Coal Continues as Key Part of Japan’s Energy Mix

Japan’s energy mix is in flux as the country slowly brings idled nuclear reactors online. The 2011 Fukushima disaster upended the nation’s power generation, resulting in more reliance on coal and natural gas, both fuels needing to be imported at a substantial cost. The country is adding more renewable energy resources, including offshore wind, but the buildout of solar farms and onshore wind has been limited by the country’s lack of land suitable for construction, along with a regulatory system that has been slow to support renewables.

Nuclear power from about 50 operating reactors supplied about one-third of Japan’s electricity before the nuclear sector was shut down after Fukushima. Coal-fired power generation has grown in importance, even as Japan has a target of having renewable energy account for more than a third of its power generation by 2030 and a goal to achieve carbon neutrality by 2050. According to Statista, Japan as of late last year had 93 coal-fired power plants. Government data shows coal supplies about one-third of the nation’s electricity, second only to the roughly 34% supplied by gas-fired power stations. Nuclear power’s share of generation has dropped below 10%, according to the International Atomic Energy Agency.

Japanese officials have said the country will no longer build what it calls “unabated coal-fired power plants,” or those without advanced emissions technology, joining with other Group of Seven (G7) developed nations in a pledge to move away from coal-based generation from facilities without advancements to support lower emissions, such as carbon capture and storage. “In line with its pathway to net zero, Japan will end new construction of domestic unabated coal power plants, while securing a stable energy supply,” Prime Minister Fumio Kishida said in early December while speaking at the United Nations Climate Change Conference (COP28) in Dubai, United Arab Emirates. Kishida said such decisions from other nations “should be addressed by each country in the course of the respective pathways to net zero, reflecting national circumstances.” Officials said the pledge not to build new plants does not affect units already under construction. Kishida in his address at COP28 said the country is progressing toward its goal of cutting greenhouse gas (GHG) emissions by 46% by 2030, and he said Japan would like to cut GHG output by at least half this decade.

1. JERA, a major Japanese utility, brought the coal-fired 650-MW Yokosuka Thermal Power Station Unit 2 online in December 2023. Unit 2 is a high-efficiency power station using ultrasupercritical technology. Courtesy: JERA

Two new coal-fired plants entered operation in 2023, and another was expected to come online near Tokyo in February, according to JERA, a major Japanese utility. JERA in December said it had brought the 650-MW Yokosuka Thermal Power Station Unit 2 online (Figure 1), joining the similar Unit 1 at the site. The first Yokosuka unit entered commercial operation in June of last year. Unit 2 is a high-efficiency coal-fired power station that uses an ultrasupercritical (USC) power generation system. JERA has said it “will continue to move steadily forward in replacing aging equipment with state-of-the-art power stations as it works to contribute to a stable electricity supply and reduce CO ₂ emissions.” Kishida said government officials are not aware of any current plans for new coal-fired units.

Japanese companies such as Sumitomo Corp. and Toshiba have said they will not support new coal-fired generation, and some Japanese-backed banks also have said they no longer will finance coal projects. Japan’s Electric Power Development company, known as J-Power, recently said it will close two 500-MW units at its Matsushima power station in southern Japan. J-Power, Japan’s second-largest coal-fired power generator after JERA, said Unit 1 at Matsushima will close by the end of March 2025, and operations will be suspended at Unit 2. The company said it plans to restart Unit 2 in 2028, but only after it builds a gasification facility at the site to support more efficiency and lower emissions. J-Power also has said it will reduce generation capacity at some of its other coal-fired units and upgrade facilities with advanced emissions reduction technology.

Sankar Sharma, an investment expert and founder of RiskRewardReturn.com, told POWER, “In its quest for net-zero emissions, Japan, like many other Asian countries, faces a paradoxical situation: despite its commitment to environmental goals, the nation continues to depend heavily on coal-fired electricity generation, even adding new units to its energy portfolio. This scenario is emblematic of a broader global dilemma where the choice between energy security and sustainable energy alternatives becomes increasingly complex.”

Said Sharma, “Coal remains a cornerstone in Japan’s energy landscape due to its cost-effectiveness and reliability compared to other energy sources. Despite its environmental drawbacks, coal is seen as a vital component in ensuring Japan’s energy security, especially when considering the challenges and costs associated with transitioning to green energy sources like wind and solar. Currently, it is not easy to transport wind or solar, and nuclear energy takes time and a huge investment.”

