Japan’s FEPC calls for clearer nuclear policy stance

  • Spanish Market: Coal, Electricity, Emissions, Natural gas
  • 20/05/24

Japan's Federation of Electric Power Companies (FEPC) has called for a clarification of the country's nuclear power policy, to ensure stable electricity supply and alignment with its net zero emissions goal.

The call comes as the government reviews its basic energy policy, which was formulated in 2021 and calls for the reduction of dependence on nuclear reactors as much as possible. But Japan's guidelines for green transformation, which was agreed in February 2023, states that Japan should make the most of existing nuclear reactors.

Tokyo should clearly state in its new energy policy that it is necessary to not only restart existing nuclear reactors, but also build new reactors, said FEPC chairman Kingo Hayashi on 17 May. Hayashi is also the president of utility Chubu Electric Power. Hayashi emphasised that to utilise reactors, it would be necessary to have discussions regarding financial support, policy measures that would help ensure cost recovery, address back-end issues in the nuclear fuel cycle and conduct a review of nuclear damage compensation law.

Japan's current basic energy policy is targeted for the April 2030-March 2031 fiscal year, when the country's greenhouse gas (GHG) emissions is forecast to fall by 46pc from 2013-14 levels. To achieve this, the power mix in the policy set the nuclear ratio at 20-22pc, as well as 36-38pc from renewables, 41pc from thermal fuels and 1pc from hydrogen and ammonia. Japan typically reviews the country's basic energy policy every three years.

Nuclear, as well as renewables, would be necessary to reduce Japan's GHG emissions, although thermal power units would still play a key role in addressing power shortages. But Japan has faced challenges in restarting the country's reactors following safety concerns after the 2011 Fukushima nuclear disaster, with only 12 reactors currently operational. Japan's nuclear generation in 2023 totalled 77TWh, which accounted for just 9pc of total power output.

Tokyo has made efforts to promote the use of reactors, after the current basic energy policy was introduced in 2021. The trade and industry ministry (Meti) has updated its nuclear policy, by allowing nuclear power operators to continue using reactors beyond their maximum lifespan of 60 years by excluding a safety scrutiny period in the wake of the 2011 Fukushima nuclear disaster. This could advance the discussion on Japan's nuclear stance, especially if the new basic energy policy includes more supportive regulations.

The trade and industry ministry started discussions to review the energy policy on 15 May, aiming to revise it by the end of this fiscal year. It is still unclear what year it is targeting and what ratio will be set for each power source in the new policy. But the deliberation would form a key part of efforts to update the GHG emissions reduction goal, ahead of the submission of the country's new nationally determined contribution in 2025, with a timeframe for implementation until 2035.


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Investment funds’ long TTF position tops 129TWh: Update


