TOKYO : Japanese power utilities are stepping up efforts to cut thermal coal import costs by switching to lower quality grades and widening import sources, company officials said, as Tokyo looks to fight inflation and boost energy security.
Seven major regional utilities have already applied to raise electricity prices from April or June as the industry takes a hit from elevated costs of imported fuels, exacerbated by the weak yen. "Among various measures to improve efficiency, cutting fuel cost is the most important thing as it's so big," Hokkaido Electric Power President Yutaka Fujii said last month.
Japan bought 73 per cent of thermal coal from Australia and 7 per cent from Russia in 2022, against 73 per cent and 12 per cent in 2021, the country's trade data shows. As the price spread between Australian and European coal is wide, Japanese companies plan to increase imports from South Africa, a Tokyo-based coal trader said.
Hokuriku Electric Power, which like other Japanese utilities posted a record net loss in the nine month period ended Dec. 31 because of soaring import costs, will continue to seek high-grade coal"as much as possible," a company official said.