Toshiba will stop taking orders for new coal-fired power plants and boost revenue from renewables by 242 per cent over the next decade amid global pressure to tackle climate change.
The decision by the Japanese industrial conglomerate comes as the country is struggling to reduce its reliance on coal even as new prime minister Yoshihide Suga has pledged carbon neutrality by 2050.
Siemens Energy also announced this week that it would no longer participate in new tenders for coal-fired power plants, while General Electric made a similar commitment in September.
At a news conference on Wednesday, Nobuaki Kurumatani, Toshiba’s chief executive, said the decision was driven by a global shift towards renewables, pointing to US president-elect Joe Biden’s pledge to put clean energy at the centre of a $2tn plan to revive the US economy.
“There is clearly going to be a paradigm shift in the global energy sector,” Mr Kurumatani said. “We believe we can maintain our competitiveness in renewable energy as well.”
Companies have faced increasing pressure from investors and environmentalists over their involvement in fossil fuel projects with South Korean and Japanese groups coming under fire over their support for a new coal-fired power station in Vietnam.
As part of its shift away from coal, Toshiba plans to increase its annual investment in renewables fivefold to ¥160bn ($1.5bn) by the 2022-23 fiscal year. It will also aim to boost renewables-related revenue from ¥190bn to ¥650bn within a decade, of which 35 per cent will come from solar and wind power.
Orders for new coal-fired power stations, which will emit carbon for many decades, had already been declining sharply at Toshiba with revenue from new orders expected to fall about 67 per cent from two years ago to ¥35bn during this fiscal year to end-March.
But the company would honour contracts with existing customers and complete work for 11 coal-fired power stations, it said.
Japan has strengthened commitments over the past year to reduce its heavy dependence on fossil fuels with a pledge to no longer finance new coal power stations in developing countries.
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The economy ministry has also announced its wish to phase out dozens of old and inefficient coal-fired domestic power plants.
But the shift away from coal would not be easy, especially with nuclear power unavailable following the 2011 Fukushima Daiichi nuclear disaster, analysts said.
Japan’s reliance on coal, for example, rose from 28 per cent of electricity supply in 2010 to 32 per cent in 2018, even as other countries reduced their dependence on the fuel.
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