Japan’s Jera to handle 35mn t/yr LNG until FY2035-36

  • Spanish Market: Electricity, Natural gas
  • 17/05/24

Japan's largest LNG importer Jera plans to maintain its LNG handling volumes at no less than 35mn t/yr until the April 2035-March 2036 fiscal year.

Rising renewable power supplies and the possible return of more nuclear reactors are likely to pressure LNG demand from Japan's power sector. Jera consumed 23mn t of LNG in 2023-24, down by 3pc on the year, although it handled 35mn t through its global operations during the same year.

But Jera needs to secure sufficient LNG supplies to adjust for imbalances in electricity supplies and ensure power security, through more flexible operations. It is also looking to further promote LNG along with renewable electricity in Asian countries, while helping to reduce their dependence on coal- and oil-fired power generators.

The 2035 target for LNG is part of Jera's three pillars of strategic focus, along with renewables as well as hydrogen and ammonia, which was announced on 16 May to spur decarbonisation towards its 2050 net zero emissions goal. The company plans to invest ¥5 trillion ($32bn) for these three areas over 2024-36.

Jera also aims to retire all supercritical or less efficient coal-fired units by 2030-31. This would help achieve the company's target of cutting CO2 emissions from its domestic business by at least 60pc against 2013-14 levels by 2035-36.


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14/06/24

Japan steps up effort to lower floating wind power cost

Japan steps up effort to lower floating wind power cost

Osaka, 14 June (Argus) — Japan is stepping up efforts to lower overall costs for offshore floating wind power generation, which can play a key role in boosting the country's renewable energy supplies. Japan's trade and industry ministry Meti and state-owned research institute Nedo said on 11 June that they have decided to support two pilot projects that will seek to bring down the overall costs for offshore floating wind power generation. Nedo plans to provide around ¥85bn ($539.8mn) from its green innovation fund over seven fiscal years from April 2024 to 31 March 2031. A consortium of nine Japanese companies led by Marubeni Offshore Wind Development, a wholly owned subsidiary of Japanese trading house Marubeni, has won a public tender to set up a project around 25km offshore south of Akita prefecture. The consortium plans to install two floating wind power facilities with capacity of over 15MW, targeting for operations to begin around autumn of 2029. Another consortium of five Japanese firms led by engineering firm C-Tech, a group company of utility Chubu Electric Power, is planning to build a floating power generator with over 15MW of capacity offshore Aichi prefecture. The projects assume relatively large capacity deployments of more than 10MW and aim to establish commercial technology for offshore wind to become globally competitive cost-wise by 2030. The project winners should set a cost target, referencing the US' cost target of $0.045/kWh by 2035, according to the government's wind power auction guidelines. This cost reduction is needed to accelerate a rollout of floating wind power facilities and help Japan achieve its 2050 net zero emission goal. Japan's purchase cost for electricity generated by offshore floating power facilities is set at ¥36/kWh for the April 2024-March 2025 fiscal year under the country's feed-in-tariff and feed-in-premium schemes. This can be compared with the lowest contract price of ¥3/kWh for bottom-fixed offshore wind projects in the latest public auction in December 2023, with the auction having secured a total of around 1.8GW bottom-fixed offshore wind capacity. Japan is aiming to install 23.6GW of wind power capacity by 2030, including 5.7GW offshore and 17.9GW onshore. It is eyeing the development of offshore wind farms, especially by promoting floating technology, given the country's geographical constraints. Tokyo aims to have offshore wind projects of 10GW by 2030 and 30-45GW by 2040. Tokyo has agreed to new legislation that will allow wind power facilities to be built in its exclusive economic zone, beyond its territorial and internal waters regulated under current laws, while striving to protect the marine environment. It is aiming to pass the amended legislation in an ordinary parliament session that will end on 23 June. Japan is under pressure to boost renewable power capacity to spur decarbonisation because the future of its nuclear industry is still unclear. But rising intermittent output from renewables will also prompt the country's power producers to secure sufficient thermal power capacity, including gas and coal, to help adjust power imbalances. Tokyo aims to generate 41pc of its electricity from thermal fuels in the April 2030-March 2031 fiscal year, which is higher than 36-38pc for renewables, under its current basic energy policy, which is due for a review this year. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Inpex invests in Australian solar, battery project


