IEEJ © 2019

Energy trends in JapanThe Institute of Energy Economics, Japan

Energy Dialogue
Lund University, East Asian Student Association
IEEJ

Contents
1. Overview of energy trends and perspective in Japan
2. Renewable Energy Policy
3. Climate Change Policy

IEEJ © 2019

4. New Energy Policy - Hydrogen -1

Contents
1. Overview of energy trends and perspective in Japan
2. Renewable Energy Policy
3. Climate Change Policy

IEEJ © 2019

4. New Energy Policy - Hydrogen -2

Energy is an important agenda
for realizing a sustainable society
Paris Agreement1
Article 2“This agreement … aims to strengthen the global
response to the threat of climate change …,
including by (a) Holding the increase in the
global average temperature to well below
2oC above pre-industrial levels …”

Energy-related CO2 emissions2

Other GHGs
38%
Global GHGs, 2010
49GtCO 2 -eq

IEEJ © 2019

Energy-related
CO2
62%

 “Energy-related CO2” isCO2 from fuel combustion
 Energy-related CO2
accounts for 60%+
globally. “Other GHGs”
include forestry and landuse changes
 Decarbonizing energy
sector is crucial for
mitigating climate change

Japan, 2015

Sweden, 2013

USA, 2016

87.6%

68%

76%

1 Source: UNFCCC.
2 GHG=Green House Gas (such as CO2, CH4, N2O, HFC, PFC, SF6). The figures are estimated combining the IPCC’s fifth assessment
report (Figure 1.3) and the IEA CO2 Emissions from Fuel Combustion

3

Japan is one of the largest energy consumers
Major energy consumers, 20151
Unit: Million tons of oil equivalent (Mtoe)

0

1000

China

2000

3000

2973 Mtoe

USA
India
RussiaJapan

430 Mtoe

Germany
BrazilKorea
CanadaFranceIEEJ © 2019Japan

SwedenPopulation

127.1 Million

9.7 Million

GDP

4 395 Bil. USD

498 Bil. USD

Area

378 000 km2

450 000 km2

Per-capita energy
consumption

3.4 toe/capita

4.6 toe/capita

 China and the US are by far the largest energy consumers…
SwedenMacro data (2015)

45 Mtoe Japan is the fifth largest, accounting for 3% in the world(consuming almost 10 times larger than Sweden)

1 Primary energy consumption, including coal, oil, natural gas, nuclear and renewables consumption. Data from the IEA Energy
Balance Table.
2 Data in 2017.

4

Fossil fuels dominate in Japan’s energy mix,
while non-fossils in Sweden
Primary energy supply in Japan and Sweden1
Unit: Million tons of oil equivalent (Mtoe)

600
500

Japan
1973
oil crisis

Nuclear

40

Oil

300

Nuclear
Other renewables
Biomass
Hydro
Oil
Gas
Coal

Sweden50

Nuclear1979
oil crisis

400

60

2011
earthquake

30

200

Biomass

20

Hydro

10

Oil

Natural gas
100

coal
2017

2010

2005

2000

1995

1990

1985

1980

1975

2017

2010

2005

2000

1995

1990

1985

1980

1975

1971
IEEJ © 2019

1971

0

0

 Japan has diversified its energy mix since the 1970s (after the two oil crises). Nuclear
shrank after the earthquake in 2011
 Nuclear and renewables together contribute to 74% of Sweden’s energy mix in 2017
1 Data from the IEA Energy Balance Table.

5After the nuclear accident, the government introduced FiT(Feed-in Tariff) in 2012, which boosted solar PV
Renewable energy capacity in Japan
Unit: Giga-Watt (GW)7060

FiT started from July 2012

50
40
30

Solar PV
Wind (offshores)
Wind (onshore)
Geothermal
Bioenergy (solid biomass)
Hydro (medium/small)Hydro (large)

20
10

IEEJ © 2019

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

0

6

Yet, renewables face challenges in Japan
 Solar PV: intermittency (frequency
control, voltage stabilization, … ), ...

