2017/11/23

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1

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Contents

1. Japanese Energy Mix Revision and Its Background
2. Nuclear Energy Seen from Viewpoint of 3E’s
3. Is Safety Secured ?
4. Why Is Running on 100% Renewables Difficult ?
5. Why Can Germany Phase out Nuclear Plants ?
6. Conclusion

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3

Contents4

1. Japanese Energy Mix Revision and Its Background(1) 2030 Energy Supply and Demand Structure: Difference Between 2010 and 2015 Versions＜1＞Energy Demand and Primary Energy Supply Structure (Energy Supply) Nuclear and renewable energy had a combined share of aprx. 40% (37%) in the2010 version of the target energy for 2030, against 24.3% in the 2015 version. The nuclear share in
the 2015 version was halved from the 2010 version. Priority shifted from heavy dependence on
nuclear energy to diversification.

1. Japanese Energy Mix Revision
and Its Background① Economic Growth

2010（2007→2020）aprx. 2%/year

2015（2013→2030）

Ver.

2. Nuclear Energy Seen from Viewpoint of 3E’s

Ver.

3. Is Safety Secured ?

② Energy Conservation

Improving EE by 35% in
after “oil crisis”)（Projections in 2015）

361 mil. kl
Electricity
25%

5. Why Can Germany Phase out Nuclear Plants ?

Maximum EE
Improvement
Economic aprx. 50.3 mil. kl(▲13% from a case
Growth
1.7%/year without EE measures)

Heat,
Gasoline,
City gas,
etc.:
75%

6. Conclusion

Electricity
28%
Heat,
326 mil. kl Gasoline,
City gas,
etc.:
72%
Final Energy
Demandaprx.

FY2013 (Actual)

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24.3％

20 years (same as the level（Energy Demand）

4. Why Is Running on 100% Renewables Difficult ?

④Energy-related
CO2 Emissions

aprx. 40%（37%）

N.A.

（2020→2030）aprx. 1.2%/year

1.7%/year③ Energy Self-Sufficiency
Ratio(C) 2017 IEEJ, All rights reserved

FY2030 (with EE)

N.B: EE stands for“Energy Efficiency”

Million kL
800
Oil Equivalent
700
600
500
400
300
200
100
0

730 mil. t-CO2)
927 mil. t-CO2)(Down 25% from FY2013)（Primary Energy Supply）
Comparing Projections 2010, 2015

517
13%
24%
17%
16%

489

Self
Sufficiency

13～ 14%11～ 10%
19%
25%

37％

Self
Sufficiency
aprx.

24.3％

3%

3%

27%

30%

(Projections in 2010)(Projections in 2015)

Renewable
Nuclear
Gas
Coal
LPG
Oil

Projections for 2030
(Source)（Projections in 2010）Joint Meeting, (The 2nd) Coordination Subcommittee, (The 4th) Basic Energy
Planning Subcommittee, Advisory Committee for Agency for Natural Resources
and Energy "Energy Supply and Demand Outlook in 2030“ (June, 2010)（Projections in 2015）METI “Long-term Energy Supply/Demand Outlook” (July 16, 2015)

FY2030 (Forecast)※四捨五入の都合上、合計が100％にならない場合がある。
出所：（2010年見通し） 総合資源エネルギー調査会 総合部会（第2回会合）・基 本計画 委員会 （第4回 会合）
合同会合「2030年のエネルギー需 給の姿 」2010年6 月（2015年見通し） 総合資源エネルギー調査会 基本政策分科会 長期エネルギー需給見通し小 委員会（第10回会合）「長期エネルギー 需給見 通し 関連資料」2015年6月

5

1. Japanese Energy Mix Revision and Its Background(1) 2030 Energy Supply and Demand Structure: Difference Between 2010 and 2015 Versions<Reference>

6＜2＞Electricity Mix

Promotion of Energy Conservation：Improvement of Ambitious Energy Efficiency

 (Electricity Mix) Nuclear and renewable energy had a combined share of 68% in the 2010 version
against 44% in the 2015 version. Nuclear energy’s share was cut by 30% (from 49％ to 20-22％).
Priority shifted from heavy dependence on nuclear energy to diversification.

❖ The Ministry of Economy, Trade and Industry (METI) promulgated "the Long-term Energy Supply
and Demand Outlook" in July 2015.

①Energy Conservation2010 Ver.
2015 Ver.

② Nuclear Energy’s Share

N.A.

N.A.

20-22%

22-24%

Down 2-5% from FY2013

Total power generation

17%

Economic
growth:1.7% per year

Electricity

966.6

billion kWh

Maximum EE
Improvement
aprx. 196.1 billion kWh(▲17% from a casewithout EE measures)（Electricity mix）

Energyconservation:

aprx. 17%
Energyconservation Renewableenergy:andElectricity

980.8

billion kWh

Renewableenergycovering

aprx. 40%

FY2030(with EE)

(C) 2017 IEEJ, All rights reserved

Biomass: aprx. 3.7-4.6%
Wind: aprx. 1.7%

aprx. 17-18%
LNG:

aprx. 22-24% Solar PV: aprx. 7%
Nuclear:Hydro:
aprx. 20-22% aprx. 8.8-9.2%
LNG:

Coal:

Coal:

Oil: aprx. 2%

Oil: aprx. 3%

aprx. 19-20%
Nuclear:aprx. 22%
aprx. 22%

FY2013 (Actual)

Unauthorized reproduction prohibited

Geothermal :aprx. 1.0-1.1%
Renewableenergy:aprx. 27%
aprx. 26%

Projections
for FY2030

100 million kWh

12000

8000

1,065

billion kWh■Thorough energy conservation measures would reduce final energy consumption by 13% to 326 million kl.
■Energy conservation measures would be accumulated to improve energy efficiency as much as just after
the oil crises.

Further energy conservation (3 points)① “Facility Renovation”② “IT Utilization”• FEMS （ Factory Energy Management System ）• BEMS （ Building〃）• HEMS （ Home
〃
）
• ITS
（ Intelligent Transport Systems ）③ “Energy Conservation in Buildings”(Electricity mix)
Comparing Projections 2010, 2015

10000

(Total Electricity Output)

aprx. 1,278
billion kWh④ Electricity Cost

aprx. 20% (19%)（2015 version）
Thorough energy conservation and maximum renewable energy expansion is set to cover aprx. 40%
of total electricity generation, with nuclear energy’s share of the electricity mix reduced substantially(from 29% before the March 2011 disaster to 20-22%).
Base load share: 56% (against 63% before the March 2011 disaster)（Electricity Demand）③Renewable Energy’s
Share

aprx. 50% (49%)

