Tohoku Electric Power Company, Japan’s third-biggest user of coal for thermal energy, says that it is looking to increase coal imports from the United States and Canada, this to cut costs and at the same time decreasing the utility’s reliance on Australian exports. The utility is set to nearly double coal purchases from North American sources after the announcement, looking to get from US and Canada around 5 percent of its total needs.
According to Takayoshi Enomoto, group manager of the company’s fuel department, Tohoku Electric is considering “several promising” coal suppliers from the US and Canada. “Even as Australia has established a permanent position as a main supplier, we regret we have been heavily depending on it,” Enomoto said. Boosting coal imports from North America may actually improve the Japan’s bargaining power with Australian sellers, prompting them to reduce prices. With Japan’s nuclear power facilities still on enforced hiatus, and with no end still in sight to the pressure from the Japanese public to turn its back on nuclear energy, the Japanese government is forced to look towards standard fossil fuel alternatives for thermal energy.
Coal is one of the prime options for thermal energy, but the Japanese government is asking the utility companies to start paying lower prices for coal, shale gas, and other such options. As such, Tohoku Electric will not be alone in chasing cheaper coal prices from the US. Kansai Electric Power Company and Kyushu Electric Power Company have already signed a one-year agreement in November 2012 to jointly import 1 million tons of coal from Oxbow Carbon LLC, in Florida. Australian suppliers are sure to take notice of this new development, and there will be no choice but to keep their prices competitive if they still hope to retain contracts with Japanese utilities.
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