Japan's natural disaster will boost demand for LNG imports.

20 March 2011
Written by: Nicholas Newman

Japanese power sector

The Japanese Tohoku-Chihou-Taiheiyo-Oki earthquake and tidal wave that overwhelmed the North East coast of Japan, hit the Japanese power sector hard. It has resulted in substantial damage to the country’s electricity generation and distribution networks, which has resulted in cities throughout the country experiencing rolling blackouts.

The natural disaster knocked out the 5000 MW nuclear power station at Fukashima. Experience suggests it will take several years to bring back online this atomic power plant that was nearing the end of its operating life.

Therefore, it is more likely that its owners the Tokyo Electric Power Company is expected at least in the short term to replace the Fukashima plant capacity with new gas fired power stations, given the lengthy time span it takes to plan, design and construct a new nuclear power station. The recent disaster is also likely to delay the commissioning of new nuclear plants due to come on-stream over the next decade, as part of Japan’s plans to replace many of its ageing power stations.

In the meantime, Japan’s power sector, which last year imported a record 70 million tonnes of LNG, has announced that it plans to increase its gas imports immediately by an additional 4.5 million tonnes of LNG. Already, Russia has offered to supply extra gas from its Sakhalin fields in this emergency to Japan to boost power production from existing gas-fuelled power plants. However, Japan is expected to purchase additional spot cargoes from Qatari, North American and the Atlantic gas producers. This may boost natural gas prices around the world.

KEY FACTS About Japan’s Power Sector

Japan in 2007 had 248 GW of installed generating capacity.

  • 25% of electricity is from nuclear power.
  • 29% of electricity is from gas power stations.
  • 28% from coal power stations.
  • 1.63% from non-hydroelectric renewable power sources.

Tokyo Electric Power Company owns 32% of Japan's total generating capacity.

Sources: Pennwell Global Review 2010

For latest news about Japan http://www3.nhk.or.jp/nhkworld/


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