Japan's thermal power on the rise amidst PV delays

Coal imports climbed 3.4% in Q1.

The weakening availability of greener energy sources in Japan, such as solar and nuclear power, are likely to facilitate the use of coal and gas to support the baseload power requirement in the country, according to GlobalData.

Solar is the major driving force for renewable deployment in the country. However, revisions in the tariff structure and grid interconnection issues were likely to slow down deployment, and now the sector is facing a halt in construction activity.

According to Somik Das, Senior Power Analyst at GlobalData, Japan’s goals to meet the 24% renewables target is expected to experience a setback, as the onset of the pandemic has affected the shipment of photovoltaic modules and other equipment from China for many Japanese developers.

In the wake of the COVID-19 pandemic, electricity demand in Japan has dropped and the power prices have declined. These are expected to drive down wholesale electricity prices. Despite this, the abnormal weather conditions and low availability of nuclear facilities are expected to support the high consumption of coal for electricity generation.

Already, in the first three months of 2020, Japan imported 44.8 million tonnes of coal, which climbed 3.4% YoY in comparison to 43.3 million tonnes imported in Q1 2019.

Das noted that, as solar projects are obligated to meet strict deadlines to reach commercial operation, the government has released an aid to help the projects bound by power purchase agreements (PPAs). In the $1.1t stimulus package, the government has made provisions of $1b for the development of onsite renewables.