*4.2. Implications of Solar PV in Coal Decommissioning*

Solar has its drawbacks in the form of cost and dependence on complementary flexible generators. The results show that in countries like Japan, where solar power remains to be more expensive than conventional generators—solar power presents an additional cost. Its dependence on flexible generators, which LNG currently fills, poses a threat to its ability to stand-alone. As the demand for LNG steadily increases, this will threaten its supply and price. The cost of LNG could exacerbate the cost problems of solar.

In Kyushu's case, increasing the solar capacity from 10 GW to 16 GW and 20 GW increases the levelized cost of generation by 3.39% and 4.69%, respectively. Increasing the LNG quota has a minor impact at the moment since the current LNG price is only about 12% higher than coal. In contrast, solar is still almost twice as expensive as coal. Solar prices around the world have been decreasing, and it might decrease in Japan in the future. The impact on CO2 and cost now becomes a policy decision, and the ratio between these two factors presents several potential combinations between LNG quota and installed solar capacity that could yield identical cost or the same CO2 targets as seen in *S*<sup>2</sup> and *S*4. More LNG is necessary when cost is prioritized, but it will lead to more dependence on LNG. Alternatively, by investing more in solar capacity, it could lead the CO2 reduction efforts and local power generation. This scenario entails lower dependence on both coal and LNG, which are both imported fuels. As with the previous results, the impact of weather on these values is evident, as seen in the variations in the levelized cost and levelized CO2 emissions.
