On February 25th, Environment Minister Shinjiro Koizumi announced that the government (not just the Ministry of the Environment but the entire government) agreed to “review” the current policy of foreign assistance for coal-fired power plants. It should be noted that this is just an announcement of starting a “review” and thus it does not contain any changes to the existing policy yet, though the Minister mentioned its direction of “tightening” of the conditions for providing finance for coal-fired power plants.

News Articles

• The Asahi Shinbun: Under criticism, Japan to review aid for exports of coal-fired plants
• Reuters: Japan to tighten export policy on coal-fired power plants: minister

The current government’s position and conditions are expressed in the 5th Strategic Energy Plan as follows:

“In order to lead global decarburization taking into account the Paris Agreement, GOJ proposes to the partner country all options that contribute to CO2 emissions reduction, including renewable energy and hydrogen, etc., based on the needs of the partner country, to actively promote “low-carbon infrastructure exports.” In this process, in the case that there is a request from a partner country for Japan’s high efficiency coal thermal power generation then only for those countries that are forced to choose coal as an energy source from the perspectives of energy security and economic viability GOJ supports the introduction of power generation equipment that is in principle at or above ultra-supercritical pressure (USC), the global state-of-the-art, taking into account OECD rules and in a form that is consistent with the energy policy and climate change measures of the partner country.” (p. 24)

The four red parts are called “four conditions.”  The review is intended to revisit them.

The result of review and discussion will be reflected in the government’s Export Strategy for Infrastructure Systems, whose outline is expected to be adopted in June.

The Export Strategy is something that covers the entire fields of infrastructure systems and, in fact, coal-fired power plants are just a tiny part of it.  The Strategy has been revised every June since the first version adopted by the Management Council for Infrastructure Strategy under the Cabinet Secretariat in 2013.   Its goal is that Japanese companies should receive orders for infrastructure projects with a total value of approximately 30 trillion yen in 2020.  Hence this year is one milestone.

At this point, it is uncertain whether the review could actually result in any meaningful change of the Japanese government’s policy to promote coal-fired power plants overseas.

When the world is gearing up for implementing the Paris Agreement adopted at COP21, Japan started backsliding.

The Ministry of Environment announced that it would approve construction of coal-fired power plants on the condition that the power industry sets its voluntary action plan and reports the implementation of the plan, which is supposed to be consistent with Japanese INDC.

• Japan Times: Japan to get more coal-fired power plants thanks to Environment Ministry policy reversal

During the last few years, MoE played a role of stopping coal-fired power plants through the environmental impact assessment processes.  It wasn’t an ideal measure but it was the only available weapon for MoE.

However, in the face of mounting pressure from industry (which complains about the uncertainty related to coal-fired power plants) and Prime Minister office’s general support for coal-fired power plants, MoE seems to have shifted its position.

This is a quite worrying sign, because, according the survey conducted by some civil society organization such as Kiko Network, the number of planned coal-fired power plants is 47 (total capacity is 22.5 Gw), many of them are expected to come into operation around 2020.

This means lots of high carbon assets in Japan even during the last half of this century, which is totally inconsistent with what the Paris Agreement’s long-term goal hints for countries like Japan.

The government doesn’t seem to have gotten the memo.

Now the Japanese INDC is on UNFCCC’s website.

• 20150717_Japan’s INDC.pdf

Not much has changed since it was proposed for public commenting.  Hence the assessment below still stands.

• 26% reduction below 2013 by 2030 (1042 MtCO2eq).  **Here all years are Japanese fiscal year (April to March).
• For the base year, 2013 will be used mainly but 2005 will also be included.  For 2005 base year, the target becomes 25.4% below 2005 by 2030.
• The “GHGs” cover 6 Kyoto greenhouse gases and NF3.
• The target does include LULUCF (forest management, agricultural soil sinks etc).  It contribute to 2.6% reduction or 37 Mt-CO2eq reduction. They say they will take the same approach in Kyoto to account it, which means (in Japan’s case) gross-net approach.
• It is vague on whether it includes its bilateral offsetting scheme (“Joint Crediting Mechanism”) or not.  The INDC says JCM is not included as part of the basis for calculating the 26% reduction target but the government will “appropriately account” emission reduction acquired by Japan through the mechanism.  The INDC also states that accumulative 50-100 Mt-CO2eq is expected from JCM but it was clarified during the governmental committee meeting that the number is just an estimate, not a commitment.