Wind resources: mainly in Hokkaido and Tohoku

 Onshore wind: intermittency,
geographical imbalance, …

400

200
100

Sunny
Sunny→cloudy
Rainy

Okinawa

KyusyuShikoku

ChugokuKansai

Chubu

HokurikuTokyo0 Biomass: costs (production andtransportation), …
Example of solar PV intermittency

Electricity demand (FY2014)

300

Tohoku Geothermal: resource location(national park, hot spring area, …)Wind resource

Hokkaido

 Offshore wind: intermittency,
costs, …

TWh/year

Geothermal potential: mainly in national park area
GW
6

Incl. national park area
(Class II and III Special zones)
Excl. national park area

5
4
3
2
1

Okinawa

KyusyuShikoku

ChugokuKansai

Chubu

Hokuriku

Tokyo

TohokuHokkaido

IEEJ © 20190

Source for wind and geothermal potential data: MOE, Study on Basic Zoning Information Concerning Renewable Energies (FY 2015),
http://www.env.go.jp/earth/report/h28-03/index.html [Accessed 12th September, 2016]7

Japan’s “3E+S” targets for the fiscal year 2030
“3E+S” policy targets1

Energy security(Energy self-sufficiency rate: 6.5% in FY2013)

Safety(foremost condition)

Economic efficiency(Electricity costs: surged due to fossil fuel costs,
FiT and grid integration of renewables)

Environment(GHG emissions: FY2013 was the worst level)

Improved self-sufficiency(about 25% by FY2030)

Electricity costs lower thanthe level in FY2013

GHG emissions reductions
comparable to EU and USA(-26% from FY2013)IEEJ © 2019

 Japan prioritizes “Energy Security”, while improving “Economic efficiency” and pursuing“Environment”. Nuclear Safety is foremost condition
1 Source: METI (2015), Long-Term Supply and Demand Outlook, http://www.meti.go.jp/english/press/2015/0716_01.html.

8

The government pursues relatively well-balancedenergy mix to achieve the “3E+S” policy
Outlook for power generation1

Energy-related CO2 emissions1

Fiscal year 2030

Total generation
1065 TWh

Unit: Mt-CO2

FY2013

FY2030Total emissions

1,235

927

Power generation

548

360

Oil 3%
LNG
27%(-24% from 2005)(-25% from 2013)(-22% from 2005)(-34% from 2013)

Coal
26%
Nuclear20-22%
Renewables
22-24%

 The share of nuclear decreases compared to thelevel before the earthquake (about 30%)
 Energy-related CO2 in FY2030 is expected todecrease by 25% from FY2013
 This government’s outlook is used as the basis forJapan’s NDC (Nationally Determined Contribution)

IEEJ © 2019

FY2030

1 Source: METI (2015), Long-Term Supply and Demand Outlook, http://www.meti.go.jp/english/press/2015/0716_01.html.

9

Contents
1. Overview of the energy trends and perspective in Japan
2. Renewable Energy Policy
3. Climate Change Policy

IEEJ © 2019

4. New Energy Policy - Hydrogen -10

Renewables have achieved 26% of the average annual
growth rate mainly due to the increase of Solar PV
 The main driver shifted from RPS and residential surplus electricity
purchasing to FIT in 2012


26% annual increase of renewables
Solar PV rapidly increased (5.6GW (2012)  39GW (2016))
Trend in renewables generation by technology(GW) 6000
60

5000
50

Solar PV
Wind power
Middle and small hydropower
Geothermal
Biomass

4000
40
3000
30

Average annual
growth rate
5%

2000
20

Average annual
growth rate
9%

Average annual
growth rate
26％

1000
10

IEEJ © 201902003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Excess Electricity
Purchasing Scheme

Source: METI

RPS

FIT

(FY)

11

Examples of the renewable projects in Japan

Wind Project

Solar PV Project

Source: SB Energy

IEEJ © 2019

 Location: Shimane
 Operation：June 2016
 Wind: 48MW Electricity Supply: 23,000 houses

Source: RENOVA

 Location: Chiba (444,000㎡)
 Operation：July 2014
 PV: 40.4MW
 CO2 reduction: 15,700 t/year
12

The government sets the target to introduce renewables
22-24% of the power supply by FY2030
Renewables
10％
Nuclear25％

Thermal power
65％

Renewables
14.5％
Nuclear
1.7％

Renewables
22 - 24％
Nuclear22 - 20％

Thermal power
83.8％

Geothermal
1.0 to 1.1%
Biomass
3.7 to 4.6%
Wind 1.7%
Solar PV
7.0%
Hydro
8.8 to 9.2%

Thermal power
56%
LNG 27％
Petroleum 3％
Coal 26％IEEJ © 2019

FY2010Source: METIFY2016

FY203013

IEEJ © 2019

Toward 2030, the introduction of Solar PV shows thedistinctive proportion

Source: METI

14

There are some challenges to overcome:
Challenge I: Budget constraint and cost reduction
 Higher cost/tariff compared with global trends
e.g. Non-residential solar PV 18 JPY/kWh (190 USD/MWh)
JPY10k/kW(USD/kW)40 (3,520)(2,640)20 (1,760)(8,80)

