Japan Updates, and draft EAEF Scenarios

Japan Updates, and draft EAEF Scenarios

Kae Takase (Governance Design Lab.)Tatsujiro Suzuki (CRIEPI)

EAEF Workshop, Beijing China, May. 12-14, 2004

Outline

UpdatesUpdates of latest statisticsFeature of new government outlookNGO outlook

EAEF Japan ScenariosBAU, National Alternative, and Regional

AlternativeConcept of scenariosResultsDiscussion topics

Topics in Energy Policies

“Energy policy basic law” is now leading Japan to more nuclear-friendly country.

Nuclear fuel cycle is at the crossroad (stop before active test?)

RPS law is interrupting fine diffusion of renewable energy

Turn back in deregulation. Compliance of Kyoto Protocol (2008-

2012) is difficult.

Updates (1)

•Economy is recovering with price decrease.

•Energy consumption decreased in 2001, but recovered to 2000 level in 2002.

•CO2 emission in 2002 is 10.7% higher than 1990 level.

Economy, Energy, and CO2 emission

1970=1

*Price: GDP deflator

*GDP: in real terms

1.00

2.80

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

GDP Price TFD CO2

Price

GDP

CO2

TFD

1970=1

Updates (2)Energy consumption by sector

0

200,000

1965 69 73 77 81 85 89 93 97

2001

Industry Household Commercial

Passenger Freight

Industry

Passenger

Freight

Household

Commercial

•Industry is still the largest consuming sector of energy in Japan.

1010kcal

Updates (2-2)Energy consumption by sector (1970=1)

•Passenger transportation is the most growing sector since 1970.

•Household and commercial sector is also growing rapidly.

•Freight transportation and industry sector is not growing fast. Freight consumption is steady recently.

0.00

4.00

1965 69 73 77 81 85 89 93 97

2001

Industry Household Commercial

Passenger Freight

Industry

Passenger

Freight

Household

Commercial

Updates (3)Energy consumption by source (final energy)

•Oil share is almost 60% of total final energy consumption.

•Electricity share is 22%. (higher than U.S., Korea, China and Europe, but lower than H.K., Taiwan, Canada.)

Gas7%

Elec22%

Oil59%

Coal11%

Coal Oil Gas Elec Others *Gas does not include LPG. LPG is included in oil.

Updates (3-2)Energy consumption by source (final energy)

•Electricity is growing, but gas share is growing more rapidly.

•Coal consumption is at the same level since 80s’.

•Oil consumption is not growing neither.

0.00

4.50

1965 69 73 77 81 85 89 93 97

2001

Coal Oil Gas Electricity Others

Oil

Gas

Coal

Electricity

Others

*Gas does not include LPG. LPG is included in oil.

New government outlook

Intermediate outlook will be published on May 17th.

Outlook will be calculated up to 2030.Economic growth assumption and

energy demand by sector is published in Feb.

Economic Growth

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

2000s 2010s 2020s

Government High Government Reference Government LowGovernment Low IEEJ Reference IEEJ LowIEEJ Low NGO Reference NGO Green growthNGO structual change

Final Energy Consumptionmil. kl of crude oil equivalent

Peak:2022 (448)

2.0%/year 0.2%/year

Government outlook

Source: METI (2004.2)

Final Energy Consumption

Government outlook shows highest growth in energy consumption.

IEEJ shows lower energy consumption for reference case.

Comparison with other outlook

400

460

2000 2010 2020 2030

mil.

kl o

f cr

ude

oil e

quiv

alen

t

Gov. IEEJ NGO

Gov.

NGO

IEEJ

Ratio of Electrification in FDGovernment outlook

IEEJ outlook:27%

Final Demand by SectorGovernment outlook

Industry

CommercialPassenger

Household

Freight

Industry (exc. feedstock)

Ind. HH Com. Pas. Fre.

mil. kl of crude oil equivalent

F.Y.

Comment by Government

Energy demand will not grow as it did in 1990s even in high economic growth case.Government’s assumption of economic

growth is much higher than that of IEEJ and NGO.

Calculated energy demand differs 10% by different economic assumption. Electricity demand differs 20%.

