2024-12-17 06:40:00
JAPAN NUCLEAR: THE CHEAPEST
BLOOMBERG - Dec 16, 2024 - Nuclear power is forecast to be the cheapest baseload electricity source in Japan in 2040, highlighting the government’s desire to restart the nation’s idled reactors.
The cost of constructing and operating a new nuclear power plant for 2040 is estimated at 12.5 yen ($0.08) per kilowatt-hour, according to documents released from a trade ministry panel meeting on Monday. This cost assumes reactors will be used for 40 years at a 70% operational rate. The meeting was held to discuss the so-called levelized cost of electricity for each power asset, the document said.
A previous study published in 2021 saw LNG-fired power plants as the cheapest power source in 2030. However, the latest analysis includes a cost to reduce emissions, while fuel prices are also higher.
Intermittent renewable sources, like large-scale and residential solar, were priced lower than nuclear for 2040, the most recent report showed. However, when including the total system cost, including deployment of batteries, nuclear is cheaper than solar in some scenarios.
Japan is currently in the process of revising its national energy strategy, which will dictate its power mix targets beyond 2030. The government has doubled down on nuclear as a way to curb dependence on pricey fossil fuels.
The analysis released Monday also estimated LCOE of ammonia and hydrogen co-fired electricity, as well as pairing carbon capture and storage with LNG and coal power plants — technologies that the Japanese government is considering for its long-term energy transition. Co-firing with hydrogen boosted the cost of an LNG plant by about 6% for deployment in 2040, while CCS didn’t meaningfully change the price.
Japan spot power market update:
- Japan’s nationwide next-day electricity price declined 0.8% from a week ago to 12.45 yen/kWh on Monday
- Hokkaido area price jumped 21% from week prior to 14.54 yen/kWh, as freezing temperatures and snowy weather outlook point to increase in heating demand
- Eastern and western Japan have 50% chance of seeing lower-than-normal temperatures during the month-long period between December 14 and January 13, according to the latest forecast released by the Japan Meteorological Agency on Thursday
- Meanwhile, Kansai Electric Power Co. said on Thursday its Ohi No. 4 nuclear reactor will be taken offline for planned maintenance work; unit expected to be turned back online mid-February
- Baseload Tokyo power futures for December delivery on EEX settled at 14.35 yen/kWh on Friday, 1.8% lower w/w
- January contract at 15.13 yen/kWh, down 3.4% w/w
- Baseload Tokyo power futures for 1Q 2025 delivery on EEX settled at 14.47 yen/kWh on Friday, down 4.2% w/w
- 2Q 2025 contract at 13.83 yen/kWh, down 1.9% w/w
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