0PV system cost for
non-residential

JPY/kWh60

28.9JPY ($2,540)
14.8(1,300)14.1(1,240)日本（2016年）
Japan (2016)
モジュール・PCS
Module, PCS

50

15.5JPY ($1,360)7
8.5

Global trend in Solar PV tariff of 2MW(USD/MWh)70 (616)

(610)
(750)

欧州（2014年）
Europe (2014)40

UK
Germany
Japan

(528)

Netherland
France

Spain
Italy

40JPY

(440)

24JPY

30 (352)
20 (264)
10 (176)
0 (88)

Construction,
工事費・架台・BOS
Mounting, BOS(Source: METI survey)

IEEJ © 2019¥•

Introduce auction (e.g. solar PV (>2MW) since 2017 / biomass (>10MW) since
2018)

•

Set forward-looking price target (e.g. midterm price target)
Source: METI

15

Challenge II: Balance between solar & other renewables
 Solar PV accounts for 95% in newly installed capacity under FIT
Sources

Geothermal

Ratio

15

0.04%

Biomass

1164

3.0%

Wind

829

2.1%

31,732

81.2%

5,044

12.9%

284

0.7%

39,068100%

Solar PV (non-residential)
Solar PV (residential)
Mid to small sized hydro (less than
30MW)
Total

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Startedoperation
after FIT(MW)•

Set three-year tariff for wind, geothermal, biomass and hydro•Further foreseeability on coordination of regional stakeholders andadaptation of regulation (e.g. offshore wind)

Source: METI

16

Challenge III: Grid constraint
 Interconnection & local grid constraint
e.g. suitable for variable renewables(VRE) but limited regional demand

Hokkaido
5GW
0.6GW

and interconnection capacity

 Curtailment by overcapacity

16.7G
ChugokuW
11GW

in the regions suitable for VRE

5.6GW

Okinawa
2GW

5.6GW Hokuriku
5GW
Kansai
0.3GW
26GW 5.6GW

1.4GW
2.4GW
Shikoku
Kyushu
5GW
15GW

Chubu
25GW

Tohoku14GW
12.6GWTokyo
50GW

Frequency
Change
1.2GW*Italic: interconnection
capacity• Establish organization for cross-regional coordination of transmission(OCCTO)• Further discussion on the implicit auction for interconnections, Connect &Manage scheme
IEEJ © 2019

• Promote self-consuming renewables & demand with storages(e.g. roof-top solar PV + battery + EV)
Source: METI

17

Contents
1. Overview of the energy trends and perspective in Japan
2. Renewable Energy Policy
3. Climate Change Policy

IEEJ © 2019

4. New Energy Policy - Hydrogen -18

Current Situation in CO2 Emissions
 Japan’s CO2 emissions went down due to financial crisis
 Economic recovery from the crisis resulted in higher emission
level, accelerated by shutdown of nuclear plants after
Fukushima disasterJapan’s CO2 emissions by sector
Mt-CO2

700
600
500
400
300
200
100

IEEJ © 2019

0

2000

2005

20102011

20152016

Electricity and heat generation
Manufacturing industries and construction(Source) IEA (2018) “CO2 Emissions from Fuel Combustions for OECD Countries”

19Current Situation in Power Generation Mix
 After Fukushima disaster, nuclear plants were shut down andreplaced by natural gas and oil, resulting in higher emission
level from power sector.
Japan’s power generation mix
GWh1,200,000
1,000,000
800,000

2%
7%

3%
8%

27%

8%
7%

27%
34%

600,000
400,000
200,000

27%
35%
8%

37%
14%

26%

0

IEEJ © 20192010
Nuclear

Oil

10%

7%
3%

2011

2017

Natural gas

Coal

Hydro

Renewables

Other

20

Japanese Energy Challenges after disaster

Energy Security
Self-Sufficiency: Currently, 9% only

Economic Efficiency
Electricity Price
Substantial increase of electricity price from 2011

※FY 2018 Industry＝39%,
FY2010 11.9 cent/kWh→FY2018 16.6 cent/kWh
Residential＝26%, FY2010 17.8 cent/kWh→FY2018 22.5 cent/kWh

Renewable levy at 1.9 billion $ in 2019（3 billion $ once all permitted renewables become operational）

Environment

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GHG Emissions Reduction
Increasing CO2 emissions level from fuel combustion after
Fukushima21

Japan’s 2030 target
Assumption of the Target

 26% GHG reduction from2013 level by 2030
 Building blocks for the target

Massive energy conservation
 Energy saving amount▲ 50.3 million kl

0%

2005
emissions
(Mt)

