Expansion Of Japan’s Coal Fleet Could Strand $56 Billion

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A new report has found that Japan’s planned expansion of its coal-fired generating plants could strand anywhere from $76 billion to $56 billion worth of assets.

Specifically, despite increasing global focus on renewable energy development, Japan is still planning a massive expansion to its fleet of coal-fired generating plants, in which 49 planned coal-fired plants comprising 28 GW are now in various stages of planning (though only four plants combining to total 1.9 GW are currently under construction). Continuing along this path will not only harm the country’s environmental image and hinder any carbon emission targets, but will also end up costing billions of dollars in stranded assets.

The new report from the Sustainable Finance Programme at the University of Oxford’s Smith School of Enterprise and the Environment examined the potential impact of stranded coal assets in Japan by creating three scenarios — where coal-fired power stations are stranded over 5-year, 10-year, and 15-year time frames; specifically, where coal-fired power stations become stranded assets by 2021, 2026, and 2031. The authors of the report “selected these three periods to reflect the different speeds and scales at which the risk factors identified in this report could realistically materialise.”

The results of the report are astonishing: In the 5-year scenario, where coal-fired power plants become stranded assets by 2021, the total value of stranded coal assets in Japan are estimated to be around ¥8,453 billion ($76 billion). In the 10-year/2026 scenario, this value increases to ¥8,924 billion ($80.2 billion); and in the 15-year/2031 scenario the value decreases to ¥6,857 billion ($61.6 billion).

However, of greatest importance is the value of stranded assets that have been built after 2016, highlighted in the 10-year and 15-year scenarios. Specifically, the total value of stranded coal assets which are built after 2016 in the 10-year scenario amount to ¥6,223 billion ($55.9 billion), while the total value in the 15-year scenario is ¥5,307 billion ($47.69 billion).

The report, Stranded Assets and Thermal Coal in Japan: An analysis of environment-related risk exposure (PDF), is likely the most up-to-date and comprehensive analysis of Japan’s exposure to coal-related stranded assets. Factors impacting the highly uncertain future of Japan’s power generators are many: “climate change policy and renewables subsidies, the prospect of nuclear restarts, energy efficiency, and macroeconomic factors like low levels of population and GDP growth.” These myriad future uncertainties could have huge impacts on Japan’s current plans to expand its coal-fired fleet, potentially exposing the industry and its corresponding billions of investment dollars to “unanticipated or premature write-downs, devaluations, or conversion to liabilities.”

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Joshua S Hill

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.

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11 thoughts on “Expansion Of Japan’s Coal Fleet Could Strand $56 Billion

  • Stupid is as stupid does. Build a coal plant, then tear it down.

    Japan should invest in geothermal, CSP with storage, and PV, plus some wind. They can get going quicker that way.

    .”Japan has enormous renewable efficiency resources,” said Amory Lovins of the Rocky Mountain Institute, who also attended the symposium. “Japan has about 9-times Germany’s high quality renewables but gets only 9th as much as its electricity from renewables as Germany does.

    “If real competition is allowed in deregulation, then I think Japan will be a world leader.”


    • Some pumped hydro storage would go well in that mix, also.

  • The Japanese version of Hinkley Point C, only with coal.

    • The mechanism is different. In Britain, it’s Whitehall mandarins and Westminster politicians living in a bubble. No domestic generating company wants to build Hinkley C, they had to go to EDF and the Chinese. In Japan, it’s reactionary regional utilities, monopolies on the awful American silo model. They pushed for nuclear, and now that’s flopped they are going for coal as second best. They hate the idea of competing distributed generation.

  • It would suck to invest in a new one of those today.

  • Japan! You are one of my favorite countries in the wordld! This is costing you points! Lol

  • Great. They used to generate 30% of their electricity from nuclear – now “stranded” assets, assets that didn’t pump out pollution. Well done fear mongers.

    • You congratulate the wrong people.

      It should be “Well done, you idiots who ignored the information that you were siting a nuclear plant in a known tsunami zone”.

    • Unless if Japan can get an attitude like the Chinese or Koreans (who build nuclear cheap). I don’t see how they will restart those reactors any time soon or build new ones to replace them.

      • They’re junk reactors. 1950s American designs. The American designs are crap and the Russian designs are worse. The French designs are bad *enough* and they’re a lot better.

        the Japanese government’s reaction to poisoning the ocean and a large hunk of their very limited supply of agricultural land…. coverups!

  • What is WRONG with the Japanese government? How come they have not elected a government which is not made up of criminals and fools? Spain is moving much faster. How did Japan re-elect the teetering, corrupt, ineffective LDP AGAIN?

Comments are closed.