The decreasing costs of solar and wind energy could generate $71 billion in stranded coal assets in Japan by 2025, according to a new report from the Carbon Tracker Initiative, a financial think tank, and the University of Tokyo. Offshore wind power will be cheaper than coal in Japan by 2022, new solar cheaper by 2023, and onshore wind less expensive by 2025.
“Building coal power today equals high-cost power and fiscal liabilities tomorrow,” the report says. “Japan’s planned and operating coal capacity is partially protected by regulations that give coal generators an unfair advantage in the marketplace.”
The authors note that 42 percent of the global coal fleet likely became unprofitable last year, and that this could rise to 72 percent by 2040.
The price of offshore wind is already comparable to existing coal power in Japan, costing around $65 per megawatt-hour, and will become even cheaper in the coming years, with several large-scale offshore wind farms on track for completion as early as 2022. Japan had a total 55.5 GW of solar capacity last year, according to PV Magazine, and has the potential to reach 150 GW by 2030.