Japan plans to offer loans to power producers in the U.S. and Australia that buy so-called clean coal generators from Japanese manufacturers, according to a government document obtained by Bloomberg News.
Funding from state-owned Japan Bank for International Cooperation would help drive sales of the plants that cost about $3.1 billion apiece, said a senior trade ministry official involved in producing the 113-page draft plan, due to be released today. The ministry said in an e-mail it will brief the media on a report about clean coal at 4:30 p.m. in Tokyo.
Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. compete with General Electric Co. and Germany’s Siemens AG to supply plants that convert coal into gas before generating power, making it easier to trap carbon-dioxide emissions. Japan wants to benefit from new demand for clean energy after world leaders including U.S. President Barack Obama pledged to back technologies that reduce gases blamed for global warming.
“The government’s marketing campaign will be a big plus for Mitsubishi Heavy in the competition to capture the market for ‘green technology,’” said Futoshi Usui, a Tokyo-based analyst at Credit Suisse, who rates the stock “outperform”.
Mitsubishi Heavy climbed 1 percent to close at 405 yen in Tokyo after earlier gaining as much as 3.2 percent. It was the fourth-biggest mover on the 124-member Topix machinery index. Hitachi gained 1.6 percent to 314 yen.
Loan Package
Japan Bank may offer a package of loans to overseas projects that also would fund purchases of Japanese-made technology to capture and store carbon emissions from the plants, said a spokeswoman who can’t be named because of the Tokyo-based lender’s internal rules.
The trade ministry will send delegations to Australia and the U.S. to discuss potential sales, said the ministry official, who declined to be named until the plans are made public.
Shinsuke Kitagawa, director-general of the ministry’s natural resources and fuel department, will visit Australia next week, the official said. Kitagawa couldn’t be reached for comment at his office.
Japan is considering financing a clean-coal plant to be operated by Queensland state government’s ZeroGen Pty Ltd., the official said. Mitsubishi Heavy Industries said June 12 it is in discussions with Queensland’s government to build the project.
The Queensland government is in talks with Mitsubishi about collaboration on the project, though no decision or agreement has been reached, a spokesperson for the Department of Employment, Economic Development and Innovation said via e-mail. Overseas investment in ZeroGen would be “strongly welcomed,” said the spokesperson who asked not to be identified citing internal rules.
‘Welcome Backing’
“We would welcome the government’s backing if any and it’s aimed at boosting exports of Japan’s technologies,” Hideo Ikuno, a Tokyo-based spokesman for Mitsubishi Heavy, said by telephone.
Trade ministry representatives will hold discussions in July with U.S. energy department officials in Washington, the official said. President Obama is reviving the stalled FutureGen clean-coal power-station project in his home state of Illinois.
The plants made by Japanese companies use a process known as Integrated Gasification Combined Cycle, which turns coal into gas. The generators are designed to cut emissions of sulfur dioxide, particulates and mercury and increase fuel efficiency. They can also make it easier and cheaper to separate carbon dioxide, the main greenhouse gas, from other gases.
Mitsubishi Heavy’s Ikuno said combining IGCC with carbon capture and storage, in which carbon is trapped and stored underground indefinitely, can cut as much as 90 percent of carbon dioxide emissions from coal-fired power plants.
Hitachi spokesman Takeshi Kawakami declined to comment on the impact of government policy on the company. The company has joined forces with Electrabel SA and E.ON AG in operating experimental carbon-capture and storage plants in Europe, while Japan’s Electric Power Development Co. has used Hitachi-made IGCC technology in its pilot plant in Japan.
Japan’s trade ministry estimates a 500-megawatt power station employing both technologies would cost about 300 billion yen ($3.1 billion).
Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. compete with General Electric Co. and Germany’s Siemens AG to supply plants that convert coal into gas before generating power, making it easier to trap carbon-dioxide emissions. Japan wants to benefit from new demand for clean energy after world leaders including U.S. President Barack Obama pledged to back technologies that reduce gases blamed for global warming.
“The government’s marketing campaign will be a big plus for Mitsubishi Heavy in the competition to capture the market for ‘green technology,’” said Futoshi Usui, a Tokyo-based analyst at Credit Suisse, who rates the stock “outperform”.
Mitsubishi Heavy climbed 1 percent to close at 405 yen in Tokyo after earlier gaining as much as 3.2 percent. It was the fourth-biggest mover on the 124-member Topix machinery index. Hitachi gained 1.6 percent to 314 yen.
Loan Package
Japan Bank may offer a package of loans to overseas projects that also would fund purchases of Japanese-made technology to capture and store carbon emissions from the plants, said a spokeswoman who can’t be named because of the Tokyo-based lender’s internal rules.
The trade ministry will send delegations to Australia and the U.S. to discuss potential sales, said the ministry official, who declined to be named until the plans are made public.
Shinsuke Kitagawa, director-general of the ministry’s natural resources and fuel department, will visit Australia next week, the official said. Kitagawa couldn’t be reached for comment at his office.
Japan is considering financing a clean-coal plant to be operated by Queensland state government’s ZeroGen Pty Ltd., the official said. Mitsubishi Heavy Industries said June 12 it is in discussions with Queensland’s government to build the project.
The Queensland government is in talks with Mitsubishi about collaboration on the project, though no decision or agreement has been reached, a spokesperson for the Department of Employment, Economic Development and Innovation said via e-mail. Overseas investment in ZeroGen would be “strongly welcomed,” said the spokesperson who asked not to be identified citing internal rules.
‘Welcome Backing’
“We would welcome the government’s backing if any and it’s aimed at boosting exports of Japan’s technologies,” Hideo Ikuno, a Tokyo-based spokesman for Mitsubishi Heavy, said by telephone.
Trade ministry representatives will hold discussions in July with U.S. energy department officials in Washington, the official said. President Obama is reviving the stalled FutureGen clean-coal power-station project in his home state of Illinois.
The plants made by Japanese companies use a process known as Integrated Gasification Combined Cycle, which turns coal into gas. The generators are designed to cut emissions of sulfur dioxide, particulates and mercury and increase fuel efficiency. They can also make it easier and cheaper to separate carbon dioxide, the main greenhouse gas, from other gases.
Mitsubishi Heavy’s Ikuno said combining IGCC with carbon capture and storage, in which carbon is trapped and stored underground indefinitely, can cut as much as 90 percent of carbon dioxide emissions from coal-fired power plants.
Hitachi spokesman Takeshi Kawakami declined to comment on the impact of government policy on the company. The company has joined forces with Electrabel SA and E.ON AG in operating experimental carbon-capture and storage plants in Europe, while Japan’s Electric Power Development Co. has used Hitachi-made IGCC technology in its pilot plant in Japan.
Japan’s trade ministry estimates a 500-megawatt power station employing both technologies would cost about 300 billion yen ($3.1 billion).
Source: Bloomberg
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