• LNG consumption by utilities was least in August in 5 years
  • Coal use increase due to cheaper cost and available capacity

Japan’s regional power utilities burned the most coal on record in August, flouting calls from the nation’s environmental minister to rein in use to control greenhouse gas emissions.

The nation’s 10 power utilities used 5.82 million metric tons of coal in August, the Federation of Electric Power Cos. reported Friday. That’s the most in monthly usage since the group started compiling data in April 1972. While total power generation and purchases fell 0.9 percent, liquefied natural gas use slid to the least in August in 5 years and fuel oil to its lowest level for the month in 6 years.

Japan’s environment minister said last month that he won’t support a new coal power station planned for central Japan as part of a push by the ministry to control greenhouse gas emissions. Coal consumption increased 19 percent between 2010 and 2014, largely due to the March 2011 Fukushima disaster, which led to the shuttering of the nation’s nuclear plants for safety checks.

“Coal is still the cheapest fuel source,” Ali Izadi-Najafabadi, a Tokyo-based analyst with Bloomberg New Energy Finance, said by phone. There is more coal plant capacity available this year than last year in Japan, he said.

By year’s end it will cost on average of about 4 yen (3 cents) per kilowatt hour to operate a coal-fired plant, compared to 9.6 yen for a gas-fired facility, according to data compiled by BNEF. Thermal coal at the port of Newcastle in Australia, the fuel’s biggest export harbor, closed at $59.48 a ton Sept 4, according to prices from Globalcoal. That’s near the lowest since May 2007.

Natural gas is typically used more in Japan during winter and summer when greater demand fluctuation occurs because gas-fired facilities can more quickly boost and lower production, Izadi-Najafabadi said.

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