6000

14%

10200

10650

19%

22～ 24%

49%

4000

2000
0

Renewable, etc
44％

68％

14%
14%
4%

22～ 20%27%
26%
3%Nuclear
LNG
Coal
Oil, etc(Projections in 2010) (Projections in 2015)
Projections for
Projections
for2030
2030(Source)（Projections in 2010）Joint Meeting, (The 2nd) Coordination Subcommittee, (The 4th) Basic Energy
Planning Subcommittee, Advisory Committee for Agency for Natural Resources
and Energy "Energy Supply and Demand Outlook in 2030“ (June, 2010)（Projections in 2015）METI “Long-term Energy Supply/Demand Outlook” (July 16, 2015)

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(Source) Document 3 “Long-term Energy Supply/Demand Outlook, Related Documents” p.66

※四捨五入の都合上、合計が100％にならない場合がある。
出所：（2010年見通し） 総合資源エネルギー調査会 総合部会（第2回会合）・基本計画委員会（第4回会合）
合同会合「2030年のエネルギー需給の姿」2010年6 月（2015年見通し） 総合資源エネルギー調査会 基本政策分科会 長期エネルギー需給見通し小委員会（第10回会合）「長期エネルギー需給見通し 関連資料」2015年6月

12017/11/23<Reference>

7■Energy savings in each sector would be accumulated to save energy consumption by 50.3 million kl

1. Structural Challenges in Japan’s Energy Strategy (<Major energy conservation measures in each sector>
Industry sector<Down about 10.42 million kl>

Commerce sector <Down about 12.26 million kl>➢ 4 major industries (steel, chemicals, cement, paper-pulp)⇒ Promoting low-carbon society action plans➢ Energy-saving buildings⇒ Energy conservation standard adaptation requirement for
new buildings＞ Promoting plant energy management➢⇒ Improving energy efficiency through visualization of
manufacturing lines➢ Developing and introducing innovative technologies⇒ Introducing COURSE50 (CO2 Ultimate Reduction in
Steelmaking Process by Innovative Technology for Cool
Earth 50) to cut CO2 emissions by some 30% throughhydrogen reduction of iron ore, blast furnace gas CO 2
separation, etc.)➢ Cross-industry introduction of highly efficient equipment⇒ Low-carbon industrial furnaces, high-performance boilers,etc.

Transport sector <Down about 16.07 million kl>
million➢
Diffusing next-generation vehicles, improving fuelefficiency⇒ One of every two vehicles would be a next-generation
vehicle⇒ Fuel cell vehicles: More than 100,000 units in maximum
annual sales➢ Traffic flow measures

(1)
(2)
(3)
(4)

➢ Introducing LED lights and organic light emitting
displays⇒ Diffusing LED and other highly efficient lights)… Fundamental vulnerabilities in the energy supply system… Changes in the medium- to long-term energy demand structure… Unstable resource prices… Increasing GHG emissions(Energy Security)(Economic Efficiency )(Environment )2. …Nuclear plant accident…Emerging challenge =Realities of Quadlemma（➢ BEMS building energy management system for energy
management⇒ Introducing BEMS for a half of buildings➢ Promoting national movements

Residential sector

8

1. Japanese Energy Mix Revision and Its Background(2) Why is priority given to diversification ?
: Revision of basic plan

Specific Energy Conservation Assumptions→（ afety）(2) … Outflow of national wealth, increasing supply uncertainty→（ conomic Efficiency)(3) … Impact on the macro economy, industry, and households (national livelihood) →（<Down 11.6 million kl>(4) … Surging GHG emissions➢ Energy-saving housing⇒ Energy conservation standard adaptation requirement for
new housing+ +(1) … Concerns over the safety of nuclear power)

acro Economy)→（ nvironment）(5) … Power interchange and supply in emergency situations - defects found →（ nergy Security ①）(6) … Loss of confidence in the government and power companies(7) … Increased introduction of co-generation➢ Introducing LED lights and organic light emitting
displays⇒ Diffusing LED and other highly efficient lights(8) … Changes in geopolitical structure(9) … Development of the shale revolution(10) … Global increase in the use of nuclear power➢ BEMS building energy management system for energy
management⇒ Introducing BEMS for all houses➢ Promoting national movements→（ nergy Security ➁）(Note) The key issues include “Facility Renovation”, “IT Utilization”, and “Energy Conservation in Buildings”
as well as the introduction of “Benchmarking Systems”.
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(Source) Document 3 “Long-term Energy Supply/Demand Outlook, Related Documents” p.21 at 11th meeting (July 16, 2015) of the Long-term
Energy Supply and Demand Outlook Subcommittee, Strategic Policy Committee, Advisory Committee for Natural Resources and Energy

9

1. Japanese Energy Mix Revision and Its Background(2) Why is priority given to diversification ?
: Energy mix determination and responses Revision of basic plan
1. Position of Long-term Energy Supply and Demand Outlook⇒ The Long-term Energy Supply and Demand Outlook is a desirable future energy supply and demand
picture that may be realized when measures are implemented for policy targets that should be
attained from the basic energy policy viewpoints of energy security, economic efficiency,
environmental adaptation and safety (3E’s + S), based on the Basic Energy Plan. The latest outlook isdesigned for 2030.

2. Basic policy for energy mix determination: Addressing the quadlemma⇒ In the absence of perfect energy that can respond to the quadlemma, priority is given to
diversification.

1) Energy security: The energy self-sufficiency rate will exceed the level before theMarch 2011 disaster (to about 25%).
2) Economic efficiency: Power costs will be reduced from present levels.
3) Environmental friendliness: With a greenhouse gas emission reduction target
rivalling European and U.S. targets, Japan will lead theworld in cutting GHG emissions.
4) Safety: At the same time, dependence on nuclear power plants will be reduced asmuch as possible.

3. Regular revision⇒ The outlook will be revised as necessary when the Basic Energy Plan is updated every three years.

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(METI “Long-term Energy Supply and Demand Outlook (July 2015)” released on July 16, 2015)

2. Nuclear Energy Seen from Viewpoint of 3E’s

11(1) Energy Security

International energy situation destabilization: 3 risks☑ Risk ① Shale revolution and fate of crude oil prices after
their plunge☑ Risk ② Growing geopolitical destabilization☑ Risk ③ Fate of Middle East after birth of U.S. Trump(C) 2017 IEEJ, All rights reserved

1. Japanese Energy Mix Revision and Its Background

2. Nuclear Energy Seen from
Viewpoint of 3E’s
3. Is Safety Secured ?
4. Why Is Running on 100% Renewables Difficult ?
5. Why Can Germany Phase out Nuclear Plants ?
6. Conclusion
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(1) Energy Security

Risk① Shale revolution and fate of crude oil prices after their plunge❖ What mid- and long-term effects will arise if crude oil prices continue falling?
❖ What are the break-even prices for shale oil and gas production?
(US$/bbl)

120
110
100
90
80
70
60
50
40
30
20

IMF est.

（Apr. 2017）

Brent spot

Fiscal Breakeven
Oil Price (2017 est.)

