Balance is key to prosperity in Japan’s energy policy

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Author: Masakazu Toyoda, Institute of Energy Economics

Few people would have thought that the Ukrainian crisis would come a few months after the COP26 climate conference. People around the world are now thinking about the added complexity of achieving decarbonization while ensuring energy security.

In mid-October 2021, Prime Minister Fumio Kishida’s cabinet approved Japan’s Sixth Basic Energy Plan. The plan represents a concrete roadmap for achieving two commitments made by former Prime Minister Yoshihide Suga: to decarbonize by 2050 and to achieve a 46% reduction in greenhouse gases (baseline year is 2013 ) by 2030.

the Ukrainian crisis inflated oil, gas and coal prices which were already on the rise due to the recovery of COVID-19 and sparked calls for a reduction in dependence on Russia. Europe, very dependent on Russia, was seriously affected. But the impact of the crisis on Japan should be less severe due to its more balanced energy mix and diversified import sources. This is because Japan’s energy policy is guided by the principle of safety, energy security, environment and economic efficiency (S+3E).

With regard to this S+3E policy, balance without dependence on a single energy source is essential. Japan imports nearly 92% of its primary energy, but it also tries to diversify its import sources as much as possible. Thus, its dependence on Russia for oil and gas is less than 10%.

Renewable energy is certainly good for energy security, but Japan and many ASEAN countries face certain limitations in expanding their renewable energy capacity due to weather constraints and geographical characteristics.

Since Japan values ​​the balance of these four elements, a balanced energy mix is ​​envisaged not only for 2030, but for 2050. Several scenarios are planned for 2050. In the reference energy mix scenario, 5060 percent should be renewable energy, 3040% will be thermal energy – via carbon capture, utilization and storage (CCUS) and nuclear energy – and 10% will be hydrogen and carbon-free ammonia.

In 2030, 3638% of Japan’s energy is expected to be renewable, 2022% nuclear, and the remaining 42% will be oil, natural gas, coal and carbon-free hydrogen or ammonia 2%, 20%, 19% and 1% respectively. The plan calls for coal co-combustion with 1% carbon-free hydrogen and ammonia and this ratio is expected to increase significantly.

Japan needs to ensure that a balance of energy sources is in place. Japan, when decarbonizing its economy, is trying to decarbonize and use fossil fuels in the form of carbon-free hydrogen or ammonia. This is because the policy focuses on emissions as the cause of the problem, not on fossil fuels. Some people may think of safety issues with nuclear energy while others may think of the limit on renewable energy in Japan.

If CO2 is properly sequestered and decarbonized by CCUS, we can use it to its full potential. Co-combustion of coal with ammonia is one such idea. Coal is produced in more diverse and politically stable countries and can contribute better to energy security than natural gas. Coal power plants can be mixed with 5060% hydrogen or ammonia.

If coal-fired power plants can be co-fired to this extent, they will be comparable to gas-fired power plants in terms of CO2 emissions. The final objective is to obtain a monocombustion of ammonia or hydrogen without carbon. The cost-competitive option should be adopted between hydrogen and ammonia based on renewable energy or based on fossil fuels. But here the focus will also be on balance. Japan is also trying to share co-firing technology with Asian countries.

Starting from the idea that fossil fuels can be decarbonized, Japan considers that fossil fuels are not stranded assets and that new investments are necessary. The policy positions itself as “global resource diplomacy”. Within the framework of multilateral cooperation, it will actively contribute to ensuring new investments for fossil fuels, innovation cooperation for fossil fuel decarbonization and the formation of international rules for methane control and carbon trading. credits, among others. In this sense, the Ukrainian crisis should encourage many countries to share Japan’s energy policy.

Accelerating the nuclear takeover is also essential. Before the Fukushima nuclear disaster, Japan had 54 nuclear power plants. To meet its 2030 target, it is necessary to restart about 27 nuclear reactors, but the number of nuclear reactors currently authorized for restart by the Nuclear Regulatory Agency is only 10. Acceleration of restart operations is inevitable and possible, if Japanese safety rules are followed. optimized to balance the ratio of safety and use – for example, by making regulations more functional rather than prescriptive.

The Ukrainian crisis was an opportunity for the United States and Europe to reaffirm the importance of nuclear energy. The Japanese government should further reconfirm the importance of nuclear energy in light of the S+3E energy security policies.

Masakazu Toyoda is Special Advisor at the Institute of Energy Economics, Japan.

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