Japan’s Power Structure in Need of Re-Thinking
Hiroshi Hamasaki
Research Fellow
June 9, 2011 (Thursday)
The Tohoku region was severely affected by the unprecedented disaster of March 11, and even now Fukushima Reactor 1 is touch and go. Nuclear power was expected to play an important part in Japan’s energy security and global warming countermeasures. However, due to the Fukushima incident, the emotions of the citizenry are unlikely to permit the planned 9 new plants by 2020, 14 by 2030, and significant increases in rate of plant operation, which once held so much promise. Therefore, the Basic Energy Plan, which was instituted in June, 2010, and lays out Japan’s energy strategy heading towards 2030, will require substantial re-thinking.(1) In this report, I consider Japan’s future power structure and how Japan will deal with energy security and global warming. This is a preliminary report; I will revisit this discussion in the future as the situation changes.
1. What Will Happen to the Power Structure?
We at Fujitsu Research Institute’s Economic Research Center ran a simulation(2) of Japan’s power structure from the time of the earthquake leading up to 2020 using a Dynamic General Equilibrium Model which describes in detail the technology of the power sector. Table 1 summarizes the results of the simulation and compares them with the Basic Energy Plan and the IEA’s World Energy Outlook (2010). FRI’s estimates are for 2020, while those of the Basic Energy Plan are for 2030 and those of the IEA are for both 2020 and 2030.
First, looking at the power structure in 2030 according to the BEP, nuclear power’s share has risen drastically compared to 2007 (25.6% in 2007 ⇒ 52.6% in 2030). Furthermore, renewable energy has also increased greatly from 8.6% in 2007 to 21.0% in 2030. Conversely, the share of power produced by fossil fuels, such as coal, oil, and LNG, has dropped. Consequently, zero-emissions power has increased from the current 34% to approximately 70% by 2030, and self-produced energy from 38% to approximately 70%. This has also achieved a reduction of CO2 emissions due to power production by 30% of 1990 levels.
However, according to our simulation, as a result of the earthquake of March 11, it will be necessary to rely on fossil fuels, such as coal, oil, and LNG, to pick up the slack left by nuclear power plants which have stopped operations. Because of this, the power-source zero emissions of 2020 reaches only 27.9%, well below even 2007’s (recorded) 34.2%.
Table 1: Comparison of Japan’s Power Structure
| Basic Energy Plan | IEA | FRI Estimate | |||
|---|---|---|---|---|---|
| 2007 | 2030 | 2020 | 2030 | 2020 | |
| Coal | 25.3% | 11.1% | 21.6% | 13.4% | 28.1% |
| Oil | 13.2% | 2.0% | 2.7% | 2.3% | 14.4% |
| LNG | 27.4% | 13.3% | 29.2% | 25.8% | 29.7% |
| Nuclear | 25.6% | 52.6% | 33.3% | 41.0% | 16.7% |
| Renewable | 8.6% | 21.0% | 13.2% | 17.5% | 11.2% |
2. Balancing Energy Security and Global Warming Countermeasures
According to the above, by 2020, fossil fuels (coal, oil, LNG) will comprise 72.1% of Japan’s power generation shares. Considering that fossil fuels had only 65.8% of shares in 2007, this means that their shares will have increased. Japan’s inability to increase its nuclear power generation requires us to consider two important points. First, using alternate forms of power generation to fill in for those nuclear plants which have stopped operation will cause an increase in greenhouse gas emissions. As I wrote in a previous Current Topics article, the earthquake of March 11 will cause GHG emissions to be 4.6% greater (relative to 2004 levels) than if the earthquake had not occurred. The other point to consider is that, because we can no longer anticipate the building of any new nuclear power plants, fossil fuel-produced power will be necessary to meet growing demand, and making power production low-carbon will become difficult.
For Japan, a country poor in fossil fuel resources, ensuring the stable supply of fossil fuels will be an extremely important policy issue with regards to Japan’s future energy security. In particular, demand for fossil fuels in China and India are predicted to increase, and it is entirely possible that fossil fuel prices will rise sharply and securing fuel will become more difficult.
Furthermore, we must think even harder about making use of renewable energies. Market pull policies such as Feed-in Tariffs are being promoted, but technological pushes due to improvements in technological development will be necessary as well.
3. In Closing
As a result of the earthquake, Japan must re-think its energy strategy and its global warming countermeasures strategy from the ground up. Moving forward, building new nuclear power plants and greatly increasing the rate of operation of existing facilities will be extremely difficult, and therefore Japan must develop a new strategy which balances economic growth and the problem of global warming as quickly as possible. In addition to securing fossil fuels and improving renewable energy, as described above, it is also necessary to improve the efficiency of fossil fuel thermal power generation plants (energy saving) and drastically reduce power demand. The time has come to transform Japan’s cities, and the country as a whole, into a low-carbon, low-energy-consumption society.
Notes
(1): Sankei Biz Web Edition, 4/5/2011, 05:00, “METI undertakes review of Basic Energy Plan. Inspecting the incident, draft to be prepared this year.“
(2): The simulation assumes that nuclear power plants currently stopped due to the earthquake will not produce power, and that no new nuclear power plants will be built. Estimates of the power structure up to 2020 were made under this condition. It is also assumed that no constraints are imposed on CO2 emissions and that power is supplied at the lowest possible price.
(3): METI, Resource Energy Office (2010),
(4): Here, renewable energy and nuclear power are considered zero-emission power sources.
(5): Only CO2 at source.
