Palm oil use at Japan’s power plants remains halted

: Biomass
23/10/30

Japan's environmental and energy business association (Kanene), formerly known as the biomass power association, said on 27 October that palm oil (PO) use for power generation remains halted because of difficulties in procuring the fuel.

PO consumption at the power generation plants in Japan has been halted since the spring of 2021, according to a Kanene survey with three members of the Japan Consortium for Sustainable Biofuel Generation (JCSBG) — Eneres with two plants totalling 37MW capacity, Kamisu Power with a 39MW plant and Zero Watt Power with five plants — and an undisclosed non-member company.

PO prices have passed their peak, but it remains expensive for power generators in Japan because of a weaker yen to the US dollar, inflation in exporting countries and price hikes for fertilizers, JCSBG members said. One of Zero Watt Power's plants has been running with used cooking oil instead of PO, at 50pc capacity. The non-member company also said it has not fully operated a plant as PO purchase prices have outweighed power sales prices.

Kanene calculated current PO procurement prices to be ¥124.30/kg ($831/t), assuming PO prices are around $770/t, shipping costs $20/t and the roundtable on sustainable palm oil certificate premium $50/t. Kanene also implied PO procurement prices should ideally be around ¥60/kg, if a 40MW power plant wants to be profitable and take 10.7 years to achieve investment recovery, based on electricity sales prices of Y18/kWh.

Kanene asked Meti to support development and recognition of new liquified fuels other than PO. JCSBG also requested Meti to relax restrictions to modify biomass consumption ratios.

Private-sector firm Nebio Super Denryoku also operates a 41.1MW PO-fuelled biomass power plant in northeastern prefecture Miyagi.

By Nanami Oki

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Rising freight rates support prices of PKS to Europe

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