Battery storage stands out in Japan clean power auction
Japan's first auction for long-term zero emissions power capacity has attracted strong bidding interest with a plan to install battery storage, as investment in the power storage system is gaining momentum in line with expanded use of fluctuating renewable energy sources.
Japan launched the clean power auction system from the April 2023-March 2024 fiscal year, aiming to spur investment in clean power sources by securing funding for fixed costs in advance to drive the country's decarbonisation by 2050.
The first auction, which was held in January, has awarded 1.1GW capacity for battery storage, or 27pc of total contract capacity for clean power sources, excluding gas-fired generation that has been temporally included in the auction system to help ensure stable power supplies, nationwide transmission system operator Organisation for Cross-regional Co-ordination of Transmission Operator (Occto), which manages the auction, said on 26 April.
Bidding capacity for battery storage totalled around 4.6GW, the highest volume among any other clean power sources. This means the contract ratio for storage batteries was 24pc compared with the 100pc ratio for ammonia co-firing, hydrogen co-firing, biomass dedicated and nuclear capacity, along with gas-fired capacity.
Awarded capacity for battery storage as well as pumping-up electric power facilities reached 1.67GW, exceeding the 1GW sought by the auction.
Japan has secured a total of 9.77GW of net zero capacity through the 2023-24 auction. Contract volumes covered 1.3GW of nuclear, 199MW biomass, 577MW of pumping-up electric power, 770MW for ammonia co-firing and 55.3MW hydrogen co-firing, as well as 1.1GW of battery storage. This also included 5.76GW of gas-fired projects.
All winners under the auction can generally receive the money for 20 years through Occto, which collect money from the country's power retailers, although they need to refund 90pc of other revenue. The first auction saw total funding of ¥233.6bn/yr ($1.51bn) for decarbonisation power sources and ¥176.6bn/yr for gas-fired capacity.
Japan's battery requirements are expected to continue rising, with uncertainty over future nuclear availability likely to spur Tokyo to accelerate the roll-out of renewable energy to meet a 46pc greenhouse gas emissions reduction by 2030-31 against 2013-14 levels — a target still far above the 23pc recorded in 2022-23. Japan will need to install 38-41GW of renewable capacity, nearly triple actual output of 14GW in 2019.
Japan is looking to establish lithium-ion battery production capacity of 150GWh/yr domestically and 600GWh/yr globally by 2030. The trade and industry ministry projects the latter target will require 380,000 t/yr of lithium, 310,000 t/yr of nickel, 600,000 t/yr of graphite, 60,000 t/yr of cobalt and 50,000 t/yr of manganese.
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Floods stress Brazil energy sector vulnerability
Floods stress Brazil energy sector vulnerability
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Japan’s J-Power steps up coal-fired power phase-out
Japan’s J-Power steps up coal-fired power phase-out
Osaka, 10 May (Argus) — Japanese power producer and wholesaler J-Power is stepping up efforts to halt operations of inefficient coal-fired power plants, while pushing ahead with decarbonisation of its existing plants by using clean fuels and technology. J-Power plans to scrap the 500MW Matsushima No.1 coal-fired unit by the end of March 2025 and the 250MW Takasago No.1 and No.2 coal-fired units by 2030, according to its 2024-26 business strategy announced on 9 May. It also aims to decommission or mothball the 700MW Takehara No.3 and the 1,000MW Matsuura No.1 coal-fired units in 2030. The combined capacity of the selected five coal-fired units accounts for 32pc of J-Power's total thermal capacity of 8,412MW, all fuelled by coal. While phasing out its ageing coal-fired capacity, J-Power is looking to co-fire with fuel ammonia at the 2,100MW Tachibanawan coal-fired plant sometime after 2030 and ensure it runs on 100pc ammonia subsequently. The company plans to increase the mixture of biomass at the 600MW Takehara No.1 unit, along with the installation of a carbon capture and storage (CCS) technology after 2030. The CCS technology will be also applied to the 1,000MW Matsuura No.2 unit, which is expected to co-fire ammonia, after 2030. J-Power plans to use hydrogen at the 1,200MW Isogo plant sometime after 2035. The company is also set to deploy integrated coal gasification combined-cycle and CCS technology at the 500MW Matsushima No.2 unit and the 150MW Ishikawa No.1 and No.2 units after 2035. The company aims to cut carbon dioxide emissions from its domestic power generation by 46pc by the April 2030-March 2031 fiscal year against 2013-14 levels before achieving a net zero emissions goal by 2050. This is in line with Tokyo's emissions reduction target. The company aims to expand domestic annual renewable output by 4TWh by 2030-31 compared with 2022-23, along with decarbonising thermal capacity. Its renewable generation totalled 10.4TWh in 2023-24. Tokyo has pledged to phase out existing inefficient coal-fired capacity by 2030, which could target units with less than 42pc efficiency. The country's large-scale power producers have reduced annual power output from their inefficient coal-fired fleet by 13TWh to 103TWh in 2022-23 against 2019-20, according to a document unveiled by the trade and industry ministry on 8 May. It expects such power generation will fall further by more than 60TWh to 39.700TWh in 2030-31. Global pressure against coal-fired power generation has been growing. Energy ministers from G7 countries in late April pledged to phase out "unabated coal power generation" by 2035 or "in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries' net zero pathways". By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG imports loom as Australia unveils gas strategy
LNG imports loom as Australia unveils gas strategy