Comparison with IEEJ and NGO

Government assumption of economic growth is much higher than that of IEEJ and NGO.

Calculated energy demand by government is higher than that of IEEJ and NGO. IEEJ shows lowest energy demand.

Alert by NGO

Financial deficit grows, and current balance will change to a deficit in 2020.

Unemployment rate will be 12% (4.7% in 2010) CO2 Emission will be +5-11% in 2010, and

continues to grow. Situation can be better with government’s emphasis

on “Green” industries. (It can increase competitiveness in international market.)

- 250

0

250

1985 1995 2000 2010 2020 2030

BAU 代替

4

- 16- 22

- 29- 35

- 54

- 27 - 25 - 23

- 65

- 35

- 5

1985 1995 2000 2010 2020 2030

BAU 代替

Current Balance (trillion yen, 95 price)

Finantial Balance (trillion yen, 95 price)

EAEF Scenarios

1. Reference Activity Level, Unit consumption, share of each e

nergy source: IEEJ Renewable energy: ISEP study

2. National Alternative Reference + energy conservation (WWF) + more r

enewables (ISEP) + elec. generation composition by sources (WWF)

3. Regional Alternative Oil pipeline, Natural Gas pipeline, Electricity impo

rt For nuclear and renewables & conservation coop

eration (only affect to the cost)

National Alternative

Energy conservationArranged Tsuchiya study for WWF for 100% i

nstallation.50% in 2010, 100% in 2030

Renewable energyWWF “PowerSwitch” scenario, ISEP study

Less coal and nuclear in electricity generationWWF PowerSwitch” scenario

Regional Alternative

1. Oil pipeline from Eastern Siberia to the Pacific port of Nahodka, starts in 2

010 1 million bpd, at a cost of $5 billion (1/2 China, 1/2 Japan) $0.47 per barrel of oil received (30 years lifetime, 5% discoun

t rate annual payment 6.5%, 95% capacity factor)

2. Gas pipeline from Sakhalin Island south to Northern Japan, starts in 2018 Capacity and cost unknown (All of Japanese cost and ½ of Ru

ssian cost paid by Japan) (Price estimate by Russian engineer exists)

3. Sharing of Oil Refining Capacity Japan: rental fee revenue, China: smaller cost of refining It is a matter of China’s decision

Regional Alternative

4. Electricity Interconnections Sakhalin CNG power to Hokkaido, 2GW in 2020, 4GW

(total) in 2022 project cost: 9 to 10 billion USD (6 billion USD in

transmission line etc.) ½ of total cost paid by Japan (5 cents/kWh) Maximum capacity factor will be 65%

5. Cooperation in Nuclear Research and Nuclear Waste Agreements

6. Cooperation in Energy Efficiency and Renewable Energy Financing and Technology Development

Final demand by sector

0

500

1000

1500

2000

2500

3000

3500

4000

Bas

e

Ref

eren

ce

Nat

_Alt

Reg

_Alt

Ref

eren

ce

Nat

_Alt

Reg

_Alt

2002 2010 2030

Industry Households Commercial Transportation

Final energy demand grow at 0.3%/year in reference case.

Due to energy conservation, demand in alternative scenarios decrease at 0.03%/year.

Primary Energy Requirement

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Bas

e

Ref

eren

ce

Nat

_Alt

Reg

_Alt

Ref

eren

ce

Nat

_Alt

Reg

_Alt

2002 2010 2030

Coal Oil PP OilGas PP Gas NuclearHydro&Geothermal Others Elec Imp

Ref:0.2%/year Alt:-0.7%/year

Pipeline oil & gas introduced in regional alternative scenario.

Unit: 10^12kcal

Electricity Generation

0

200

400

600

800

1000

1200

Bas

e

Ref

eren

ce

Nat

_Alt

Reg

_Alt

Ref

eren

ce

Nat

_Alt

Reg

_Alt

2002 2010 2030

Coal Oil NG Nuclear Hydro&Geo Others

No electricity import (->need to be fixed)

More gas and renewables, less coal & nuclear in alternative scenarios.