14/06/24
14/06/24

Inpex invests in Australian solar, battery project

Tokyo, 14 June (Argus) — Japanese upstream firm Inpex has decided to invest in a hybrid solar and battery project in the Australian state of New South Wales, aiming to boost its renewable energy business abroad. Inpex reached a final investment decision on the Quorn Park Hybrid project in Australia, a joint venture project with Italian utility Enel's wholly-owned Australian renewable energy firm Enel Green Power Australia (EGPA), the Japanese firm announced on 14 June. The project consists of solar farm construction and power generation with a photovoltaic and battery system. Batteries are usually a necessary back-up power source to stabilise power grids that utilise renewable energy. The project aims to produce around 210GWh/yr from solar power with around 40MWh/yr from battery storage, according to EGPA, with an operational capacity of around 98MW for solar and 20MW for battery. The firms plan to start construction during the second half of 2024, before it starts commercial operations during the first half of 2026, according to an Inpex representative that spoke to Argus . The Japanese firm did not disclose the investment amount but the investment value for construction of the project is estimated at "over $190mn", according to EGPA's website. Inpex bought a 50pc stake in EGPA in July 2023, with an aim of expanding its renewable generation portfolio. The firm regards Australia as a "core area" for boosting its renewable energy business, according to Inpex. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Renewable natural gas not ‘major’ for climate: Chevron


13/06/24
13/06/24

Renewable natural gas not ‘major’ for climate: Chevron

New York, 13 June (Argus) — The growth of renewable natural gas (RNG) production is great news for the climate, but "to say that it is having a major impact by itself is difficult," the president of Chevron's global gas division said this week at an industry gathering. The US oil major, which has invested in RNG facilities in California , Michigan and elsewhere in recent years, has also boosted its conventional gas production on the heels of a crude-focused acquisition of a Denver-based producer. "I don't want to get called out (for) greenwashing or whatever because the volume is just very small compared to the overall portfolio," Chevron gas division president Freeman Shaheen said at the Northeast LDC Gas Forum in Boston, Massachusetts. Advocates for RNG hail the fuel, comprising methane from landfills and animal waste projects that is processed into pipeline-quality gas, as a boon for the climate. This is not only because its use displaces conventional natural gas produced in hydrocarbon drilling — so-called ‘fossil gas' — but because its production takes methane that would have been released directly into the atmosphere and burns it as fuel, releasing CO₂ — a less potent greenhouse gas — instead. But RNG today comprises just 0.5pc of the North American gas market. Even with continued policy support and technological development, Wood Mackenzie projects it will grow to just 4 Bcf/d (113mn m³/d), or 3pc of the market, by 2050. This is why some policymakers, such as Massachusetts' utilities regulatory, have rejected gas distributors' calls to decarbonize the gas system with RNG. The energy industry simply has not invested enough in RNG over the past several decades for it to reach the scale needed to play a bigger role in cutting emissions, Shaheen said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK political parties repeat existing stances on energy


13/06/24
13/06/24

UK political parties repeat existing stances on energy

London, 13 June (Argus) — The two main UK political parties have set out their plans, including on energy and climate change, with just three weeks until the general election. Energy security and the cost to consumers is a recurring theme for both, but the manifestos present some marked differences in approach to the energy transition. Both the incumbent Conservative and opposition Labour parties doubled down on existing positions in their respective manifestos. The Conservative party said that it remains committed to the UK's 2050 net zero emissions target, but promises a "pragmatic and proportionate" route. The party's manifesto guarantees "no new green levies or charges while accelerating the rollout of renewables". The UK's net zero goal is legally-binding, and was passed with significant cross-party support under a Conservative government in 2019. The Conservatives have been in power since 2010, and fielded five prime ministers in that time. Recent polling data show a substantial lead for Labour, which performed well at local elections in May. Labour placed strong focus on the opportunity the transition offers, saying that it would place the UK at the "forefront of climate action by creating the green jobs of the future at home and driving forward the energy transition on the global stage". The party has committed to zero-carbon power by 2030, although it would "maintain a strategic reserve of gas power stations to guarantee security of supply", it said. The Conservative manifesto reiterates the party's plans to build new gas-fired power plants. The party had previously committed to a decarbonised power grid by 2035, in line with a G7 pledge, although that is not mentioned in its manifesto. The two main parties clearly diverge on their approaches to North Sea oil and gas production. The Conservatives aim to keep the windfall tax — which effectively results in a 75pc rate — on oil and gas producers in place "until 2028-29, unless prices fall back to normal sooner". Labour confirmed plans to lift the rate to 78pc and run the tax until the end of the next parliament, which is likely to be mid-2029. Labour is also clear that it "will not revoke existing licences" in the North Sea, but it will not issue any new licences — for oil, gas or coal. The Conservatives restated the party's aim to legislate for annual North Sea licensing rounds . Both parties back nuclear energy, including small modular reactors — though those are unlikely to be operational until after 2030. And both pledge to cut planning bureaucracy and tackle grid connections. Labour's plans to "double onshore wind, triple solar power, and quadruple offshore wind by 2030" would result in installed capacity of 31GW, 48GW and 59GW, respectively, from a baseline of end-2023. The Conservatives' target to triple offshore wind by the end of the next parliament would put installed capacity at 44GW in 2029 — below the 50GW target for 2030 set in 2022 — while it said it supports solar and onshore wind in some circumstances. Finance in focus Both parties are keen to pull in private-sector investment, while Labour took up an original Conservative pledge to "make the UK the green finance capital of the world". And both pledge to address the cost of energy for consumers — Labour through local power generation projects and home insulation upgrades, and the Conservatives by ruling out any further "green levies". The latter plans to reverse London's expansion of the ultra-low emissions zone — originally planned by Conservative then-mayor and later prime minister Boris Johnson. Labour said that it would restore a phase-out date of 2030 for new internal combustion engine cars — which prime minister Rishi Sunak in September pushed back to 2035 . On an international level, both parties mention climate leadership at summits such as UN Cops. The Conservatives pledged to "ring-fence" the UK's climate finance commitments, while Labour committed to restore development spending to 0.7pc of gross national income "as soon as fiscal circumstances allow". By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

