Japan Energy Update

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Japan Energy Update

• Kae Takase
• Senior Economist
• Governance Design Laboratory

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Energy and Economy to 2030 (reference)
Economy is assumed to grow by 2 to 2010, 1.7 to
2020, 1.2 to 2030. But energy demand is not
supposed to grow, but to decrease since 2021.
Billion yen (1995 prices)
Million kl of crude oil equivalent
Gov. Reference
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Reference assumption (2)

• Economic growth
• TFP (total factor productivity) is assumed to
  increase 1/year.
• Labor force will continue to decrease since 1997.
• Unemployment rate will be around 4.

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?CO2?CO2/E?E/GDP?GDP
Japanese government expects very high E/GDP
reduction for the future. Renewable scenario for
2030 does not show much CO2/E reduction.
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?CO2?CO2/E?E/GDP?GDP/POP?POP
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Energy intensity of GDP (reference higher
efficiency)
Energy intensity of GDP is assumed to decrease
very fast.
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CO2 Emission
Kyoto target is set to -0 of 1990 level for CO2
emission from energy, and it is expected to be
accomplished by additional policies.
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CO2 Emission in 2003
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Final Demand by sector (reference)
Energy demand decrease in industrial sector, but
increase in other sector (except for cargo after
2010).
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Final Demand by sector (reference energy saving
tech.)
Kyoto target
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Policy Measures for Kyoto target 1) Industry
Unit 0000 kl (Crude oil equivalent)
Japan Federation of Economic Organizations
(Nippon Keidanren)
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Policy Measures for Kyoto target 2) Residential
Commercial
Unit 0000 kl (Crude oil equivalent)
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Policy Measures for Kyoto target 3) Transportation
Unit 0000 kl (Crude oil equivalent)
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Policy Measures for Kyoto target 4) Trans-sectoral
Unit 0000 kl (Crude oil equivalent)
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Policy Measures for Kyoto target 5) Transformation
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Summary of Government Outlook (1)

• Energy demand is expected to increase gradually
  to 2030.
• Structural change in economic activity
• Demand grows for residential, commercial, and
  passenger transportation.
• Nuclear generation plan has became smaller since
  last outlook. (13 ? 4 plants until 2010)
• Policy to raise capacity factor for Kyoto target.
• From 2010 to 2030
• High nuclear case 413 (capacity factor 90)
• reference 46 (85)
• Low nuclear case 44 (85)

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Summary of Government Outlook (1)

• Kyoto target is set to -0 of 1990 level, but it
  is a challenging target.
• -6 is planned to meet by flexibility measures
  (emission trading, CDM, etc) and carbon tax.

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Japan LEAP model for AES04
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Scenarios

• Reference
• Follows IEEJ (Institute of Energy Economics,
  Japan) forecast in 2002.
• National Alternative
• Additional policies for less nuclear and more
  renewables and energy efficient technologies.
• Regional Alternative
• Additional policies with North East Asian
  regional cooperation.
• All scenarios are calculated from 2000 to 2030.

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Regional Alternative (1)

• Pipeline Oil Import from Siberia
• 1 million bbl/day, from 2010, 1.5/bbl higher
  price
• Pipeline Gas Import from Sakhalin
• 6 million ton from 2015, price is set 3/GJ in
  2005 (rise at the rate of crude oil price)
• Electricity import from Sakhalin
• 2GW from 2012, 4GW from 2014, 5 USC/kWh (fueled
  by natural gas)

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Regional Alternative (2)

• Oil Refining on Commission with China
• 10,000 bbl/day in 2004, increase to 60,000
  bbl/day in 2010, remain same until 2015, finish
  in 2016
• Commission fee is set 3/bbl
• Regional Cooperation in Nuclear
• Funds
• Nuclear Research 8 million USD from 2007 to
  2015, raise to 100 million USD until 2025, raise
  to 300 million USD by 2030
• Waste Agreement 8 million USD from 2006 to 2015,
  25 million USD from 2016 to 2030
• Cooperation in Energy Efficiency and Renewables
• Funds
• Energy Efficiency cost 1/HH since 2006 (approx.
  50 million USD/year), Renewables cost 50 million
  USD/year to Elec. Gen.
• Effect
• 2 years earlier implementation of technologies in
  energy efficiency and renewables
• Cost reduction by 10

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Total Cost of scenarios
These costs are annual (not cumulative) costs,
and are relative to the reference case.
Billion Japanese yen (2002 Price)
NANational Alternative, RARegional Alternative
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Difference with reference (Primary)
Unit 1010kcal
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Comparison with other outlook Final Energy Demand
Unit 1015J
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Self-sufficiency
Definition of self-sufficiency production of
fossil fuel, renewable energy (including
geothermal , hydropower, and waste), and nuclear
energy.
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CO2 Emission
Index 20001
reference
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Summary

• Regional cooperation needs higher cost in early
  years, but results in lower cost in a long run
  (comparing with national alternative).
• More energy efficiency measure and renewables are
  installed in RA, but the cost of them decline,
  and the total cost becomes lower even more are
  installed.
• Regional cooperation policy would result in
  higher regional-self-sufficiency. (BAU 23, NA
  22, RA 33)
• CO2 emission slightly lower emission in regional
  alternative than national alternative