83.8 Saudi Arabia
79.2 Oman
67.0 UAE
54.3 Iraq
52.9 Qatar
51.3 Iran
49.1 Kuwait

WTI spot(Source) US/EIA “Spot Prices for Crude Oil and Petroleum Products”(C) 2017 IEEJ, All rights reserved

12

2. Nuclear Energy Seen from Viewpoint of 3E’s

2014 2015 2016 2017
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10

Contents

Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct

administration(Source) METI “Basic Energy Plan” April 2014, pp.8-14

Unauthorized reproduction prohibited

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

Fiscal Breakeven
Oil Price ($/bbl)

20162017est. 2018est.

Saudi
Arabia93.7

Oman

80.160Iran, I.R. of

83.8

74.4

79.2

78.8

73.14051.3

58.8

United ArabEmirates

58.620

67.0

58.6

Qatar

54.6

52.9

54.9

Kuwait

46.5

49.1

50.4

Iraq

46.1

54.3

56.5

70
50
30

(Source) IMF, Apr. 2017.

2

2017/11/23<Reference>

13

World Gas Price by Region<Reference>

14“History doesn’t repeat itself, but it does rhyme”~ Mark Twain❖ Oil price➢ Gas Prices for Japan and Asia are relatively high.

$2016/bbl

100
U.S. (Henry Hub) Pipeline gas
UK (NBP) Pipeline gas
Japan (average50

LNG import price)Northeast ASIA
LNG spot

0

1970

1980

1990

2000

2010

2016
Source: BP

7.29
7.22
5.88

• Decreases in demandand increases in supply
by non-OPEC countries
following high priceafter the oil crises

2.98• Severer competition in
OPEC• Easy supply-demandbalance affected by the
Netback pricing

Unauthorized reproduction prohibited(Source) US,EIA, etc.

(C) 2017 IEEJ, All rights reserved<Reference>

15

Institute of Energy
Economics, Japan(IEEJ)

95$2016/bbl

International Energy
Agency(IEA)

94$2016/bbl(Japan)90.4$2016/bbl• Slow growth of global
demand(Source) IEEJ, Asia/World Energy Outlook 2015, Oct. 2015, etc.

(C) 2017 IEEJ, All rights reserved

16

2. Nuclear Energy Seen from Viewpoint of 3E’s

(Source)(U.S.)“IEEJ Outlook
2018”

Uncertain
MiddleEast
peace
problems

Saudi Arabia,
Abu Dhabi andothers severed
diplomatic ties
with Qatar

Saudi
Arabia-Irantensions
after nuclear
agreement

The Ukraine (Violation of international law in broad daylight)
Shale
revolution’s
economic
and political
impacts

European countries' dependence on Russian natural gas

4.5 (Oct, 2017)$2016/Mbtu$2016/Mbtu(Japan)(U.S.)

10.5

4.4$2016/Mbtu$2016/Mbtu(Japan)(U.S.)“World Energy
Outlook 2017“
New Policies
Scenario,(Nov. 2017)(Source) The Financial Times, April 4, 2014.

<Ref> Japan's dependence on Russian natural gas
12%Energy Information
Administration, U.S.
Department of Energy(DOE/EIA)• Increases in supply by
non-OPEC and OPEC
countries

Risk② Growing geopolitical destabilization

Natural Gas

10.9• Expansion of
production capacity by
Saudi Arabia and others

Unauthorized reproduction prohibited

Destabilization of the Middle East

Crude oil and natural gas prices projected for 2030 (Main scenarios)
Crude Oil• Expansion of OPEC
production quota andexcess production by
the members over theirquota• Sharp drop of demandon the Lehman shock(1) Energy Security

3 Energy Outlooks by 3 Energy Organizations

2030 Price Outlook• Decreases in emerging
economies’ demand on
the Asian financial crisis

N.A.

5.0

“Annual Energy
Outlook 2017“(Jan. 2017)$2016/Mbtu

Anti-U.S.
sentiment
growing in
Arab andIslamic World

Destabilization factors forpresent Middle Eastern
regimes and systems in wakeof “Arab Spring” movements
How about Saudi Arabia?

LNG
Crude Oil

10%

Potential
terroristattacks on oil
facilities

8%

8.8%
6.0%

6%
4%
2%
0%
2000

(Source) Prepared by IEEJ
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

2005

2010

2016

（C.Y.）

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(Source) Ministry of Finance “Trade Statistics of Japan”

ロシア
依存度
（暦年）

<Reference>17

Primary Energy Demand by Region(Reference)

World
2015

Asia

13,500
Mtoe

Production
Consumption
Net Import
Net Import Dependency Ratio

1,000

75%

800



2050

19,800400(1.5-foldincrease)

200

Mtoe
North America
OECD Europe

60%

600

0

576

26%

77%

South China Sea (Aggression in the gray zone)
Territorial disputes in South China Sea

100%
80%

614 60%

40%
319

20%
58

0%

-19

Malacca Straits

-200

-20%
-22%

-400

-40%
1980

(Source) IEEJ “IEEJ Outlook 2018” （Oct. 2017）
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

18

In the Asia ? ：North Korean Provocations？

China Oil Supply and Demand
Outlook
Mtoe<Reference>：Competition for Resources and “Territorial Disputes”

In the Asia ? ：Competition for Resources and “Territorial Disputes”

2000

2015

2030

2050

90% of Japan’s crude
oil imports and 40%
of Japan’s LNG
imports pass throughthe Malacca Straits(Source) The Wall street Journal,
May 9, 2014 (Japanese website)(Source) IEEJ “IEEJ Outlook 2018” （Oct. 2017）

North Korean Provocations？
10/9/2006
5/25/200912/17/2011
2/12/2013
1/6/2016

1st underground nuclear test
2nd nuclear test
Kim Jong Un named new leader (3rd supreme leader)
3rd nuclear test
1st successful hydrogen bomb test (viewed as4th
nuclear test by the South Korean defense ministry)
2/7/2016
Kwangmyŏngsŏng-3 launched for a satellite(passing over Okinawa Prefecture)
4/23/2016 Firing a submarined launched ballistic missile (SLBM)
9/9/2016
5th nuclear test
7/4,28/2017 Firing Hwasong-14 intercontinental ballistic
missiles (ICBMs)
8/29/2017 Firing Hwasong-12 intermediate range ballistic
missile (IRBM)(The missile passes over Hokkaido without priornotification. The Japanese government issues
a J-alert warning.)
9/3/2017
6th nuclear test (Announced as a successfulhydrogen bomb test for ICBMs)
9/152017
Firing Hwasong-12 IRBM as seen on August 29 some2 weeks ago (The missile passes over Hokkaido without
prior notification again. The Japanese government
issues a J-alert warning.)
Russia
China
North
Korea
Japan
South Korea

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

3

2017/11/23<Reference>

19<Reference>

Unauthorized reproduction prohibited(Source) IEEJ, Asia/World Energy Outlook 2016, Oct. 2016, etc.