2030
emissions(Mt)

Reduction
Ration(%)

Industrial

429

401

-7%

Commercial

279

168

-40%

Residential

201

122

-39%

Transport

225

163

-28%

EnergyTransfer

101

73

Total

1235

927

3
26

30.3

60%
40%

Sector

14.9

80%Power generation mix with more
renewable and restarted nuclear

Japan’s energy related CO2 emissions in 2030 and 2005

IEEJ © 2019

[Power generation mix ]

100%

27

20%

43.2

20

1
10.5

22

2013

2030

Renewables

NuclearCoal

OilNatural gas

Current
After oil shock

Next plan

-28%
-25%

(Source) METI “Long-Term Energy Supply/Demand Outlook,
Related Documents” (July 16, 2015)22

Progress of the Energy saving
Total <Energy saving amount ▲ 50.3 million kl>, ▲ 6 million kl (progress rate: 11.8%) as of FY2015
Industry ＜▲10.4 million kl＞▲1.19 Million kl（11.5％）in 2015

Commercial ＜▲12.3 million kl＞▲1.26 million kl（10.3％）in 2015
• LED

• LED

［330 thousand kl/1080 thousand kl 30.6％) ］• Industrial Heat Pump
• Industrial Motor［31thousand kl/87.9万kl (3.5％) ］［490 thousand kl/2288 thousand kl (21.4%) ］• Energy Efficiency standard for appliance［250 thousand kl/2784 thousand kl (6.1%) ］• BEMS［430 thousand kl/2353 thousand kl (19.6%) ］［40 thousand kl/1660 thousand kl (2.4％) ］

Residential ＜▲11.6 million kl＞

Transport＜▲16.1 million kl＞▲1.11 million kl（9.5％）in 2015

▲2.41 million kl（15.0％）in 2015

• LED

• Next generation vehicles［600 thousand kl/2011 thousand kl (29.8%) ］• Energy Efficiency standard for appliance［108 thousand kl/1335 thousand kl (8.1%) ］• HEMS[0.591/9.389 million kl(6.3％)］• Other measures[1.815 vs 6.682 million kl (27.2%)]［1.0kl/1783 thousand kl (0.6%) ］

IEEJ © 2019

Source: METI (2017) ※Compiling data related to EE measures under Energy Mix

23

Contents
1. Overview of the energy trends and perspective in Japan
2. Renewable Energy Policy
3. Climate Change Policy

IEEJ © 2019

4. New Energy Policy - Hydrogen -24

What is hydrogen
Water electrolysis

Fossil fuelProduction

•
•
•

Coal
Gas
LPG
(CnHm)H
Water
OxygenOOHO electricityH

H2

O2

H2

O
C

H

H

CO2

O

H

Clean fuelCurrent industrial use of hydrogen

IEEJ © 2019

Usage

ammoniarefineryOthermethanolSource:http://www.essentialchemicalindustry.org/chemicals/hydrogen.html

H H
H H

H
Combustion

H

O O

H

O

H2O

H

O

Fuel cells
H H
H H
O O

H

Chemical
reaction
Electricity

HEAT

Source: Fuel Cell Association, http://www.fcaenefarm.org/about.html;

H

O

H

H2O
O

H
25

Why hydrogen: deep decarbonization
Applicationsof H2

Variable
Renewable

Transport
Fuel cell
CHP

Electricity to
the grid

Industry
H2

O
Excessive electricity
generated by VRE thatcan not be absorbed by
the grid

HO

O2 electricity

IEEJ © 2019

H

O

H

H

H2

H2
Electrolysis(HydrogenProduction)

Building
Synthetic
fuel(methane) Using excess renewable electricity (electricity that cannot be absorbed by
the grid) to produce hydrogen.
 Hydrogen can be utilized in various sectors.

26

PtG projects in EuropeWindH2Gas P/L

Remote Island

WindSynthetic CH4GasP/LCNG vehicle

Hydrogen > Methane
4H2 + CO2  CH4 + 2H2OIEEJ © 2019

Synthetic Methanol

Source: http://www.powertogas.info/power-to-gas/pilotprojekte-im-ueberblick/windgas-falkenhagen/Source: Audi e-gas project
Source: The MYRTE project: implementing hydrogen energy storage through the ‘GreEnergy Box’
Source: https://www.spire2030.eu/mefco227

PtG demonstration project in Japan: Fukushima
Hydrogen energy research field (FH2R)
 The new 10,000 kW class hydrogen production
facility with world largest electrolysis will start
supplying hydrogen in 2020

