Japan’s fossil fuel import bill stood in the region of yen (Y) 3,000 billion (E28bn), according to Ueda. "For us, LNG has been a viable alternative to nuclear power, but we need to end our reliance on imported fuels," he said. The wind development programme will eat into Japan’s annual LNG import bill and ultimately ease pressure on inflated global gas prices.
Increased demand for LNG from Japan is one of the major inflationary factors to have driven global gas prices over the past year. Energy utilities across Europe have struggled with dismal profit margins for gas-fired power generation that have led to multiple plant closures (see sister publication EDEM 23 February 2012).
Experts fear that the dire economics of gas-fired generation may ultimately threaten supply security over the next three years, particularly in the UK, Europe’s largest gas market, with coal-fired power plants being forced to close under EU legislation and electricity supply margins consequently tightening (see sister publication EDEM 10 April 2012).
According to Ueda, Japan’s revamped policy is the first complete plan for development of energy sector since last year’s white paper, which pledged to cut dependence on atomic energy "as much as possible in the medium-range".
It will push for an installed wind farm generation capacity of 11GW by 2020 – up from just 2.5GW today – and rising to 23GW by 2030.
Japan’s post-Fukushima installed nuclear capacity stands at 44.4GW. This accounts for slightly more than 20% of Japan’s installed electricity capacity. But, since the March 2011 earthquake and tsunami and the government’s subsequent decision to impose mandatory stress tests on the reactor fleet, nuclear generation has plummeted.
The decrease in atomic power generation saw Japan’s power utilities import a monthly record 5.53m tonnes of LNG in March, a 35% increase year on year, the Federation of Electricity Power Companies (FEPC) of Japan said on Monday.
From December through to February, output from thermal power plants increased 41% year on year. Consumption of crude oil almost tripled, while that of LNG increased by 34%, FEPC chairman Makoto Yagi said.
Last week, the Japanese government’s decision to grant final approval to restart two nuclear reactors at the Ohi nuclear power plant, which would reduce LNG demand by around 2m tonnes per annum (mtpa), failed to ease pressure on LNG prices, because the expected three-month lag between approval and restart will coincide with increased demand from Latin America as the region enters its winter.
Wind turbines in Japan
1997: 18 MW
1998: 30 MW (+66.7 %)
1999: 68 MW (+126.7 %)
2000: 142 MW (+108.9 %)
2001: 275 MW (+93.7 %)
2002: 334 MW (+21.5 %)
2003: 506 MW (+51.5 %)
2004: 896 MW (+77.1 %)
2005: 1,040 MW (+16.1 %)
2006: 1,309 MW (+25.9 %)
2007: 1,528 MW (+16.8 %)
2008: 1,880 MW (+23.1 %)
2009: 2,056 MW (+9.4 %)
2010: 2,304 MW (+12.1 %)
2011: 2,501 MW (+8.6 %)