(C) 2017 IEEJ, All rights reserved<Reference>20

Supply Disruption (10 Mb/d): Serious Damage to the World Economy

In Prosperity Prepare for Adversity

21

Unauthorized reproduction prohibited(Source) IEEJ, Asia/World Energy Outlook 2016, Oct. 2016, etc.

(C) 2017 IEEJ, All rights reserved22

2. Nuclear Energy Seen from Viewpoint of 3E’s

(1) Energy Security

Gas Supply Disruption Hits Europe

Risk③ Fate of Middle East after birth of U.S. Trump administration❖ Policies of US President Trump →Growing Uncertainty

Notes:
110 Bcm of natural gas≈ 80 Mt of LNG

World

0%

➢ Good news for the US fossil-fuel industry, but output expansion might be limited at current prices

欧州移行経済国
EuropeanTransition
Economies
EuropeanTransition
Economies
EuropeanTransition
Economies
EuropeanTransition
Economies
ロシア
RussiaMiddle East
中央アジア
Central Asia
Central Asia
中東
Middle
East
Korea
欧州連合
European Union
Japan
日本
Japan
European Union
韓国
Korea
Chiniese Taipei
ASEAN
ASEAN
ASEAN
Chiniese Taipei
台湾
India
Africaアフリカ
AfricaIndia
インド
Latin America
Latin America
中南米
United States
United States
米国
Russia
China
中国
China

➢ Revoking the Paris Agreement and Iran nuclear deal could have serious impacts on international
efforts to stop global warming and the Middle East situation➢ New uncertainties in US politics likely to raise crude oil price volatility through financial markets

World「アウトルック2016年」に

世界

台湾を追記（20171024時点）

▲20%

▲10%

▲10%

Energy➢ Energy Independence (particularly from OPEC)➢ Lift the prohibition on development of oil and natural gas on federal land
➢ Create jobs, increase wages, and lower energy prices by easing andeliminating energy development regulations➢ Build oil pipelines and coal export facilities➢ President Trump announces efforts to revive nuclear energy

Environment➢ Possible exit from the Paris Agreement and Climate Change Treaty?
➢ Eliminate environmental regulations adopted by the Obama administration

0%With gas supply disruption, the European transition economies will be hardest hit because of the lower
energy efficiency and higher dependence on natural gas. In case of Russian gas supply disruption, EU
will also be hit hard. Japan and Korea suffer from the gas supply shortage as in the case of oil supply
disruption.

Foreign policy

Natural gas supply disruption causes smaller effect than crude oil disruption because of the smaller
energy value (i.e. 110 Bcm/year natural gas is only 1/5 of 10 Mb/d crude oil).
Unauthorized reproduction prohibited(Source) IEEJ, Asia/World Energy Outlook 2016, Oct. 2016, etc.

(C) 2017 IEEJ, All rights reserved23

2. Nuclear Energy Seen from Viewpoint of 3E’s

Nuclear

Coal

years

LNG

years

Wind
(Onshore)

years

years

Wind
Geothermal(Offshore)
years

years

Ordinaryhydro

Small hydro800,000 yen/
kW

years

years

Small hydroBiomass
Biomass
1 million yen/
(Wood fuel) (Mixed fuel)
kW

years

years

years

Oil

years

Solar PV
(Mega)

Solar PV
(Housing)

years

years

Gas
Oil
cogeneration cogeneration

years

years

Generation
cost
yen/kWh2011 Cost Review
Committee report※1 Fossil fuel prices could drop depending on future policy efforts. Sensitivity analysis results follow:※2 The operating rate in 2011 stood at 80% for Coal and LNG and 50%/10% for Oil.
※3 Figures in parentheses represent costs excluding the policy cost.

Sensitivity analysis for fossil fuel power generation

Coal

LNG

Oil

Impact of a 10% fuel price change (yen/kWh)

About ±0.4

About ±0.9

About ±1.5

Yen/kWh
Explanatory
note
Policy cost

Excluding Accident risk
thermal valueresponse cost
(9.0～10.5)
Excludingthermal value(5.9～6.5)

Oil cogeneration

Gas cogeneration

Solar PV (housing)Solar PV (mega)

Oil

Biomass (Mixed fuel)Biomass (Wood fuel)Small hydroSmall hydroOrdinary hydroGeothermal(C) 2017 IEEJ, All rights reservedWind (Offshore)Wind (Onshore)

LNG

Coal

Nuclear

Unauthorized reproduction prohibited(800,000 (1,000,000
yen/kW) yen/kW)

CO2-related
measure cost
Fuel cost
Operation/
maintenance
cost

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(Source) US President Trump’s website

24(Nuclear energy) What is happening in U.S. ?

Overview of 2030 model plant estimation results and sensitivity analysesPowersources

Rectify interventionism (regime change, etc.) in other countries
Support Middle East countries and forces fighting ISIS and other extremists
Designate China as a currency manipulator and exit the TPPA
Designate Iran as a nation supporting terrorists and possibly revoke thenuclear agreement→Destabilization of the Middle East

<Reference>(2) Economic Efficiency: Power Generation Costs by Source
In Japan, nuclear plants post the lowest cost

Operatingrate
Service life

➢
➢
➢
➢

<Adjustment costs accompanying penetration ofnaturally volatile power sources (solar PV and wind)>Penetration rate fornaturally volatile powersources

Penetration
rate forrenewables

Survey cost

About 66 billion kWh (6%) About 19-21%

About 300 billion
yen/year

About 93 billion kWh (9%) About 22-24%

About 470 billion
yen/year

About 124 billion kWh(12%)

About 25-27%

About 700 billion
yen/year※Penetration rates are based on total power generation at
1,065 billion kWh .

Additionalsafety measure
cost
Capital(Source) Document 3 “Long-term Energy
Supply/Demand Outlook, Related
Documents” p.83 at 11th meeting (July 16,2015) of the Long-term Energy Supply and
Demand Outlook Subcommittee, Strategic
Policy Committee, Advisory Committee for
Natural Resources and Energy➢ In the absence of nuclear plant construction over 30 years,
technology, knowhow and experiences have been lost.
Nuclear regulations have been tightened since the
Fukushima accident, with nuclear plant construction costs
rising.
➢ Gas prices have fallen.
➢ As a result, nuclear energy’s competitiveness has declined
relatively.
➢ However, President Trump declared the revival andexpansion of the nuclear field. May nuclear energy’s shareof the power mix be maintained at around 20% ?
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

42017/11/23<Reference>

25

26

2. Nuclear Energy Seen from Viewpoint of 3E’s

(3) Environmental Friendliness:(Nuclear energy) What is happening in Europe ?

Climate Change Responses Gaining Momentum on Paris Accord
Historical trend of global surface temperature Japan managed to make its target➢ Europe lacks experiences with new-type reactors.
A cost overrun has been seen. Nuclear regulations havebeen toughened since the Fukushima accident.