19/06/24
19/06/24

Investment funds’ long TTF position tops 129TWh: Update

Updates net long figure based on new Ice report released same day London, 19 June (Argus) — The net long position of investment funds at the Dutch TTF gas hub has reached its highest since January 2022 at more than 129TWh, according to the latest data released by the Intercontinental Exchange (Ice). Investment funds have traded much more heavily at the TTF over the past two months, with their net long position more than quadrupling to 129TWh on 14 June from 31.8TWh in early April, the most recent Ice commitment-of-traders report shows. This is the largest net long position that investment funds have held in the past two and a half years. Late 2020 was the last time that investment funds increased their net long position so quickly, jumping from roughly 75TWh on 27 November 2020 to a peak of nearly 256TWh on 12 February 2021 ( see investment fund graph ). Firms began to unwind this net long position from May, and there was a switch to a net short position in April 2022-August 2023. Continued TTF price volatility may have attracted more investment funds in recent months, particularly as the front-month contract earlier this month hit its highest since December, peaking at €35.88/MWh on 3 June. Russian pipeline gas used to provide the European market with a large degree of flexibility, but the loss of most of this gas, along with higher reliance on LNG, has reduced Europe's supply buffer and has exposed the TTF more to factors well outside Europe. Extended downtime at the Wheatstone LNG plant in Australia, a facility that provides no cargoes to Europe, caused the TTF front-month contract to jump to €36.12/MWh in intra-day trading last week . Similarly, news of shelling in the region of Sudzha , the location of the last still-functioning interconnection point between Ukraine and Russia, caused the TTF front-month contract on Ice to spike by more than €1/MWh in the space of two minutes before falling again. Such sudden jumps and falls have become increasingly common in recent months, with many traders noting the role of algorithmic trading in this phenomenon. A volatile trading environment is more attractive to investment funds than to other types of market participants, as they make most of their money from price volatility whereas utilities make most of their money from the margins on their sales to customers and associated services. The investment funds' move to a large net long position contrasts with a rapid move to a net short position by commercial undertakings, defined as companies with retail portfolios. These two trader categories each held net long positions of roughly 77TWh at the start of November. But investment funds had unwound this into a small net short position by March, while commercial undertakings continued to go longer, reaching a peak of 159TWh in mid-December. Mid-February appears to have been a turning point, with investment funds beginning to climb to a net long and commercial undertakings quickly unwinding to small net short. This was mostly driven by commercial undertakings' increasingly large net short position for "risk reduction contracts", topping 161TWh, as a hedge for similarly sized net long positions on the physical side in storage ( see commercial graph ). This is only the third time since 2018 that commercial undertakings' aggregate position has been net short, with the only other notable time being for a prolonged period in January-August 2021, as well as one brief week in June 2020. This likely reflects historically high EU stocks at the end of the 2023-24 winter, which have to be counterbalanced by risk-reduction hedging contracts. By Brendan A'Hearn and Matt Drinkwater ICE TTF net positions TWh ICE TTF commercial undertakings positions TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazilian minister defends shale gas exploration


19/06/24
19/06/24

Brazilian minister defends shale gas exploration

Rio de Janeiro, 19 June (Argus) — Brazil's mines and energy minister Alexandre Silveira defended exploring shale gas in the country in an address to the lower house of congress. Silveira proposed integrating Brazil's energy resources with those of neighboring countries, especially Argentina, which boasts an estimated 308 Tcf of gas reserves, according to the US Energy Information Administration. He also urged discussions regarding unconventional gas exploration in Brazil. "It makes little sense for us to continue importing unconventional gas from the US after more than five decades," Silveira said. "Meanwhile, we hesitate to explore similar resources within our own borders because of unclear reasons." Mato Grosso and Bahia states are currently discussing exploring shale gas by hydraulic fracking, while Parana and Santa Catarina states have regulation in place. More supply, lower prices Silveira once again stressed the need to increase gas supply and decrease prices. "Currently, 35pc of our chemical industry is not operating in full capacity because of insufficient gas supply and excessively high prices compared with international rates," he said. "We must explore all avenues to meet demand." This is not the first time Silveira calls for lower gas prices to push Brazil's industrialization, one of the federal government's main objectives . Brazil needs to hold a secure, sustainable approach to energy exploration while maintaining its energy sovereignty, Silveira said. For that, it needs to leverage all of its available energy resources, despite having an 88pc clean energy matrix. "We cannot afford to overlook our potential," Silveira said. "Renouncing any option would be a disservice to our nation." By Betina Moura Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU warns of 2030 climate ambition gap