TTF front-month trades at highest since December 2023


13/06/24
13/06/24

TTF front-month trades at highest since December 2023

London, 13 June (Argus) — The Netherlands' TTF front-month gas price was trading near the highest level since last year this morning and afternoon as LNG supply outages contribute to market tightness. The price traded at €36.12/MWh ($38.88/MWh) on the Intercontinental exchange at 15:00 London time today. If the price holds around this level until the close it would be the highest front-month assessment since 8 December 2023. The contract opened at €35.43/MWh on the exchange, up from Argus' Wednesday assessment of €35.20/MWh, and climbed in the morning on the news of an extended shutdown at an Australian LNG terminal. Operations at Chevron's 8.9mn t/yr Wheatstone LNG export terminal in Australia may be disrupted for several weeks , the firm announced today. Loadings from the terminal have been halted since 10 June because of unplanned maintenance. The outage was previously expected to last until 14 June and disrupt delivery of 3-4 cargoes, but could now last until 19-26 June, according to market sources and loading schedules. Although Europe rarely imports cargoes directly from Australia, the reduction in deliveries to northeast Asia will mean prices in that region have to increase to attract more Atlantic-basin cargoes, pulling up the TTF at the same time. Quantities of US LNG on the water have risen sharply since mid-May according to Vortexa data, despite no incentive for floating storage, suggesting that more vessels are taking the longer route to deliver cargoes to northeast Asia ( see US LNG on the water graph ). The Wheatstone shutdown comes on top of a second quarter of planned and unplanned outages at other export terminals. High utilisation rates at terminals mean any downtime translates directly into lower deliveries than expected and contributes to LNG market tightness. The US' 33mn t/yr Sabine Pass terminal may be undergoing maintenance this month, based on reductions in feedgas deliveries. An unplanned outage last month cut deliveries from Australia's 15.6mn t/yr Gorgon terminal, while Peru's 4.4mn t/yr Peru LNG terminal is down for two weeks of maintenance. In addition to LNG supply disruptions, unplanned constraints at Norwegian offshore infrastructure at the beginning of this month removed supply from the European market and pushed up prices. A crack in a pipeline in an offshore hub discovered on 2 June caused a shut-in at the Nyhamna processing plant. The cut in gas production from connected fields over the five days that it took for the plant to restart was equivalent to 2-3 LNG cargoes. Although Norwegian gas production and global LNG loadings have been lower than previously expected, demand in Europe remains muted. Stocks in the EU are higher than ever for the time of year, while industrial demand remains low. Temperatures have held well below normal in much of western Europe since the beginning of the month. Heating demand has been higher than normal for the period, but the weather is already so warm that conditions much cooler than normal can only spur small increases in heating demand. Gas-fired generation was weak in May as increased renewables capacity, strong nuclear output and low aggregate demand cut into the incentive for power sector gas burn. By Rhys Talbot TTF front-month US LNG on the water, mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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