Japan allows more coal-fired power to tackle energy shock

TOKYO: Japan will allow expanded use of coal-fired power plants in an effort to strengthen supply security and cope with the energy shock from the war in the Middle East.

The country will permit less-efficient coal facilities to participate in capacity market auctions in the fiscal year starting in April, according to documents from a panel meeting at the trade ministry on Friday. Such plants had earlier been restricted from the auctions - where generators sell supply - as part of efforts to tackle climate change.

Japan is joining other nations that have shifted course to rely more on the dirtiest fossil fuel in the wake of the war. The effective closure of the Strait of Hormuz and the shutdown at the world's largest liquefied natural gas plant in Qatar have left Asian nations that are heavily dependent on Middle Eastern energy vulnerable.


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This increased use of coal-fired power, combined with reduced demand for natural gas due to the ramp-up of Tokyo Electric Power Co.'s Kashiwazaki-Kariwa nuclear plant, could offset about 40% of the LNG imports Japan previously received through Hormuz, Prime Minister Sanae Takaichi said in a post on X.

South Korea is also considering more flexible use of coal power if LNG deliveries are disrupted. Soaring gas prices are pushing European countries to depend more on fossil fuels for electricity generation.

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Coal accounted for the largest share of Japan's power generation in 2024 and in the previous two years, according to data compiled by BloombergNEF. The proposal presented on Friday is expected to offset about 500,000 tonnes of LNG use, the trade ministry said in the document.