Ministry of Economy, Trade and Industry to search for utilization of inefficient coal-fired thermal power plants ― Focus on how to utilize existing systems such as capacity market
On July 31st, the Ministry of Economy, Trade and Industry (METI) and Agency for Natural Resources and Energy (ANRE) began discussions on a system for securing a stable supply while promoting early reduction of inefficient coal-fired thermal power. METI and ANRE will further consideration on the ways to utilize inefficient coal, which was judged to be suspended, as supply capacity after a large-scale disaster. Issues such as giving incentives to business operators and consistency with the power generation capacity market where the first bid was made in July will be the point of discussion. In addition, how to utilize existing systems such as the power generation capacity market in order to secure a stable supply other than in the event of a disaster will be another focus.
It was discussed at the system working group (WG Chair = Dr. Akihiko Yokoyama, Professor at Graduate School of the University of Tokyo) of the “Advisory Committee for Energy and Natural Resources” (an advisory body of METI). Both regulatory measures and induction measures will be examined consistently including the time axis, for the early reduction of inefficient coal-fired thermal power. Regulatory measures will be discussed in the joint Working Group (WG) of the Energy Conservation Subcommittee and the Electricity and Gas Basic Policy Subcommittee, which discuss power generation efficiency standards based on the Energy Conservation Law. Among the induction measures, the discussion on securing a stable supply was held at the System Working Group, and its discussion kicked off on July 31st.
In the early reduction of inefficient coal-fired thermal power, it is forecasted that some business operators will choose to shut down rather than abolish the power plant. The focus will be expected on how to utilize that supply capacity when supply capacity is insufficient. From business operators who participated as an observer, there were opinions that “Value of the suspension should be clarified” (Takkyo Gas), “It is rational to utilize the supply capacity which will be buried due to the suspension” (Chubu Electric Power). In that case, the consistency with the existing systems such as the power generation capacity market is also required. There were some specific opinions such as study on the “strategic power reserve” adopted in Germany, proposed by Ryoichi Komiyama, Associate Professor at Tokyo University Graduate School. These issues are expected to be discussed in detail from the next meeting.
On the other hand, discussion on regulatory measures started on August 7th at the “Working Group on coal fired thermal power” (Chairman = Riki Oyama, Professor at Yokohama National University Graduate School) established jointly by the Energy Conservation Subcommittee and the Electricity and Gas Basic Policy Subcommittee.
WG considers the review of the target of coal power generation efficiency (41%) in 2030 specified in the Energy Conservation Law and the introduction of other regulatory measures. The focus will be on how to think about improving power generation efficiency by biomass co-combustion and consideration for private power generation will also be noticed. Interview for business operators will be conducted from late August to September to determine the direction of the discussion.
The Energy Conservation Law required power generation companies to set the power generation efficiency of their own thermal power to the highest level, as a benchmark target for FY2018. Coal-fired thermal power has been achieved by more than 50% of businesses operators, and the committee members commented, “It is important to raise the target” and “It is natural to review the target”. On the other hand, 18 out of 28 small business operators with a total capacity of less than 500,000 kW exceeded the target, while for large-scale business operators with over 1500,000 kW, only 3 out of 10 exceeded the target. This is because the effect of power generation efficiency improvement due to biomass co-combustion becomes larger for smaller-scale facilities in terms of calculation, and how to handling this matter will be the one of the issues. In addition, treatment will be examined for business operators who consume power generated by themselves.