The government announced plans to maintain its use of public aid to support exports of coal-fired power plants in part due to China's surging rise in energy production markets.
Coal-fired thermal power generation demand remains high in emerging countries across the Asia region, and China has been aggressively exporting its coal-energy know-how there. Without government assistance, Japanese companies fear they will be outpriced by their Chinese competitors, which could result in greater Chinese influence.
In Asian countries, demand for coal power plants is still high. There is demand in Southeast Asian countries for a capacity of 90 gigawatts by 2040 from new power plants, according to the International Energy Agency (IEA). This is the equivalent of twice the total output of coal-fired power plants in Japan.
Coal makes up a large proportion of many countries' power source composition plans. Indonesia plans to use coal to generate about 50% of its electricity requirements even as late as 2028. Other countries like India, Vietnam and Bangladesh also highly depend on coal-fired power for 30% to 40% of their electricity needs.
China, the world's second-largest economy, has steadily been improving its coal-fired power technologies. In around 2015, China started to export highly efficient plants that reduce carbon dioxide emissions by up to 80% to 90% of the levels of conventional plants. In Bangladesh and other countries, Japan and China are competing for major energy projects.
As part of its ambitious global economic strategy, dubbed the Belt and Road Initiative, China has been focusing on infrastructure exports to Southeast Asian nations. It is said that capital investment costs for Chinese-made infrastructure are about 20% lower than for that made in Japan, according to an industry official. In fact, public assistance such as yen loans and low-interest loans may be essential for the export of Japanese infrastructure.
How will Japan compete with China on energy while at the same time responding to the challenges of climate change? The government is required to find its balance on a narrow tightrope.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