(Japan’s fossil fuel dependency has risen to 94% (2012))
・・・But, the energy mix was decided with the target

 U.S. revived up, China cannot escape➢ Eventually, nuclear power generation costs have increased.
However, no country other than Germany has adopted
any clear nuclear phaseout policy.

＜U.S.＞ reduced emissions from thermal power by 30%
thanks to shale revolution)(China: coal is a source of PM2.5 pollution)(Source) Fifth Assessment Report of the Intergovernmental Panel on Climate
Change (IPCC) Overview of Summary for Policymakers (SPM) of the Working
Group I (preliminary issue), released by the METI, September 27, 2013

・・・U.S.-China Summit Talks in APEC（Nov. 2014）

Global warming perspective(comparison of CO2 emissions) Consequently, the targets for 2030:

CO2 Emissions
Intensity over the
Entire Lifecycle bySource (g-CO2/kWh)

GHG reduction target in the Paris Agreement➢ May the EU maintain nuclear energy’s share of the powermix at around 20%?

＜Japan＞ 26% reduction by 2030 (compared with 2013)＜ U.S. ＞ 26-28% reduction by 2025 (compared with 2005)＜ E U ＞ 40-45％ reduction (per GDP, compared with 2005)＜China＞ CO2 emissions will peak around 2030.
60～65％ reduction (CO2 per GDP, compared with 2005)

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved<Reference>27<Reference>

28

Japan, U.S., EU, and Taiwan
Greenhouse Gas Emissions (GHG) Reduction Targets

Elements and Issues of Paris Agreement
Paris Agreement

Kyoto Agreement

Estimated 2030* Emissions Reductions
Relative to Different Base Year

（1997）(2015)

Relative to①Mitigation (GHG reduction）
a. Participating countries

INDC*submitting countries :192（as of Apr., 2017）

Countries with reduction duties: 37(US has not ratified)

Bottom up

Top downc. Compliance

No binding mechanism but 5 year review

Legally binding

d. Japan7s joint credit
mechanism

In addition to JI and CDM, International joint
credit mechanism under negotiation

JI (Joint Implementation),
CDM (Clean Development Mechanism)
and International Emission trading

Discussion on global adaptation targets
under way

At the COP15 meeting in Copenhagenin 2009, developed countries agreed toprovide $30 billion in new or additional
funds between 2010 and 2012 andmobilize $100 billion a year until 2020.

③DifferentiatedTreatment between
developed anddeveloping countries

All the countries
including US, India and China

Developed countries, excluding US, areresponsible for reduction of GHG(implemented to reflect equity and the principleof common but differentiated responsibilities
and respective capabilities, in the light ofdifferent national circumstances)(C) 2017 IEEJ, All rights reservedJapan

Relative to2005▲17.9%

2013▲25.4%*▲26.0%**

GHG emissions per GDP(kg/U.S.dollar GDP)

Relative to

BAU

Actual(2015)

Forecast(2030)

―

0.22

0.15
*
0.23～0.24

U.S.

▲12～15% ▲26～28% ▲18～20%

―

0.35

EU

▲40%

―

0.24

▲50%

0.57

*(Target Year 2025)(Target Year 2030)

Taiwan(Target Year 2030)

＋57%

▲35%
▲26%

▲24%
▲25%

0.15
**

(**2013)0.30

N.B: BAU stands for “Business As Usual”◆The U.S. submitted a reduction target compared with 2005 and the EU a target compared with 1990.
U.S. (2005→2025)

EU (1990→2030)(Source) Emission reduction targets: “The NDC interim registry”. For Taiwan, Republic of China (Taiwan), “Intended Nationally Determined Contribution” (Sep.
2015) .
GHG emissions: GHG Inventories. For Taiwan, Taiwan Environmental Protection Administration, “2015 Taiwan Greenhouse Gas Inventory” (Feb. 2016).
GDPs: IEEJ, “IEEJ Outlook 2018” (Oct. 2016).

*INDC（Intended Nationally Determined Contributions）

Unauthorized reproduction prohibited

Relative to

1990(Target Year 2030)

b. Setting targets②Adaptation and funds(Source) Central Research Institute of Electric Power Industry (CRIEPI)“Evaluation of Life Cycle CO2 Emissions of Power Generation
Technologies: Update for State-of-the-art Plants” July, 2010.

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved29

2. Nuclear Energy Seen from Viewpoint of 3E’s

(4) What Happened in Absence of Nuclear Power Generation: In fact not all right

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

Contents

30➢ From the viewpoint of the 3E’s, the situation has seriously deteriorated (2010>2013).
Before2011 disaster(FY2010)

Energy Security

Energy selfsufficiency rate

Economic Efficiency

Power costs(Total primary energy
supply)(Fuel cost + FIT
purchase cost)

20%

6%

5.0 T yen

Fuel cost: 9.2 T yen(Crude oil price:$110/bbl)

9.8 T yen

Fuel cost：5.0 tril. Yen(Crude oil price: $84/bbl)
FIT purchase: 0 tril. yen

Volume factor+1.6 T yen
Price factor+2.7 T yen

FIT purchase: 0.6 T yen

Environment

CO2emissions1.14 B yen

1. Japanese Energy Mix Revision and Its BackgroundAfter2011 disaster(FY2013)

1.24 B yen(Energy-related)→Deteriorating energy
self-sufficiency rate
→Substantial rise inpower charges→Massive CO2 emissions（Sources）Prepared from Document 2 for the first meeting of the Roundtable forStudying Energy Situations (August 30, 2017) and p. 1 of “Reference (progress in attaining
2030 targets)” by the Agency for Natural Resources and Energy➢ Safe seen from viewpoint of “S” ・・・Grounded Aircraft

2. Nuclear Energy Seen from Viewpoint of 3E’s

3. Is Safety Secured ?
4. Why Is Running on 100% Renewables Difficult ?
5. Why Can Germany Phase out Nuclear Plants ?
6. Conclusion➢ No perfect energy seen from viewpoint of “3E’s + S”⇒
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

Quadlemma

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

5

2017/11/23

31

3. Is Safety Secured ?

 Ready technologically

Risk comparison between 100 nuclear
power reactors and natural disasters in
WASH-1400*(Already has world leading technology)⇒ Endured the earthquake.
⇒ Accident caused by “station blackout” due to tsunami.

 Now ready in terms of

institutional aspects (independence)(The problem is the speed of the reviews.)

 Safety culture is beingenhanced

Unauthorized reproduction prohibited

INPO： Institute of Nuclear Power Operations

A report published in 1975 on the
study of the applicability ofprobabilistic risk analysis tonuclear power plants. The study
was conducted by the U.S. Nuclear
Regulatory Commission (NRC) inthe early 1970s and establishedthe framework for probabilisticallyassessing the risks of accidents innuclear power plants in aquantitative manner.

