Decarbonisation & Japan

July 3, 2018

Japan’s energy and decarbonization challenge

The government has just reviewed its energy strategy or Basic Energy Plan — the first review in four years. In the 2017 COP23 United Nations Climate Change Conference held in Bonn, Germany, an international network of nongovernmental organizations awarded the Fossil of the Day prize to Japan. But in reviewing its energy strategy, Japan has declared that it will meet the challenge of developing new energy sources and technologies and achieving decarbonization under a long-term timetable stretching to 2050 by taking into consideration the Paris agreement adopted at the 2015 COP21 conference.

The energy landscape has undergone rapid changes in recent years.

First, the prices of energy from renewable sources have fallen on a global scale and new endeavors to develop new technologies for decarbonization, such as energy storage and digital control technologies needed for large-scale introduction of renewable energy, have started with the participation of a wide range of industrial sectors.

Second, new risks that are qualitatively different from conventional geopolitical risks have arisen with the rising presence of emerging powers such as China and India.

Third, competition for dominance in technological development for decarbonization has kicked off among major countries and energy companies, leading people to anticipate the emergence of a society in which technologies will serve as key resources.

In foreseeing the situation in 2050, it must be recognized that the degree of uncertainty for the future is extremely high. At the same time, the high degree of uncertainty means that there will be possibilities in the future. In facing an era of both uncertainty and possibilities, it will be important not only to set an ambitious goal to pursue the possibility of every option but also to consider multiple scenarios that should be scientifically reviewed on the basis of the latest technological trend and global situation for flexible adjustments.

To begin with, Japan, poor in domestic energy resources, is an insular country with no power transmission networks connected with other nations. Therefore it has tried to cope with its intrinsic situation by exploring the possibility of every energy source to achieve the best mix of 3E+S — energy security, economic efficiency and environmental protection with safety serving as the major premise.

In developing Japan’s energy strategy, the recent experience of Germany offers a useful suggestion. Germany is trying to achieve decarbonization by fading out nuclear power and expanding renewable energy sources. But now it faces difficulty in reducing its dependency on coal-fired thermal power generation although its use of renewable energy sources is expanding. It must be noted that as a result, its reduction of carbon dioxide emissions has become slow and household electricity bills have risen.

It also must not be forgotten that a nation like Germany, which can sell or buy electricity to and from neighboring countries through international power transmission networks, can absorb to some extent the fluctuation of power output from renewable energy sources by means of export and import of electricity.

In any case, each country is trying to build an optimum energy system under its given conditions, which are different from one country to another. In this situation, it is important to develop an energy policy under the 3E+S approach.

Let me discuss individual energy sources. The first is a zero-carbon emission power source consisting of renewable energy sources and nuclear power.

After the Great East Japan Earthquake of 2011, Japan reviewed its nuclear power policy from scratch. While seeking to reduce the dependency on nuclear energy for power supply as much as possible, the energy policy aims to squarely tackle the problem of the high cost of renewable energy sources — which remain relatively high compared with overseas — so as to turn the renewables into a major power source.

In view of the fact that nuclear power is an important option already in use for achieving decarbonization, Japan will immediately start seeking reactors excellent in safety, flexibility and economic efficiency as well as developing back-end technologies to win back public trust in nuclear power.

The second is coal-fired thermal power. Currently Japan has highly advanced technologies to utilize coal. For example, by introducing an integrated gasification combined cycle (IGCC), which uses a high-pressure gasifier to turn coal and other carbon-based fuels into pressurized gas, and an integrated gasification fuel cell cycle (IGFC), a fuel cell-based power cycle consuming gasified solid fuels such as coal and biomass fed directly to fuel cells operation at high temperature, it will become possible to cut carbon dioxide emissions significantly even compared with the latest coal-fired plant currently in use. (IGCC will be able to reduce the emissions by about 10 percent more and IGFC 30 percent.) Japan is currently building a large, commercial-use IGCC power plant and carrying out a demonstration experiment of IGFC.

Japan can greatly contribute to reducing global greenhouse gas emissions by passing its highly efficient coal-utilization technologies to countries that have no other choice but to rely on coal as an energy source. Japan, on the other hand, will phase out its low-efficiency coal-fired power generation.

Japan’s journey toward 2050 has just begun. It will try to accomplish an ambitious goal of achieving an 80 percent reduction in greenhouse gas emissions on multiple scenarios that will be scientifically reviewed. Although the goal is ambitious, the approach will be flexible. Concrete measures must be worked out from now on.

To achieve the goal, the government and the private sector must fully cooperate. In partnership they will push innovative technological development in areas needed for decarbonization, such as power storage, use of hydrogen, nuclear power, diversification of energy sources and heat utilization.

In the financial market, where environmental, social and governance criteria are gaining importance recently, energy companies and the financial sector will have dialogue to build a funding circulation mechanism, in which they will jointly write a scenario to change the energy landscape and pursue decarbonization.

Since the annual global carbon dioxide emissions top 30 billion tons, with Japan emitting roughly 1.1 billion tons, it is clear that worldwide proliferation of non-carbon technologies is indispensable. Japan will serve as a bridge to link energy-consuming nations and resource-rich countries.

Japan is determined to contribute to and fulfill development of new energy sources/technologies and decarbonization, a long-term goal of humankind, by implementing policies under the new basic energy plan.

Tomoaki Nakanishi is former director of the International Affairs Office of the Natural Resources and Energy Agency at the Ministry of Economy, Trade and Industry.