Sydney, 9 May (Argus) — Australia's federal government will attempt to reverse the decline in new gas developments by expediting projects, although a report has found it is unlikely to reverse an anticipated shortfall in southern states' supplies later this decade. Canberra's long-awaited Future Gas Strategy will form its future policy on the resource, following two years of uncertainty for the industrial sector. This follows the Labor party-led government's election in May 2022 and its dumping of the previous Liberal-National coalition administration's gas-fed recovery from Covid-19 policy, which emphasised bringing new supplies on line to drive down rising prices. Six principles have been outlined by the government — driving down emissions reductions to reach net zero emissions by 2050, making gas affordable for users during the transition, bringing new supplies on line, supporting a shift to "higher-value and non-substitutable gas uses", ensuring gas and power markets remain fit for purpose during the energy transition and maintaining Australia's status as a reliable trading partner for energy, including LNG. The report found that gas-fired power generation will likely provide grid firming as renewables replace older coal-fired plants. Peak daily gas demand could rise by a factor of two to three by 2043, according to projections, with gas-powered peaking generation labelled a "core component of the National Electricity Market to 2050 and beyond". But by the 2040s more alternatives to gas for peaking and firming are expected to become available. Supplies are forecast to dip significantly in the latter years of the decade, especially in gas-dependent southeast Australia, driven by the 86pc depletion of the region's producing fields. This reduced supplies will outpace a fall in demand , while rising demand is forecast because of the retirement of Western Australia's coal-fired power plants . The report found the causes of Australia's low exploration investment are "multifaceted", blaming the Covid-19 pandemic, difficulties with approvals processes , legal challenges, market interventions and a perceived decline in social licence. It added that international companies may focus on lower cost and lower risk fields in other countries. New sources Stricter enforcement of petroleum retention leases and domestic gas reservation policies are also likely to increase supplies, the report found, with term swap arrangements beneficial in increasing their certainty. Upwards pressure in transport costs is likely to result from increased piping of Queensland coal-bed methane gas to southern markets such as Victoria state, which could influence industrial users to relocate closer to gas fields in the future. Options canvassed to meet demand include more pipelines and processing plants and LNG import terminals , which would provide the fastest option but must overcome regulatory and commercial pressures, given the pricing of LNG would be higher than current domestic prices. Longer term supplies depend on the commerciality from unsanctioned projects such as Narrabri and in the Beetaloo and Surat basins, the report said. More supplies are needed to support exports under foundational LNG contracts, with an impact on the domestic market if Surat basin developments such as Atlas does not continue, the report said. Forecasts show LNG exporters have sufficient production from existing and committed facilities to meet forecast exports until 2027 if expected investments proceed. But beyond this new investment is required, especially for the 8.5mn t/yr Shell-operated Queensland-Curtis LNG at Gladstone. The Australian Energy Producers lobby, which represents upstream oil and gas businesses, said the strategy should now provide clear direction on national energy policy. But the Greens party, the main federal parliamentary group aside from Labor and the Liberal-National coalition, said any plans to continue gas extraction beyond 2050 will negate state and federal net zero 2050 climate targets. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hybrid vehicles spur Toyota’s record 2023-24 profit
Hybrid vehicles spur Toyota’s record 2023-24 profit
Tokyo, 9 May (Argus) — Japan's largest car producer Toyota reported a record profit for the 2023-24 fiscal year ending 31 March, partially because of strong sales of hybrid electric vehicles (HEVs). Toyota nearly doubled its profit for 2023-24 to ¥5.3 trillion ($34bn), its highest ever for a fiscal year. It sold 11mn vehicles globally, including its luxury brand Lexus, up by 7.3pc from a year earlier. The sharp rise in profit partly resulted from higher demand for HEVs that Toyota sold 3.6mn units of globally, up by 32.1pc from the previous year. North America was the leading market for its HEV sales, said the company's chief financial officer Yoichi Miyazaki, but a further breakdown was undisclosed. Firm demand for HEVs, for which Toyota has both technological and commercial advantages given its long history of development and experience, has largely been prompted by a global slowdown in battery electric vehicle (BEV) sales. HEVs consume significantly less battery materials compared with BEVs, as their battery size is normally 10pc of a BEV. Toyota is accelerating HEV production during 2024-25, as it plans to increase sales by 24.5pc from a year earlier to 4.5mn units. This accounts for 43pc of the company's total sales projection and is up by around 8 percentage points from a year earlier. The global slowdown in BEV sales could mean customers are being sceptical about the overstated view that BEVs are the only solution for decarbonisation, said Toyota's chief executive Koji Sato, adding that the infrastructure necessary for driving BEVs, including charging stations, has not yet adequately developed. But he was unclear on whether Toyota will slow its EV strategy that it announced last year to sell 1.5mn/yr of EVs by 2026 with 10 new models. The company plans to sell 171,000 BEVs during 2024-25, accounting for 1.6pc of its total sales projections. This is up by 46.2pc from a year earlier but the projection is based on "conservative estimations", according to Sato. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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