Opportunities for Japanese manufacturing firms to export electricity to the grid in the face of prohibitive global LNG prices
Japan remains the Asian country with the highest electricity and Liquefied Natural Gas (LNG) prices. Electricity prices in Japan have increased substantially in the post Fukushima years because of increased natural gas usage for electricity production. LNG demand and prices in Japan for the past five years have been increasing and the forecast for the next 10-15 years shows that the situation is not going to change. Several factors will affect LNG prices and demand forecasts such as the export of US gas before the end of the decade, China’s shale gas development, and more open and transparent LNG spot market trading and potential additional LNG liquidity in the market. Additionally, on top of this a rapidly ageing population in Japan and perhaps most importantly is the future of nuclear energy, a very divisive political issue.
Enerdata has run three different scenarios on % nuclear power plants back online and identified the forecast outlook on the fuel mix for power generation in Japan for the next 5-10 years. The analysis shows how LNG and natural gas will still play a key role in the country’s energy mix and how large Japanese companies have found a solution to rising costs. At the same time we will have examined what opportunities are available for smaller and mid-size Japanese manufacturing companies.
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