IEEJ © 2019

 NEDO Toshiba ESS
 Tohoku ElectricPower Company
 Iwatani
Corporation

Source: NEDO (https://www.nedo.go.jp/english/news/AA5en_100393.html)

28

Hydrogen strategy
 “Basic Hydrogen Strategy” (Prime Minister Abe’s Initiative) World’s first national strategy
 2050 Vision: position H2 as a new energy option(following Renewables) Target: make H2 affordable($3/kg by 2030 ⇒ $2/kg by 2050)

3 conditions for realizing affordable hydrogen【Supply】【Demand】① Inexpensive feedstock (unused resources, renewables)② Large scale H2 supply chains・・・ ③ Mass usage (Mobility ⇒ Power Generation ⇒ Industry)

IEEJ © 2019 Key Technologies to be Developed
Production

Transportation• Electrolysis System• Brown coal gasification + CCS• Energy Carrier(LH2, MCH, NH3, etc.)

Use• Fuel Cells (Mobility, Stationary)• H2-fired Generation
Source: Ministry of Economy, Trade and Industry (METI)

29

Japan’s hydrogen strategy: Basic Hydrogen
Strategy
Present picture

2030

Fossil fuel-based hydrogen
Supply (by-producthydrogen, natural gas reformation)

 Developing international hydrogen
supply chains Developing domesticPower-to-Gas
for renewable hydrogen supply

Target future picture
CO2-free hydrogen(Brown coalcombinedwith CCS,
utilizing renewable energy)

Supply chain development and demonstration, scale-up

Hydrogenvolume(t/year)(Present)(2020)

200

4k

Cost

~10

¥17/kWh(R&D stage)
Dem onstrating hydrogen power generation, establishing anenvironmental value assessment system“Roadmap“ targets
Hydrogen
Stations(locations)(Reference comparison)

5～10m + α(depending heav ily on consumption
f or power generation)

2 (1/5 or less)¥12/kWh(Commercial stage)

Replacing gas
power generation(Ref erence) 300kt in hy drogenconsumption represents some
1GW in power generation capacity(Ref erence) 5-10 million t represents
15-30 GW in power generation capacity(Present)(2020)(2030)

100160

some900

FCV(units)25k

40kStrategic hydrogen station development,
regulatory reform, technological development

FC buses

Forklifts(units)Utilizationof fuelcells

FCV/Hydrogenstations
becoming
independent

100

40

500

* 2nd half ofthe 2020s

1.2k

85 million t/yNatural gas
import price:$1.6/kg**Conv ersion based onhy drogen’s calorif ic value

Unit LNG power
generation cost:¥12/kWh
Fossil power
generation capacity:

Replacing
conventional gasoline
mobility
Introducing large FCVs

10k

Number of gas
station:31,500

Number ofpassenger cars:

62 million

Relevant government organizations cooperating indeveloping hydrogen supply networks

Ene-Farm(units)2

800k

Natural gas imports:

132GW

Replacing gasstations

Halving hydrogen station costs

MobilityUse

3 (1/3 or less)－(units)IEEJ © 2019

300k
(commercial supply chain capacity)(hydrogen station price)Power
generation($/kg)

Scale-up
Substantial costcuts

230k

Ene-Farms
becoming
independent

5.3m

Source: Basic Hydrogen Strategy (2017)

Replacing traditional
residential energy
systems

Number ofhouseholds:

53 million

30

Japan’s hydrogen strategy: various CO2-freehydrogen sources Large scale transport of H2 (either from fossil fuel + CCS or renewables)

CO2 free hydrogen can also be produced from fossil fuel + CCS (blue hydrogen).

Pilot projects are under way aiming to commercialize long-distance hydrogen shipment.
Hydro in Russia

Power to Gas
in Europe

Oil/gas, flaring gas
in the Middle East
+ CCS

Hydro in Canada
Power to Gas
in JapanPV in the Middle East

IEEJ © 2019

 Power to Gas (PtG)


Brown coal in Australia+ CCS

Led by Europe, recently followed by Japan.

PV in Australia

31

Japan’s hydrogen strategy: private sector
HySTRA: commercialization of hydrogen supply chain
Source: http://www.hystra.or.jp/en/

AHEAD: commercialization of hydrogen supply chain

Source: https://www.ahead.or.jp/en/organization.html

IEEJ © 2019

JHyM: Japan H2 Mobility, hydrogen refueling station

Source: https://www.jhym.co.jp/en/partners/

32

IEEJ © 2019

Thank you very much!

33