<Reference>

33

Fukushima Daiichi Accident and Safety Concerns

Favorable

Unfavorable

62%
53%
66%

(4) Germany

34%(5) Russia

63%
65%
83%
58%

(2) U.S.
(3) France(6) S.Korea(7) China(8) India

Dental X-ray

0.005 mSv

Transatlantic flight

0.07 mSv

Average annual dose (UK)

2.7 mSv

CT scan (whole body)

9 mSv

Av dose 6M Chernobyl residents

10 mSvAnnual exposure to average smoker

13 mSv

Favorable

Unfavorable

28%

39%

47%

37%

47%
58%

44%

64%

26%

72%

32%

52%
64%
70%
49%

27%

33%

10%
16%
17%

Radiotherapy for breast cancer

50 Sv(Source) Professor Gerry Thomas, Molecular Pathology, Imperial College London “Communicating Health Risks from Nuclear Accidents”（The 80th IEEJ Energy Seminar, March, 2015, presentation material）

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved<Reference>

34

Mail Poll (Yomiuri Shimbun: January-February 2017)
Q: Before the Great East Japan, Japan depended on nuclear energy fornearly 30% of its power supply. What should Japan do in regard to
the nuclear share?

After

Before Mar. 11, 2011
(1) Japan

From the standpoint of medical science …

*WASH-1400(Source) Nuclear Regulatory
Commission (NRC) “Reactor safety
study. An assessment of accident
risks in U. S. commercial nuclear
power plants. ” 1975

※ NRC： Nuclear Regulatory Commission(C) 2017 IEEJ, All rights reserved

32

135g of brazil nuts

US added “station blackout” to its safety standards
following September 11, 2001 attacks.

Two issues:(1) Voluntary safety efforts by operators
In the US, NRC (regulators) vs. INPO (operators)※(2) Public mindset has shifted from the safety myth toabsolute risk
⇒ The ideal is to “lower risks to tolerable levels”<Reference>

Establishing a Safety Culture : Risk Tolerance

Nuclear Safety: from “Safety Myth” to “Reduction of Allowance Levels”

41%A: 1) Increase the share from the level before the disaster

24%
30%
35%

(Source) Gallup International (April 19,2011)

2%2) Restore the share before the disaster19%3) Reduce the share from the level before the disaster50%4) Eliminate all nuclear power plants

26%5) Other, no answer

3%

2011 Fukushima Daiichi accident onwards:
From high nuclear dependency to balancing energy sources ?
• Public opinion is divided on whether to abandon nuclear power•

Unauthorized reproduction prohibited

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(C) 2017 IEEJ, All rights reserved<Reference>

Judicial Stance on Nuclear Power Regulators’ Decisionin Major Countries

US, UK, France, Germany(target NPPs)

Fukui District Court

Oi (no.3,4)(1) (2015/4)

Takahama

Fukui D.C. (2)

and

Japan

(no.3,4)

Otsu D.C.

Takahama(‘15/12)

Decided by the Court(New regulatory requirements
are too loose and lack rationality)

Respect the regulator’s
decision (NRA’s decision iscompletely rational)

Decided by the Court(‘16/3)(no.3,4)(Feel reluctant to consider the
regulatory requirements as thefoundation of public safety)<Reference>

Review any defects in the regulatory
procedures

Relations with Nuclear Power Plant Host Communities
U.S.

・Learning lessons from a case in which a nuclear plant operation approval failed to be issued due to a hostcommunity’s policy change after the construction of a nuclear plant, the United States introduced theintegrated approval of nuclear power plant construction and operation.
・State governments control coolant water supply, preventing operation approval renewal in some cases.

U.K.

・Local community groups are organized, comprising business operators, central and local governments, local
assemblies, military forces, trade unions, etc.
・Regulatory authorities provide community groups with quarterly nuclear power plant operation reports andconduct open briefings and question-and-answer sessions. However, regulatory activities and decisions onwhether to restart reactors after regular checkups remain unaffected.

France・Local information committees are organized, comprising politicians, environmental protection groups,
economic organizations, trade unions, medical experts, etc.
・Local governments and information committees are given opportunities to hold hearings and provide
opinions, but have no power to decide whether to approve facility installation or plant operation.

Germany・The federal government controls nuclear fuel and radioactive waste and commissions state governments toregulate nuclear plant safety.

Japan・Nuclear power plant hosting communities (prefectures and municipalities) conclude nonbinding safety
agreements with plant operators.
・In a nuclear power plant restart process after the Fukushima accident, plant-hosting communities’ approvalhas become effectively indispensable.

―
Decided there were no defects in theregulatory procedures.
By pointing out defects in theregulatory procedures, they seem tostep into the matter of safety.

Osaka High Court(‘17/3)

Sendai(no.1,2)

Kagoshima D.C. (‘15/4)
Fukuoka H.C.'s
Miyazaki branch (‘16/4)

Ikata (no.3)

Hiroshima D.C. (‘17/3)
Matsuyama D.C. (’17/7)

Genkai

Saga D.C. (‘17/6)(no.3,4)

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

Respect the regulator’s
decision (NRA’s decision iscompletely rational)

Decided there were no defects in theregulatory procedures.

（ As of Oct 24, 2017 ）36

Local Risks: Relations with Nuclear Power Plant Host
Communities in Major Countries

Process of establishing new
regulatory requirements andcompliance review

Matters concerning
safetyRespect the regulator’s
decision

35

Unauthorized reproduction prohibited(Source) IEEJ(C) 2017 IEEJ, All rights reserved

62017/11/23<Reference>

37

Slow but Steadily Restart
Nuclear Power Plants in Japan

2. Number of reactors underscreening by the NRA（Decommissioning of the Fukushima Daiichi）No.1～6（Decommissioning old units）
Mihama No.1, 2 Tsuruga No.1 Shimane No.1
Ikata No.1
Genkai No.1

42
21(＝ 26 – 5 )SendaiNo.1 : Sep. 2015
(After a regular checkups (Oct. 2015-Jan. 2017),
commercial operation resumed on Jan. 6, 2017. )Sendai

3. In operation

No.2 : Nov. 2015
(After a regular checkups (Dec. 2016-Mar. 2017),
commercial operation resumed on Mar. 24, 2017.)

4 Takahama(Commercial Operations)38

Status of Nuclear Reactors Approved After Implementation of New Regulatory
Standards (on July 8, 2013) (4 in operation, 1 under checkups, 7 under screening)(＝ 54 – 6 – 6 )1. Number of reactors that canbe used now<Reference>

Takahama

No.3: Feb. 2016 (❖2 restart; July 4, 2017)

No.4: June 16, 2017 (❖2)---------------------------------------------------------------------------（ Regular checkups 1 ）Ikata
No.3 : Sep. 2016 ❖1 STOP: Regular checkups(Oct. 3, 2017- est. Jan. 2018)

Unauthorized reproduction prohibited

StatusCompany

Reactor

Test operation

Commercial operation

Suspension duration

Notes

In
operation

KyushuE.P.