Household

500

650

2000 2002 2010 2020 2030

10^1

2kca

l

Government IEEJEAEF-ref EAEF-nationalEAEF-regional

Gov.

nationalregional

IEEJref

Government outlook shows higher increase.

* Government has changed the statistics in 2002, but IEEJ and most research institutes use previous statistics calculated by IEEJ.

Energy Share: Household

43% 46% 53%

18% 17%17%

25% 24%20%

12% 12% 10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2010 2030

Electricity Municipal GasFuel Oil LPGSolar Coal unspecifiedBiomass unspecified

Reference case

Shares of electricity and gas will increase.

Oil and LPG share decrease.

Energy Conservation: Household

LCD TV, LCD PC, double efficiency refrigerator, diminish stand-by electricity loss

replace boilers to supply hot water to ones with latent heat recovery system

passive solar (heat, hot water)efficient gas tablechange incandescent lamp to

fluorescent lamp installation of dishwasher

50% in 2020, 100% in 2030

Energy Conservation: Household

235.1 272.3 310

96.798.6

101.5136.1

140115.2

67.169 56.8

-100

0

100

200

300

400

500

600

700

2002 2010 2030

Electricity Municipal GasFuel Oil LPGSolar Coal unspecifiedBiomass unspecified Sav.ElecSav.Oil Sav.Gas

2010: 4% of total FD conserved.


Biggest conservation in gas (boiler replacement and passive solar use in heating and hot water supply).

Commercial

400

700

2000 2002 2010 2020 2030

10^1

2kca

l


Gov.

nationalregional

IEEJref

*Change in statistics was very big in commercial sector.

IEEJ outlook show higher increase.

Energy Share: CommercialReference case

47% 51% 55%

14%14%

16%

30% 27%22%

6% 6% 5%

0%

100%

2002 2010 2030

Electricity Municipal GasFuel Oil LPGMetalurgical Coke SolarGeothermal CNG

Shares of electricity and gas will increase.

Oil and LPG share decrease.

Energy conservation: Commercial

Change to amorphous transformer, street lighting without an electrode, LED traffic lights, LED lights, LCD PC

higher insulation rate in rental offices cut off stand-by electricity loss of electricity

appliances cut off electricity use of vending machine by

54% replace oil pressure elevators to the ones

without mechanical room energy management system in buildings replace boilers to supply hot water to ones

with latent heat recovery system50% in 2020, 100% in 2030

Energy Conservation: Commercial

225.7 277.4 332.3

64.976.8

93.4142.7145.6

131.229.6

30.327.3

0

-19.6-103.2

-200

-100

0

100

200

300

400

500

600

700

2002 2010 2030Electricity Municipal Gas Fuel Oil

LPG Metalurgical Coke Solar

Geothermal CNG Sav.Elec

Sav.Oil Sav.Gas Sav.Coal



Biggest conservation in electricity (replacement to LED, etc).

Transportation

400

1100

2000 2002 2010 2020 2030

10^1

2kca

l


Gov.

nationalregional

IEEJref

Government assumes growing energy consumption in transportation sector, but IEEJ assumes decrease since 2010.

Energy Share: Transportation

96% 96% 96%

2%2%2%2%2%2%

0%

100%

2000 2010 2030

Fuel Oil LPG Electricity

There are possibilities to use CNG, and more electricity, but these are not included in this version.

Energy Conservation: Transportation

Tax reform for smaller carsShare of double efficiency cars

(hybrid, fuel cell) will be 60% in 2030

50% in 2020, 100% in 2030

Energy Conservation: Transportation

875.9 865.4738.7

14.7 15

13.2

-138.5-285.5

16.7

18.918.5

-400

-200

0

200

400

600

800

1000

2002 2010 2030Fuel Oil LPG Electricity Conservation of Fuel Oil



Gasoline and diesel oil use is conserved.

1500

1800

2000 2002 2010 2020 2030

10^1

2kca

l


Gov.

nationalregional

IEEJref

IEEJ assumes recovery of economy since 2010, and energy consumption also increase.

Energy Share: Industry

23% 21% 19%

5% 6% 6%

21% 22% 23%

50% 50% 51%

0%

100%

2002 2010 2030

Solid Fuels Natural Gas Renewables

Biomass Electricity Oil Products

Coal share decrease.

