March 18, 2019 Read More →

Japanese investors moving away from coal in ‘monumental’ shift

The Guardian:

Major Japanese investors, including those most indebted to coal, are seeking to back large-scale renewables projects across Asia, marking a “monumental” shift that energy market analysts say is “the start of the end for thermal coal”. At the same time, Japanese banks and trading houses are walking away from coal investments, selling out of Australian mines and scrapping plans to build coal-fired power.

Japan is Australia’s largest export customer for thermal coal. Of the proposed pipeline of coal power projects in Japan in 2015, figures from the Global Coal Plant tracker show three-quarters are now unlikely to proceed.

The most recent proposal likely to be shelved, a 1.3GW coal-fired power station in Akita, in Japan’s north-west coastal region, follows the cancellation of two others earlier this year. Sojitz Corporation this week announced further divestment from thermal coal, following Itochu announcing a coal exit last month, and Mitsui in November.

Sources in the Asian renewable and energy finance sectors say Japanese banks, trading houses and two prominent state-backed enterprises – the Japan Bank for International Cooperation and Japan International Cooperation Agency – have in recent months expressed their intention to invest more heavily in the renewables sector.

Tim Buckley, the director of energy finance studies for the Institute of Energy Economics and Financial Analysis, said any shift in Japan was monumental for the rest of Asia. “This is the start of the end for thermal coal,” Buckley said. “When Japan moves, it’s not just Japan. It is … our number one thermal coal customer, but it’s also the funder of the growth agenda that the coal industry has been relying on.”

Buckley said coal-fired power in developing Asian countries required government underwriting to attract significant private financial investors. Such projects would be looking to JBIC, JICA and the Korean equivalent, the Export-Import Bank of Korea, which has also made significant recent moves into the renewables sector.

More: Energy analysts forecast ‘the end of coal’ in Asia as Japanese investors back renewables

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