Japan’s Coal Power Generation Climbs as War Makes LNG Expensive
(Bloomberg) -- Japan’s coal-power generation is rising while natural gas-fired output falls, as conflict in the Middle East chokes supplies of the less-polluting fossil fuel and sends prices higher.
The 30-day moving average for coal generation across Japan’s main islands was up 17% on Tuesday compared with the same period last year, and has been consistently higher since late-March, according to utility data compiled by Bloomberg. Natural gas was 10% lower, the figures show.
The crucial Strait of Hormuz has remained effectively closed since the Iran war started in late February, curbing energy shipments from a region that typically accounts for a fifth of global liquefied natural gas supply. An attack early in the conflict on the world’s biggest LNG production plant in Qatar has added to the squeeze and prompted buyers to scramble for alternative supply.
Japanese utilities have reduced dependence on LNG from the region over the past several years. Supply from Qatar and the United Arab Emirates only made up around 6% of the country’s total in 2025, compared with 25% a year earlier, according to ship-tracking data from analytics firm Kpler.
Still, that hasn’t spared Japan from the broader impact of rising fuel-import costs. Many power producers secure LNG on long-term contracts linked to oil prices, which have surged since the conflict began. Importers must at times secure spot cargoes, which have also become expensive. That has led to higher spot power prices in the country.
Total coal-power generation for Japan’s Kansai region — home to many factories and manufacturing bases — was at 56,624 megawatt-hours on Tuesday, the highest level since March 13, according to data on Bloomberg. A recent nuclear power plant outage in the area could also be contributing to the need to ramp up other power-generation sources.
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