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Discussion:The recent development of coal power in China and Japan
REEI 2020/09/04

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u  Lin: Hello, everyone. Welcome to the first issue of REEI’s podcast on energy and climate change. I'm Lin Jiaqiao, from REEI, Rock Environment and Energy Institute. You can call me Lin. Today we have the honor to talk to professor Jusen Asuka, from Center for Northeast Asian Studies of Tohoku University in Japan. We’ve known professor Jusen Asuka for several years. He has been tremendously helpful and supportive to our work.

u  Professor: Hello. My name is Jusen Asuka. I'm working for Tohoku University. I'm very happy to be the first commentator that people from outside and to talk about the environmental climate issue in Asian countries.

u  Lin: OK. So, as the first guest of our audio programme, do you have any comments or expectations for our podcast?

u  Professor: I do have a lot of expectations and looking forward to hearing from you on environment issue, climate change issue, and other issue, not only about China but also about the world. So, I'm really looking forward to watching and listening to your podcast.

u  Lin: Thank you for encouragement. Great! Today’s topic is about the coal power in Japan and China, and also in the region. Professor, what is the current status of Japan's coal power development?  Can you share something about this?

u  Professor:Yes, coal-fired power plant is a quite big issue when we talk about climate change. At this moment, we have more than 140 coal-fired power plants in Japan. Some of them are quite big, and some of them are quite small. Some of them are quite new and some of them are quite inefficient. Total energy mix means how much percentage of the participation coming from each technology. The coal fired power plant accounts for almost 30% at this moment in Japan. So, it's quite  a big number. And how to reduce that number is very important for Japan to do climate change mitigation action.

u  Lin:  Great. Can you also say something about the COVID-19 and its impact to Japan's, for example, power demand? Also, the impact on coal power sector?

u  Professor:  Actually, the power demand didn't change so much. And of course, we are now talking about so called green recovery. But still, the voice is very small. Ministry of Environment is always talking about that green recovery is very important in Japan. Actually, the energy mix or the energy policy haven't changed so much. We had supplementary budget to tackle the issue caused by the pandemic. But the environmental budget of the substantive budget was very small, less than 1%. So, we are sorry for that. And we are trying to extend or increase the environmental budget or climate change budget for next coming fiscal year.

u  Lin: I see. So, the environmental budget you mentioned, do they include the carbon emissions?

u  Professor: No. I mean in terms of money. So, the fiscal budget. And we had 60 trillion Japanese Yen supplementary budget to tackle the pandemic. Some countries took a lot of money to make so-called green discovery. But actually, in Japan, we didn't see any green recovery budget / green supplementary budget at this moment.

u  Lin: I see. Thank you for your briefing about the coal power sector and the pandemic’s influence on coal power sector. So, I think I can share something about the Chinese coal power sector to you here a little bit. Since you might know every year China's National Energy Administration (NEA) releases the risk alert for coal power, capacity planning, and construction, which looks ahead for the next three years. So, early this year, around February or March time, the latest 2023 risk alert was released by the NEA. So basically, the message is to increase the orange and green ratings and reduce the high-risk regions, meaning that more coal capacity could be (under construction) theoretically. But in June time, there's a conflict in a signal from Chinese National Development and Reform Commission (NDRC). They gave a conflicting signal, saying the country needs to be careful with the excess capacity in the coal power sector. So, there's a notice from the NDRC which conflicts the risk alert from NEA. It's a bit complicated in terms of the future development of coal power sector in China. But anyway, there is no coal phaseout policy. There's no clear policy on this. I think Chinese coal power sector will put a huge pressure on the future carbon emissions, not only in China but also internationally. China is the number one emitter in the world in terms of carbon dioxide. And Japan is the number five. So, this leads to my second question to you. So, the carbon emissions in Japan. Can you say something about the trend of the carbon emissions in Japan's coal power sector? I wonder what's your view on this?

u  Professor: The total CO2 emission in Japan is decreasing, comparing to a couple years ago. But compared to 1990, haven’t changed so much. That means from 1990, Japan has increased CO2 emission. And Japan has decreased CO2 emission over the last 10 years. So, the emission, reduction compared to 1990 is just below 1990 level. That means Japan hasn't done anything since 1990. So that's a problem. I want to talk a little bit about China as well. I think that, as you mentioned, the coal issue in China is global issue at the same time. I remember that during the financial crisis in 2009, China expanded its coal fire power plants and invested a lot of money in coal-fired power plant to make the economic recovery at that time. Global society is looking to do something different this time. But I'm sorry to hear that, of course, the central government and the local government have different incentives. I also understand that some conflicts between those two authorities. But I hope China will recover in the green way this time in comparison of 2009. And I understand it's not so easy to make an easy recovery from economic downtown. To invest on infrastructure like coal-fired power plant is an easy way out. I hope policy makers in China to make wise decisions this time. Of course, we have to do a lot of thing in Japan too. Our both countries need to many things.

