 17th, the fourth meeting will be held to make a concrete energy plan. We sincerely hope the council will not embarrass the Japanese public by establishing a FIT system for coal power.

 

Reference

Council for promoting the early realization of future thermal power generation meeting document (in Japanese)
Professor Kaneko’s remarks (Professor’s info in English, remarks (PDF) in Japanese)