Sendai
Unit 1①August 2015
②December 2016

①9/10/2015-10/6/2016②1/6/2017-

Regular checkups
10/6/2016-1/6/2017

Resuming operation after regular checkups
within 13 months after commercial operation①11/17/2015-12/16/2016②3/24/2017-

Regular checkups
12/16/2016-3/24/2017

Resuming operation after regular checkups
within 13 months after commercial operation

District court order
3/10/2016-3/28/2017

Takahama Units 3 and 4 were shut down due
to a district court temporary injunction orderfor suspension. After a high court cancelled
the temporary injunction order on March 28,
2017, they will restart after ➍ passing
checkups.

Regular checkups
10/3/2017-(around
1/20/2018)

Under regular statutory checkups within 13
months after commercial operationIn
operation

KyushuE.P.

Sendai
Unit 2①October 2015
②February 2017

In
operation

KansaiE.P.

Takahama
Unit 3①January 2016
②June 2017

①2/26/2016-3/10/2016②7/4/2017-

In
operation

KansaiE.P.

Takahama
Unit 4①February 2016
②May 2017(March 2016 ➍Suspension forcheckups)①6/16/2017-

Underregularcheckups

Shikoku
E.P.

Ikata
Unit 3①August 2016

①9/7/2016-10/3/2017

Under
screening

KansaiE.P.

Oi
Unit 3➊➋➌Approval ➍Pre-use checkups (application on
August 28, 2017)

Pursuing restart in or after January 2018

Under
screening

KansaiE.P.

Oi
Unit 4➊➋➌ Approval ➍Pre-use checkups (application on
August 28, 2017)

Pursuing restart in or after March 2018

Under
screening

KyushuE.P.

Genkai
Unit 3➊➋➌Approval ➍Pre-use checkups (application on
August 28, 2017)

Pursuing restart in or after January 2018

Under
screening

KyushuE.P.

Genkai
Unit 4➊➋➌Approval ➍Pre-use checkups (application on
September 15, 2017)

Pursuing restart in or after March 2018

Under
screening

KansaiE.P.

Takahama
Unit 1➊➋Approval ➌Before application

Pursuing restart in or after August 2019

Under
screening

KansaiE.P.

Takahama
Unit 2➊➋Approval ➌Before application

Pursuing restart in or after March 2020

Under
screening

KansaiE.P.

MihamaUnit 3➊➋Approval ➌Under screening (application on March
1, 2015)

Pursuing restart in or after March 2020

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved(As of October 20, 2017)(C) 2017 IEEJ, All rights reserved<Reference>

39

Impact of Restart of Nuclear Reactors on the Japanese Economy: Realization of “”?

40Contents

Effect of differing paces for restarting nuclear power plants [FY2018]

Nuclear power
presupposition

Zero
Case

Reference
Scenario

High
Case

[5]

[9]

[9]

restarted nuclear reactors End of FY2018

0

5

10

17

Average period for operation(months)

0

10

9

8

0

31.6

[End of FY2017]

65.6

99.4

Power supply composition ratio

0%

3%

7%

10%

Electricity unit cost1 (JPY/kWh)

6.1

5.9

5.8

5.6

Power generation by nuclear (TWh)3.8

Fuel cost
Total fossil fuel imports (JPY trillion)

3.7

3.5

3.4

2.3

2.3

2.3

2.3

15.2

15.0

14.7

14.5

FIT purchasing cost
Economy

Low
Case

[0]

Cumulative number of

9.0

Oil

8.9

4.0

LNG

8.8

3.8

8.7

3.7

3.5

1.5

1.7

2.0

2.2

Real GDP (JPY2011 trillion)

536.1

536.3

536.6

536.9

Gross national income per capita (JPY thousand)

Trade balance (JPY trillion)

4,361

4,363

4,365

4,367

Oil (GL)

197.3

195.1

192.8

190.8

Natural gas (Mt of LNG equivalent)

90.0

86.8

83.4

79.9

86.8

83.7

80.3

76.7

Self-sufficiency rate

9.9%

11.3%

12.8%

14.3%

Energy-related CO2 emissions (Mt-CO2)

1,126

1,111

1,096

1,081

ment

Environ-EnergyPrimary energy supply

LNG imports (Mt)[▲8.8%] [▲10.0%] [▲11.3%] [▲12.5%]

Changes from FY2013“Reference Scenario” : Nine nuclear
power plants restart by the end of
FY2017. Ten plants in total restart by
the end of FY2018.

1. Japanese Energy Mix Revision and Its Background“Low Case” : Five nuclear power
plants restart by the end of FY2018.

3. Is Safety Secured ?

“High Case” : Nine nuclear power
plants restart by the end of FY2017.
Seventeen plants in total restart by
the end of FY2018.

4. Why Is Running on 100%
Renewables Difficult ?

2. Nuclear Energy Seen from Viewpoint of 3E’s

“Zero Operation Case” :We assume that no nuclear power
plant will be in operation in FY2018.
This case is prepared for comparison
with the other cases.

5. Why Can Germany Phase out Nuclear Plants ?
6. Conclusion

1. Sum of fuel cost, FIT purchasing cost and grid stabilising cost divided by total power generation.
(Source) IEEJ, Economic and Energy Outlook of Japan through FY2017, July 2016(C) 2017 IEEJ, All rights reserved41

4. Why Is Running on 100% Renewables Difficult ?

60

60

0

100
0

0

2014

2015

2016

20

120

20

7101 4 7101 4 7101 4 7101 4 710 3

30

10

20

2012 2013

40

GW

40

80

2017

7101 4 7101 4 7101 4 7101 4 710 32012 2013

2014

2015

2016

2017

the revocation ofcertification capacity(estimated)

50

Authorized40

JPY trillion

Solar PV for
non-

Wind

Solar PV for

Othersresidenceresidence60➢ Consumer burden related to renewable electricity generation is soaring.

The total consumer burden for the next 20 years will reach 77 trillion yen by operating just the 105 GW capacity installed
40 2017. This inevitable burden is equivalent to a 4.5 yen/kWh rise in tariffs, or 27% forand licensed as of the end of March
industrial and 19% for residential sectors.

➢ However, excluding the revocationof certification capacity (an estimated 27.7 GW (METI estimate, end of March
202017)), the cumulative total amount is 59 trillion yen. This inevitable burden is equivalent to a 3.4 yen/kWh rise in tariffs, or
21% for industrial and 15% for residential sectors.
0➢ The rapid increase in solar power with high purchase price is greatly increasing the burden. The burden will grow further as
7101
4 as
7101
4 power,
7101 4start
7101
4 710 3in addition to solar power.
power sources with longer lead times,
such
wind
operation
Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

2012 2013

42

Solar PV cost comparison(Japan and Europe)

Source: Agency for Natural Resources and Energy, “Status of Introduction of Renewable Electricity
2014 Generation
2015 Facilities
2016
2017
(end ofMar. 2017)”, Aug. 2017**(Latest as of Oct. 30, 2017)

Wind power generation costcomparison (Japan and World)* Excluding Chinese projects* 108.6 yen/USD

System price (10,000 yen/kW)

80

中小水力

operatiing

100

80

地熱

Solar PV for residence
Solar PV for non-residenceWind
Biomass
Geothermal
Small/Medium-scale Hydro

operatiing

100<Reference>

Japan's total FIT surcharge【Installed
Capacity】
非住宅PV
風力

住宅PV
バイオマス

Authorized

中小水力

operatiing

GW

地熱

Authorized

120

バイオマス

operatiing【Authorized】GW
住宅PV
非住宅PVcapacity
風力Authorized

Feed-in Tariff (FIT) development
GW120(C) 2017 IEEJ, All rights reserved

Issue Involving Renewables: Can costs be cut ?