u  Lin: I'll leave the responsibility of China and Japan to our last section. I'll continue with your comments on China's future coal power development. Since I mentioned just now. We have the conflicting signal from the two Chinese administrative bodies, the NEA and NDRC. They are sending the conflicting signal, which means the recovery after this pandemic is still uncertain for coal power sector. I think there's a dilemma there for the policy makers. Currently, the 14th five-year plan is being made. And energy, economic, and climate goals will be discussed during the planning stage of the 14th five-year plan. But as I mentioned, this pandemic shifted energy authority’s policy on coal power development in the 14th five-year plan, or make it a tough choice for the policy makers. The 14th five-year plan will be unveiled in the next March time. So that will be still time for the central policy makers to find the balance in economic, energy, and climate goals. I don't have a certain answer for this issue, but I should say it's been discussed. And the future policy on coal power is still uncertain.

u  Professor:I'm very happy to hear that the NDRC is quite positive on climate change now or renewable energy replacing coal. I used to think that NDRC is supporting the coal industry. Let me talk about Japan a little bit. We also have Energy Basic Plan, which defines the Japanese energy mix, or CO2 emission target as well. Every three or four years we decide we make new Energy Basic Plan. Now we are talking about the new energy basic plan to be decided next year. Now we just start talking about how much coal, renewable energy, natural gas should be in the energy mix.  The proportion of coal in current governmental target is 26% by 2030.  But everybody is saying that it's too much. We have to put a lot of pressure to the government to further reduce that number. But still it's not so easy. As you know, the big power companies are still very powerful. They have lot of money. They have a lot of business interest to keep nuclear and coal. We have to change that kind of structure at the same time when we talk about climate change.

u  Lin:  I see. So, I have a question in terms of the coal phaseout. I know it's still far away for both countries. But is there any discussion? You mentioned the 20 something, a target by 2030 in the basic energy plan. But is there any discussion of coal phaseout from the government or from the scholars or the civil society groups?

u  Professor: From the government? No. Researchers, including myself, or civil society groups have kind of proposed a couple of future plans between 2050 and 2030. Most of them say we can do without nuclear and without coal fired power plant in 2030. Because we have to keep natural gas to some extent. But we can see more renewable energy in 2030.  The point is how much we will focus on the demand, and how much we will focus on the installation of renewable energy, especially the solar and wind power. Governmental addition of the solar power installation in 2030 is too little. Actually, government has admitted that the installation is too small. Therefore, they are going to increase the proportion of solar power in 2030. Wind power is also getting attention not only by the government but from by the company. They are putting a lot of money on offshore wind power especially now in Japan. So, we will see more renewable energy in 2030. And we will see maybe the coal fired power plant. We are saying we don't need it anymore. But government want to keep it. But anyway, we made daily, concrete calculation how much capacity we need in 2030. If we mix renewable energy decreased with energy consumption or flexibility or demand side management, those kind of mitigation and response, we can manage without coal fired power plant and nuclear in 2030. That is the proposal made by quite a lot of civil society groups or researchers. So, we have to make this voice louder and louder to convince not only policy makers but general public. Because people in general fear blackout. And they understand if we can eliminate coal fire power plant and nuclear power, we will have big blackout or a shortage of supply. But, as a researcher, we are trying to say that we have ample supplies at this moment. And in 2030 we have more flexibility measures to cope with the shortage of supply. So that's the kind of biggest issue at this moment That's a very critical issue for Japan now.

u  Lin:I see that's a really critical thing to think from all walks of society. But you mentioned the renewable energy just now. It seems like there are still challenges, therefore, the renewable energy development in Japan. So, what do you see as the biggest challenge for the renewable energy development? Is it from the government? I mean the subsidies are from the power companies. Or the public, they fear of renewable energy might give them inconsistent energy supply or something. What do you see the biggest challenge?

