- Higher coal usage to reduce need for LNG, METI says
- Japan LNG stockpile equal one year of supply via Strait of Hormuz
- Japan, others should opt for more nuclear power, IEA chief tells industry minister in Tokyo
TOKYO, March 27 (Reuters) - Japan's industry ministry will relax rules for one year to increase the use of coal-fired power plants in the fiscal year starting April, as the U.S.-Israel war with Iran adds uncertainty to liquefied natural gas imports, it said on Friday.
Japan takes delivery of some 4 million metric tons of LNG annually - or around 6% of its total imports - via the Strait of Hormuz, which has been effectively closed due to the war.
"There is increasing uncertainty about future LNG procurement. We believe that it is necessary to increase the operation of coal-fired power plants and save LNG fuel," an industry ministry official told a special government panel.
The Ministry of Economy, Trade and Industry proposed suspending for one year its 50% cap on the capacity utilisation rate of coal-fired power plants with generation efficiency below 42%.
LNG consumption could then fall by about 0.5 million tons a year, or slightly more than 10% of the LNG it imports via the Strait of Hormuz, according to a METI's estimate.
The ministry will implement the change from April 1 as an emergency measure and there were no objections from the panel members, the official told Reuters.
"This is strictly a short-term adjustment and does not alter our long-term decarbonisation policy," he said.
Japan has an LNG stockpile of around 4 million tons, METI data showed. Its thermal power generation largely depends on LNG and coal, with a small portion covered by oil, with electricity also being generated from nuclear power and renewable energy.
So far, Japan has restarted 15 nuclear power reactors of 33 which remain operable after the Fukushima Daiichi disaster in 2011.
In other emergency measures to address the supply crisis, Japan opened up its oil stockpiles, rolled out gasoline subsidies and sought alternative energy supplies outside of the Middle East.
"I believe after this crisis is over in Japan and in the world, the nuclear industry will get an additional push in order to increase domestic energy production," International Energy Agency chief Fatih Birol told industry minister Ryosei Akazawa after meeting Prime Minister Sanae Takaichi on Wednesday.
In Tokyo, Takaichi asked Birol for an additional coordinated release of oil stockpiles, after Japan decided to release about 50 days worth of its oil consumption, as over 90% of its oil supplies stopped with the Strait of Hormuz shipments suspension.
Reporting by Yuka Obayashi and Katya Golubkova; Editing by Himani Sarkar, Christopher Cushing and Arun Koyyur
Source: Reuters