<article><p class="lead">A spike in weather-driven power demand boosted Japanese coal-fired generation on the year in December, although the upside was limited by capacity constraints across the fleet.</p><p>Japanese power generation rose by 4pc on the year to 81.6TWh in December, according to energy ministry (Meti) data released this week, as unseasonably cold weather boosted demand at the end of 2020. This, in addition to a 3TWh drop in nuclear output, boosted combined generation from fossil fuels by 9pc on the year to 72.3TWh — the highest for any month since February 2018.</p><p>But the impact on coal-fired generation was modest, rising only 1pc to 26.8TWh amid an increase in capacity restrictions compared with the previous year.</p><p>Around 9.5GW of Japanese coal-fired capacity was unavailable because of maintenance and outages in December, according to <i>Argus </i>analysis of power exchange data, leaving an implied 41GW available, based on the country's 50.5GW of installed coal capacity. This was down from implied availability of 42.1GW in December 2019.</p><p>Generation data for December suggest that Japan's available capacity was run at an average 87.8pc load, up from 84.9pc 12 months earlier, which supported the annual increase in output despite lower availability.</p><p>But natural gas was called upon to meet the majority of the spike in power demand, with generation jumping by 12pc on the year to a 23-month high of 38.2TWh. This represented around 62pc of Japan's installed gas capacity or 74pc of implied availability, based on around 13.7GW of capacity restrictions.</p><p>Generation from both fuels is likely to have climbed even further in January, as national power demand continued to rise strongly during the cold snap and nuclear availability remained down on the year. Total power demand was 8pc higher on the year at around 86.4TWh in January, according to data from the country's grid operators.</p><p>But fossil fuel generation has probably fallen back in line with seasonal norms since early February, as overall power demand has weakened following the cold snap.</p><p>Japanese coal-fired generation fell by 2pc on the year to 274.5TWh in 2020, Meti data show. Government data pegged total coal consumption at 106.2mn t, from 108.5mn t in 2019.</p><p>Year-on-year increases earlier in the year and a strong finish in December partially offset annual declines during the summer when Covid-19 lockdowns curbed economic activity.</p><p>Gas-fired generation fell by 3pc to 350.8TWh, or 46.5mn t of LNG consumption, down from 47.6mn t in 2019. In contrast to coal burn, gas-fired generation was weaker than 2019 throughout the first seven months of the year, but then grew on the year at the end of 2020, possibly in response to weaker oil-linked LNG prices that boosted the fuel's competitiveness against coal in the autumn.</p><p class="bylines">By Jake Horslen</p><p><div class="picture"><div><span class="pic_title">Japanese coal-fired generation</span> <span class="units">GWh</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2021/04/08/japancoal08042021122655.jpg"></div></p><p><div class="picture"><div><span class="pic_title">Japanese gas-fired generation</span> <span class="units">GWh</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2021/04/08/japangas08042021122706.jpg"></div></p></article>