u  Professor: It mixes of everything. For the government, they do have policy to introduce or to facilitates the installation of renewable energy. But at the same time, they have a policy to stop the installation of renewable energy. For example, now Japanese governments are introducing so-called capacity market. Maybe people not so familiar with the word - capacity market. Capacity market means we have to put a subsidy for existing nuclear power plant and coal fire power plant to keep their plants working. Just in case in the future the shortage of the power will happen. So, to stop the future shortage of the power, there should be government keep on saying that there should be some subsidy for existing coal fire plant and nuclear power plant. So the money that goes to those existing coal fired and nuclear power plant is subsidy. It's not so good when you talk about renewable energy or CO2 emission reduction. That isn’t great. But at the same time, Japan's government is introducing subsidy for wind power, for example. So, there's a conflict even in the governmental policy. And for the market, people are still skeptical about the future with the renewables. Supply cost of the renewable energy is still high, comparing with international price due to many reasons. Such as construction, human resources, and some governmental policies. Still, many people believe renewable energy is expensive in comparison of conventional energy. So, we have to change that kind of mindset. We are saying that internationally the cheapest energy is solar or wind power. That is consensus of the global society. But that is not the consensus in Japan yet. So, we have to change that kind of mindset of Japanese people.

u  Lin:  There are still lots of work to do to convey the idea of the benefits of having more renewable energy economically or environmentally. That's a long way to go. Not only there by here in China too. Can I have your ideas on Japan's role in the regional energy transition? If you have time, you can say something about China's role in the regional energy transition. You can speak about, I mean, eastern Asia. It’s okay if you want to include southeast Asian or South Asian area.

u  Professor:  So let me talk a little bit from global perspective. We cannot avoid talking about the US presidential election, which is coming soon. I'm not sure who will win. But if Joe Biden wins the election and becomes the president, the total picture will change. They will push the Green New Deal and send us a political stance. Those people who are quite positive or progressive on the new deal will be with Mr. Biden. So, the US policy on climate change and energy will change drastically. That is our hope. And if the US changes, Japan should change too. I'm looking for the changes in the state that we have big pressure or incentives for Japanese government to change its policies. So, at this moment, there's no such kind of good news happening in Japan. But if, Mr. Biden, he wins the coming election, I think that many things will change in Asian countries as well.

u  Lin: Yeah, that's a good point. But also, could you say something about, for example, the coal power companies in both countries? They're not developing that much in their own countries. But they expand the coal power sector overseas to southeast and south Asian countries.

u  Professor:I think that exporting coalfired power plant to other countries is a big issue. As you know, Japan, Korea, and China are using public money to make technology transfer, coal fired power plant, to other Asian countries. That is a problem as well. Let me tell you something about what is happening now in Japan on this issue. In Japan, civil society groups, young people and NGOs are quite active on this issue. They are doing a lot of activities. For example, a lot of the power companies, trade companies, or banks invest a lot of money in export of Japanese technology, coal fired power plants too. Some companies and banks change their policies on investing or putting money to this kind of activities. It's not speedy enough. But I think the companies will feel that there is a lot of pressure amounting in the world for them to make change on this behavior. So that has led to the decision making of the government as well. As you mentioned, the Japanese government decided to close part of the coal fire power plant in Japan. This is not enough. We have to make more speedy energy transition in Japan. But it's happening. That is a good kind of hope, a small hope that is better than nothing.

u  Lin: Yes. I think the environmental NGO societies are really concerned about the three east Asian countries’ leakage issue of the coal power sector to other countries. For China, that's the belt and road initiative. I think for Japan and South Korea, that is the overseas development of infrastructure etc. Good! So, I think that's all of the questions we have for you. Any questions for us?

u  Professor: I have one comment and one compliment. One comment is that Korean government just published Korean new deal. Do you know the Korean new deal? You can download from the internet. It's written in English. That is very good. It’s complete, concrete, and specific in English. So…and how many money should be invested in which area and how many people will get employed. It’s divided into three sections -digital new deal, green new deal and just transition. So it's a very good textbook for green new deal. I'm trying to mimic or imitate the Korean new deal for Japanese green new deal. Because we can learn a lot from Mr. Bernie Sanders’ US green new deal, or EU green deal. But Korea green new deal is quite good. This is my observation. Canadian industry group also propose some green new deal. That is also very good. So we are now trying to catch up. I'll try to run those kind of existing green recovery plans to make Japanese version of green recovery and green new deal. That is my task at this moment.

u  Lin: That's great work. And thanks for the information of the Korean and Canadian side. I think we'll follow up with those two countries’ green new deal. And this give us a really good topic for the next podcasts. Because we have the connections with Korean side of researchers and NGOs. We can put an interview on Korean green new deal for the next podcast programme. Do you think it’s a good idea?Thank you very much, professor for joining us. It's really good discussion with you in terms of the Japanese coal power sector. And hopefully we can see each other soon after the pandemic. So, take care professor.

u  Professor: Thank you very much. And I think that Chinese civil society is very important in many senses. So, I'm looking forward to hearing more from you on many issues.