A continued dependence on coal, along with natural gas, has economic consequences for Japan. “Japan has few or no natural resources of its own so it is highly dependent on imports,” said Irina Tsukerman, a geopolitical analyst and president of Scarab Rising, an analytics group. “Coal is needed for electricity production … and Japan therefore has to import nearly 100% of its coal from other countries.” Tsukerman noted, “Despite committing to decarbonization by 2050, Japan has been heavily invested into a coal-based energy approach both at home and abroad, and has not only built new coal-based plants domestically this year but has been one of the top major financiers of coal-based power plants abroad, in some cases, the leading financier of such projects.” The country has pledged to end funding for some international projects, including in Indonesia. Tsukerman told POWER that Japan’s “entire infrastructure and financial operations are so heavily tied to coal that changing course is extremely difficult. And another issue is that it has been trying to wean itself off oil and gas as per international pressure, but the alternative for renewable energy production is coal!”

Sanjay Purswani, a senior analyst with Boston Consulting Group, said, “Post-Fukushima, Japan experienced a significant pause in nuclear power generation. The gradual return of nuclear plants, once a major part of the country’s energy mix, has resulted in a reliance on natural gas, highlighting Japan’s dependence on imported fossil fuels. In 2019, Japan’s self-sufficiency ratio was around 12%, underscoring the vulnerability to the volatile LNG [liquefied natural gas] market. Currently, coal contributes about 30% to Japan’s power mix. Despite the goal to reduce CO₂ emissions, coal remains a key player due to its affordability in providing baseload power. Coal power plants account for less than one-third of the electricity emissions, positioning it as a primary focus in Japan’s decarbonization efforts.”

Purswani told POWER, “Japan’s coal power plants incorporate a range of technologies: 47% are ultrasupercritical, 28% supercritical, and 23% subcritical, [according to the International Energy Agency]. Notably, the upcoming coal power plants are predominantly ultrasupercritical units, marking a move toward higher efficiency and reduced emissions. The Japanese government has announced plans to close down supercritical and subcritical power plants by 2030. Japan’s leading five power producers have pledged significant decarbonization targets by 2030, aiming for a 20%–65% reduction from 2013 levels, and a net-zero goal by 2050. These players have announced many pilot projects trying different solutions on these coal power plants.

“Among various solutions for achieving these targets, low-carbon ammonia is gaining traction for decarbonizing coal power generation. It offers a simpler alternative to coal-to-gas conversions, requiring minimal retrofits for blending small ammonia percentages, a strategy encouraged by the Japanese government. Co-firing with up to 20% ammonia is cost-effective, with potential future adaptations allowing higher ammonia blends for fully low-carbon ammonia-powered plants,” said Purswani.

Purswani continued: “Japan’s commitment to these [decarbonization] goals is evident in its proposed $113 billion investment, a collaboration of public and private funds for hydrogen and ammonia technologies. This includes Contracts for Difference (CfD) subsidies covering the cost difference between coal and ammonia over 15 to 20 years for qualifying projects. However, the feasibility and cost-effectiveness of large-scale ammonia co-firing remain subjects of ongoing evaluation. Additionally, some power producers are exploring carbon capture technologies for coal plants. Given Japan’s limited CO₂ storage capabilities, this approach might involve expensive transportation of captured CO₂ to other countries. Furthermore, gasification is being considered at a few coal power plants in Japan, although its scope might be constrained by the availability of biomass feedstock.”

Sharma told POWER that Japan will continue to rely on coal-fired power as “a practical solution to immediate energy needs,” but noted that “the environmental impact cannot be overlooked. The continued use of coal poses significant environmental challenges, and Japan must balance these against its energy requirements. In response, Japan is implementing various environmental policies, such as stricter emissions standards for coal plants and investment in carbon capture technologies, to mitigate the impact of its coal reliance.”

Sharma said that the measures taken by Japan’s government to ensure the country’s energy supply will be impacted by what happens in other countries. “The future of coal-fired power in Japan, therefore, hinges on a delicate balance between advancing green technology, adapting to global energy market dynamics, and responding to environmental imperatives,” Sharma said. “Considering the current geopolitical tensions, elections in 40 nations, the anticipated global slowdown this year, and the pace of natural calamities, one should conclude it is going to be a few years before we see the shift [away from coal]. The acceleration of innovation could help Japan shorten the transition. In summary, Japan’s reliance on coal-fired power, in the context of its net-zero goals, reflects a multifaceted challenge. Balancing energy security with environmental commitments, economic considerations, and technological advancements defines Japan’s current energy strategy and will shape its energy future.”

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).