19/06/24
19/06/24

EU warns of 2030 climate ambition gap

Brussels, 19 June (Argus) — The European Commission has warned of an ambition gap on the way to member states achieving the bloc's 2030 renewables and energy efficiency goals, although it noted "some" progress. And European industry still faces comparatively high energy prices, the commission said in its twice-yearly report on countries' economies and finances. Increasing energy efficiency and switching to less costly renewable energy is "essential" to improve the competitiveness of European industry, but most EU states lack solid and sufficiently detailed investment estimations, as well as concrete measures to attract private clean energy finance, the commission said. And countries need to strengthen their carbon sinks from the land use, land-use change and forestry sectors. For Germany, the commission noted that the transport sector has failed to reach annual sector-specific emission targets, including in 2023 , when the sector increased final energy consumption by 6.3pc compared with 2022. EU states also need to strengthen policies to phase out fossil fuel subsidies so as to align with the EU goal of becoming a climate neutral economy, the commission said. For France, the commission estimated a net budgetary cost of emergency energy support measures at 0.9pc of GDP in 2023 and a projected 0.2pc in 2024, falling to 0pc in 2025. And for Italy the commission forecast a net budgetary cost of emergency energy support measures of 1pc of GDP in 2023, reaching 0pc in 2024. For Germany, the estimations are 1.2pc of GDP going to energy support measures in 2023, 0.1pc in 2024, and 0pc in 2025. Another of the commission's key recommendations is to cut the share of Russian imports in total EU gas imports beyond the 15pc seen in 2023, even if the share historically stood at around 40pc. Further efforts are needed from "certain" countries to phase out imports of LNG from Russia, the commission said. EU states have struggled to agree a further round of sanctions against Russia, which would include restricting the reloading of Russian LNG for export outside the EU at terminals in Europe. EU foreign ministers are expected to discuss the matter at a meeting on 24 June. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australian opposition releases nuclear power plan


19/06/24
19/06/24

Australian opposition releases nuclear power plan

Sydney, 19 June (Argus) — Australia's main political opposition today laid out its nuclear energy plan. It aims to bring the first government-owned reactors on line as early as 2035-37 if it is elected next year. The Liberal-National coalition announced seven locations where small modular reactors (SMRs) or large-scale units could be installed, all in sites hosting coal-fired power facilities that have either closed or are scheduled to close, and each of them would have cooling water capacity and transmission infrastructure. A SMR could start generating electricity by 2035, while a larger plant could come on line by 2037, according to the coalition. "The Australian government will own these assets, but form partnerships with experienced nuclear companies to build and operate them," the opposition's leader Peter Dutton, spokesman for climate change and energy Ted O'Brien and National party leader David Littleproud said in a joint statement on 19 June. The opposition claims the federal Labor government's "renewables-only approach" is expensive and is "failing", while its target of reducing greenhouse gas (GHG) emissions by 43pc by 2030 has become "unachievable". The coalition earlier this month said it would not pursue the target, although it declined to set its own 2030 goal for GHG emissions cuts . Federal energy minister Chris Bowen said the coalition's plan lacked detail, costs or modelling, although the opposition has vowed to engage with local communities while site studies, including detailed technical and economic assessments, take place. The proposed sites are the Liddell and Mount Piper plants in New South Wales; the Tarong and Callide stations in Queensland; the Loy Yang facility in Victoria; the Northern Power station in South Australia; and the Muja plant in Western Australia. Nuclear power generation is prohibited in Australia under federal and state laws, and the Labor government last year ruled out legalising it because of its high costs. The Australian federal government estimates that replacing Australia's coal-fired plants with nuclear would cost A$387bn ($257bn) . The Commonwealth Scientific and Industrial Research Organisation (CSIRO) late last year said SMRs would not have "any major role" in emission cuts needed in the electricity sector for the country to reach its net zero GHG emissions target by 2050, as costs would be well above those for onshore wind and solar photovoltaic (PV). Nuclear plants would also take 15 years or more to be deployed because of lengthy periods for certification, planning and construction, CSIRO noted. CSIRO last month included large-scale nuclear costs for the first time in its annual GenCost report, saying costs would be lower than those for SMRs but still way above renewables. Estimated costs between A$136-226/MWh could be reached by 2040, compared with A$171-366/MWh for SMRs and A$144-239/MWh for coal-fired power with carbon capture and storage (CCS), but only if Australia committed to a "continuous nuclear building programme", requiring an initial investment in a higher cost unit. "If a decision to pursue nuclear in Australia were made in 2025, with political support for the required legislative changes, then the first full operation would be no sooner than 2040," CSIRO noted. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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