Electricity and oil share increase.

Energy Conservation: Industry

Efficient appliances in all sectorsa control system with an inverter, an amorp

hous transformer, Highly efficient Moter, lights, LED Lights,

regenerative gas-fired burner for industrial furnaces

Efficient process in chemical, paper and pulp, and cement industries.

50% in 2020, 100% in 2030

Energy Conservation: Industry

391 356 323

93 100 103

357 382 392

867 870 881

0

-74.2 -148.4

-500

0

500

1000

1500

2000

2002 2010 2030Solid Fuels Natural Gas Renewables Biomass Electricity

Oil Products Sav.Elec Sav.Oil Sav.Coal Sav.Gas

6% saving 13% saving

Largest conservation in coal consumption.regenerative

gas-fired burner for industrial furnaces

Conclusion

Japanese government is in a process of making new outlook to 2030. Intermediate report on May 17th.Gov. foresees demand peak will be in

2022 followed by gradual decrease.Draft EAEF Japan scenarios

Reference (IEEJ case), National Alternative, and Regional Alternative

Topics for discussion

Cost merit of refinery rentalCogeneration potential (efficiency factor)Future of nuclear and renewables

Energy Policy Basic LawEnergy Policy Basic Law(2002.6.7 approved)

“Promote non-fossil fuel energy use for environment”Energy Policy Basic Plan (2003.10.17 approved

by Cabinet, reported to the Diet)“Stable supply”: Steady promotion of nuclear and

renewable “Environment”: Improve the use of non-fossil fuel,

such as nuclear, photovoltaic, wind, and biomass, improve the use of gas

“Use of market mechanism” : But government should be responsible for “stable supply” and “environment.”

New “long term outlook” is under construction.Advisory Committee of Energy will start by the end of

2003.Final outlook will be determined by March (or June) in

2004.

Major Policy Issues

RPS Law

RPS law (2002.6 approved, 2003.4 enforced)Electric power supplier obliged to supply certain perce

ntage of “new energy”Suppliers can supply new energy with their own capac

ity, or buy electricity from IPPs, or buy value of “CO2-free”

“New energy” includes waste power (dominant energy in Japanese RPS)

122

103.392.786.7

83.48076.673.2

60708090

100110120130

2003 2004 2005 2006 2007 2008 2009 2010

108̂k

Wh

Major Policy Issues

Concealment of cracks by TEPCO

2000.9: former employee of GE reported to METI the alteration of the internal inspection record

2002.8: “Nuclear and industrial safety agency” and TEPCO announced, “13 plant, 29 data alteration”

(more alternation revealed)2002.9: TEPCO was ordered to stop Fukushima

No.1 plant.2003.4: TEPCO stopped all 17 plants (now 7 working,

rest would be restarted by 2004.3)2003.4-10 operation rate: 53.8% (30 point less than

last year)No blackout in the summertime

Major Policy Issues

Nuclear Fuel Cycle

No more need for NFC No future for FBR/pluthermal, no more scarcity of uranium

Project cost electricity price Once started: $90-130 billion (1US$=110 yen) 1 cents/kWh Stop before active test: $40 billion

2004.1- Uranium test (contamination starts) 2005.2- Active test 2006.7- Commercial operation

Whole cycle (2003.11.3 The Federation of Electric Power Companies of Japan(?), 72 years until decommission, mainichi news): $200 billion 2 cents/kWh(nuclear)

Problem with used fuel storage for power companies If the project continues, 5 ton of plutonium per year will be pr

oduced in Rokkasho

Major Policy Issues

(Source: Japan Initiative,2003.11)

(nuclear)

Deregulation

Retail liberalization2001.3- :large-scale factories and

department store (30% of demand)2004- :+middle-scale factories, office

building2005- :+small-scale factories, supermarket

(60% of demand)Turn back of market reforms (midterm

report for further reform, 2003.9)Responsible companies for generation-

transmission-distribution is vital for stable supply, and nuclear development

Major Policy Issues

Documents

Japan Updates, and draft EAEF Scenarios