Japan to oppose new or expanded coal-fired power plants in blow to Australian exports

(The Guardian, 31 Mar 2019) Australia’s top export market for thermal coal gives further signs of dramatic energy pivot to renewables.

Japan’s environment minister has announced he will “in principle” oppose any new plans to build or expand coal-fired power stations, as further signs emerge of a dramatic energy pivot by Australia’s top export market for thermal coal.

Guardian Australia reported in March that Japan had cancelled a large percentage of planned investments in coal-fired power, while Japanese investment vehicles were ditching coal projects and instead seeking to back large-scale renewable projects across Asia.

Market analysts expect the price of thermal coal will remain dictated by China, whose recent restrictions on Australian exports have already tempered near-record prices, and would likely continue to reduce its value.

A faster-than-anticipated transition by the Japanese energy sector, which buys 39% of Australian-mined thermal coal, would affect future volumes and the viability of some new mines.

The resources sector believes forecasts for slowing demand in north and east Asia will be offset by growth in demand in parts of south Asia and south-east Asia.

But the financing of new coal-fired projects in developing Asia will likely come from investment vehicles based in China, Japan and Korea, and be closely linked to domestic policy in those countries.

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The Guardian, 31 Mar 2019: Japan to oppose new or expanded coal-fired power plants in blow to Australian exports