The future of coal-fired power is looking bleaker than ever in the face of the current trend of reduced carbon emissions. Case in point, Japan-based industrial equipment manufacturer Toshiba has announced that it will stop all its future constructions of coal-fired power plants and refuse all client orders for said plants while stepping up its renewable energy strategy.
Toshiba is a major global manufacturer of power generation equipment. The two machines in the Taichung Power Plant are made by Toshiba, which maintains about 10 ongoing power plant projects around the globe. Toshiba Director Nobuaki Kurumatani states that the company will refuse all orders for building new coal-fired power plants going forward and make an attempt to cut its greenhouse gas emissions by half by 2030.
Kurumatani indicates that Toshiba will increase its renewable energy investment in offshore wind power, PV infrastructure, and next-generation technical R&D. Seeing as how demand for coal-fired power plants are currently in free fall, Toshiba has planned to more than triple its renewable energy revenue within the next 10 years.
Toshiba’s renewable energy revenue for the 2018-2019 fiscal period reached about ¥190 billion. This figure is projected to rise to ¥350 billion in 2024-2025 and finally to ¥650 billion in 2029-2030, a significant increase. By that time, Toshiba will likely have invested ¥160 billion in CAPEX.
There are about 140 coal-fired power plants in Japan, accounting for about 30% of the nation’s total electricity supply (behind only natural gas) and meeting 38% of the total demand. Furthermore, after the Fukushima nuclear disaster in 2011, Japan has since come to rely on coal-fired power to a greater degree. However, even prior to Toshiba’s announcement, Japanese prime minister Yoshihide Suga had stated that year 2050 represents the deadline for Japan, which happens to be the third largest economy in the world, to achieve carbon neutrality. Suga hopes the country can meet said deadline, thereby fulfilling the promise it made in response to the global climate change.
The Japanese government is aiming to raise the domestic share of renewable energy to 25% and reduce fossil fuel power to 50%. On the other hand, Japanese chief cabinet secretary Katsunobu Kato indicates that carbon neutrality is beneficial to both the economy and the environment. Not only is carbon neutrality no longer a constraint to business growth, but it also provides an avenue for healthy competition.
Incidentally, Japan-based Mitsubishi Heavy Industries, German-based Siemens, and U.S.-based GE have also respectively made similar promises to either reduce or exit coal-fueled power plant manufacturing.