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Japan’s coal imports forecast to withstand nuclear revival

Japan's coal imports for power generation are unlikely to decline even if the country's nuclear plants return online as planned, according to Banchero Costa.

A recent report from the Genoa-based ship agency predicts that pollution-cutting technologies could even help coal squeeze out other fossil fuels.

"As nuclear plants are reactivated, cost pressures are especially likely to affect fuel oil use, the most expensive mode of power generation, but could also lead to a decline in the use on natural gas," said Banchero Costa.

"Coal demand, surprisingly, could prove more resilient."

After Indian and China, Japan is the world's third biggest coal importer, importing 188 million tonnes last year, mainly from Australia.

Nuclear plants provided as much as 29% of Japan's energy before the Fukushima disaster in 2011 triggered the shutdown of all the country's reactors. Natural gas's contribution to the national energy mix then rose from 30% in 2010 to 47% in 2014, while coal's slice swelled from 25% up to 31%.

While coal-fired generation is seen as twice as carbon intensive as using natural gas, Banchero Costa noted that Japan now has technologies to reduce its polluting effects.

"Japan in fact actively promotes exports of its modern coal plant technology, such as the ultra-supercritical Isogo plant, throughout Asia," said the agency.

"Price competition between established power firms and new entrants to the market, which is expected to intensify as the country moves towards retail power market deregulation, may also drive the industry more towards coal-fired plants."

Although Japan's coal-fired plants are now running near capacity, as many as 48 new ones with a combined capacity of 23.5 GW are planned, according to a recent report in the Japan Times.

Despite Japan's anti-nuclear attitudes, the Abe administration plans for nuclear power to account for 20-22% of Japan's electricity by 2030, with coal providing 26% and natural gas 27%.

source: http://www.ihsmaritime360.com