(1) Renewable Energy Costs Are Still HighGW

Unauthorized reproduction prohibited

134,000 yen/kW

OthersInstallation

Others (BOS)
Mount
PCS
ModuleCapital cost (10,000 yen/kW)

Unauthorized reproduction prohibited

Japan
Japan (2016)

Europe (2014)

Windmill(excluding tower)

Windmill(tower)Overseas*
Construction cost

Electric
equipment

Others(Note) Nonresidential solar PV system price(Source) METI,“Report by Research Panel on Enhancement of Solar PV’s
Competitiveness”, October 2016

(Source) METI “Report by Research Panel on Enhancement of Wind Power’s
competitiveness” October 2016

• High costs are attributable to the industry’s multi-layer subcontracting structure, the absence of any competitivemarket, etc.

• It is pointed out that high FIT tariff prices impeded the development of a competitive market.
• The introduction of an auction system (planned for October 2017 for nonresidential solar PV systems), theestablishment of a FIT tariff price reduction schedule and other initiatives under the revised FIT Act are
implemented to enhance renewable energy power generation’s competitiveness and cut relevant costs.

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

7

2017/11/23

43

4. Why Is Running on 100% Renewables Difficult ?

<Reference>

44(2) Backup power sources are required for renewable energy(solar PV and wind) power generation

Promoting Renewable Energies with Revised FIT System• Although former general power utilities, power producers and suppliers, and the Japan
Electric Power Exchange are separately attempting to optimize their respective operations,
it is desirable to pave the way for them to unify their optimization methods as much as
possible to minimize revisions by the power transmission and distribution sector.

➢ Balance among renewable power sources

May 3-6 2016 conditions in Kyushu Electric Power’s service area

(10,000 kW)

1,200

70%

Interconnection link

1,000

60%

Pumped hydro50%

Other renewables

40%

Solar PV

30%

Hydro

20%

Fossil10%

Nuclear0%

Power
consumption
Net load

800
600
400
200

Pumped hydro and LNG power
plants are required to back up
renewable energy power generation

Net load curve ofcontrol target

0
-200
-400

1 4 7 1013 1619 22 1 4 7 101316 1922 1 4 7 1013 161922

5/3/2016

5/4/2016

 Bidding system; set a buying price that reflects a price goal Consider international competition and energy savings efforts in designating fee alleviation or
exemption for high-volume electricity users➢ Realization of efficient power transactions and distribution（← Renewable energy grid-connection suspension issues
occurred at Kyushu Electric and others in 2014)

 Change obligatory buyers to transmission firms→Improve broad-area power sharing（Revised FIT Act）”Act on Revisions to Portions of the Special Measures Act on Procurement of Renewable Energy
Electricity by Electric Power Firms”（Passed on May 25, 2016, promulgated on June 3, and takes effect on April 1, 2017）(Source) Kyushu Electric(C) 2017 IEEJ, All rights reserved➢ Improve cost efficiency（← Buying costs likely to reach about 2.3trn yen）

5/5/2016

Unauthorized reproduction prohibited（← About 90% of FIT approved volume is business solar power）

 Apply stricter approval criteria (completion of connection contracts, maximum three years fromapproval to operation, etc.)
 Present FIT for a few years forward in the case of power sources with substantial lead time

Unauthorized reproduction prohibited(C) 2017 IEEJ, All rights reserved

45

Contents46

5. Why Can Germany Phase out Nuclear Plants ?

1. Japanese Energy Mix Revision and Its Background
2. Nuclear Energy Seen from Viewpoint of 3E’s

Differences between Japan and Germany➢ Geographical differences: Germany is located at the center of the EU power network where power demand isnearly 10 times as much as in Germany alone.
: Germany can import or export power if necessary.
: Germany can accommodate more unstable renewable energy power sources.

3. Is Safety Secured ?

➢ Differences in natural conditions: Germany, though with less solar energy resources, has stable wind energy sources.

4. Why Is Running on 100% Renewables Difficult ?

A combination of solar and wind power generation can moderate the fluctuation ofvolatile renewable energy power generation.

5. Why Can Germany Phase out
Nuclear Plants ?

➢ Topographical difference: Germany has more flat lands and wider shoals.

➢ National character differences: Germans think that if any target fails to be achieved, policies should be revised.

6. Conclusion

However, such approach cannot be adopted in Japan that cannot import power.

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Geographical Difference Between Japan and Germany
Electricity Service Networks
in JapanInternational Grid Connections in Europe

Northern European gridContents48

1. Japanese Energy Mix Revision and Its Background

2. Nuclear Energy Seen from Viewpoint of 3E’s

Baltic grid

3. Is Safety Secured ?

British grid

4. Why Is Running on 100% Renewables Difficult ?
5. Why Can Germany Phase out Nuclear Plants ?
【Basic service networks】
500,000-volt
transmission lines
154,000-275,000transmission lines

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6. Conclusion

Synchronous grid ofContinental Europe
Northern African grid

Turkish grid

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2017/11/23

Conclusion

4950

1. After the Fukushima nuclear power plant accident following the Great East Japan Earthquake
and Tsunami, Japan revised its Basic Energy Plan and energy mix. Its policy priority
shifted from the “3E’s” to the “3E’s plus S.” The key point of the energy mix shifted fromheavy dependence on nuclear energy to diversity.

2. From the viewpoint of the 3E’s, nuclear is still an excellent energy source. After all
nuclear plants were shut down, particularly, the 3E’s deteriorated substantially.
3. “S” has been fundamentally revised and improved from the viewpoint of the regulatory
scheme. The future challenges include the spread of the tolerable risk theory among
citizens, in addition to safety culture for enterprise efforts.

4. Renewable energy still features high costs in Japan. Backup power source costs will
expand to stabilize power supply.

5. Germany that is said to be able to phase out nuclear power plants has geographical andnatural condition advantages.
6. For its sustainable development, Japan has no choice but to use multiple energy sources,
including imperfect nuclear energy, in a balanced manner under the principle of the“3E’s + S.”
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Ranked for three consecutive
years within the Top-3 in thearea of Energy and Resource
policy, according to the 2017
Global Go To Think Tank Index,
University of Pennsylvania
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