• Electricity in 2030
  • RE: 22-24%
  • Nuclear: 20-22%
  • Coal: 26%
  • LNG: 27%
  • Oil: 3%
  • Of RE:
    • PV: 7%
    • Wind: 1.7%
    • Geothermal: 1.0-1.1%
    • Hydro: 8.8-9.2%
    • Biomass: 3.7-4.6%
• Primary Energy Supply including electricity, heat and fuels
  • RE: 13-14%
  • Nuclear: 10-11%
  • Natural gas: 18%
  • Coal: 25%
  • Oil: 30% + LPG 3%
• Energy consumption / Energy Efficiency
  • Electricity demand: 966.6TWh (2013) ==> 980.8TWh (2030)
    •  17% reduction from baseline scenario.
  • Finally Energy Consumption: 361 million kl Crude Oil Equivalent (2013) ==> 326 million kl COE (2030)
    • It is explained that this mean 35% improvement of efficiency between 2012 and 2030.
  • Primary Energy Supply will be 489 million kl COE.

• Low ambition in general:  The above target is equal to 18% reduction below 1990 by 2030, which is not enough.  CAN-Japan has been calling for 40-50% below 1990 by 2030.
• The base year disguise: the reason why 2013 was chosen as a base year is to make the target look better compared to EU and US.  It looks better than when it is compared with 2005 as a base year.
• Not consistent with its long-term target: Japan has a long-term target adopted by the Cabinet in 2012.  It aims at 80% reduction by 2050 (without specifying a base year). Assuming 2005 as a base year, the liner reduction from the current 2020 target (3.8% below 2005) to 2050 indicates that the target should be 29% reduction at the point of 2030.
• Low ambition in RE: renewable targets are extremely low, especially for wind and PV. They are even lower than what respective industry groups are aiming at.
• Uncontrolled coal: 26% in electricity generation in 2030 basically means Japan will keep the share of coal as it is now.
• Unrealistic nuclear: 20-22% nuclear actually means either extending operation period of nuclear power plants from the current 40 years to 60 years or building new ones.  If you assume only 40-year lifetime for nuclear power plants, many of the existing nuclear power plants will be phased out eventually and it should be less than 15% by 2030.
• Vague explanation for fairness and ambition:  the explanation around fairness and ambition is vague and it largely relies on high marginal abatement costs, transparency of sectoral breakdowns, efficiency of industry sectors.
• Too much focus on electricity: the discussion was centered around electricity mix too much and there was not much of discussion on heat/fuels.
• Other areas (adaptation and finance) are not addressed at all.

• 26% reduction below 2013 by 2030 (1042 MtCO2eq).  **Here all years are Japanese fiscal year (April to March).
• For the base year, 2013 will be used mainly but 2005 will also be included.  For 2005 base year, the target becomes 25.4% below 2005 by 2030.
• The “GHGs” cover 6 Kyoto greenhouse gases and NF3.
• The target does include LULUCF (forest management, agricultural soil sinks etc).  It contribute to 2.6% reduction or 37 Mt-CO2eq reduction.
• It is vague on whether it includes its bilateral offsetting scheme (“Joint Crediting Mechanism”) or not.  The proposal says JCM is not included as part of the basis for calculating the 26% reduction target but the government will “appropriately account” emission reduction acquired by Japan through the mechanism.  The proposal also states that accumulatively 50-100 Mt-CO2eq is expected from JCM but it was clarified during the committee meeting that the number is just an estimate, not a commitment.

• Electricity in 2030
• • RE: 22-24%
  • Nuclear: 20-22%
  • Coal: 26%
  • LNG: 27%
  • Oil: 3%
  • Of RE:
  • • PV: 7%
    • Wind: 1.7%
    • Geothermal: 1.0-1.1%
    • Hydro: 8.8-9.2%
    • Biomass: 3.7-4.6%
• Primary Energy Supply including electricity, heat and fuels
• • RE: 13-14%
  • Nuclear: 10-11%
  • Natural gas: 18%
  • Coal: 25%
  • Oil: 32%
• Energy consumption / Energy Efficiency
• • Electricity demand: 966.6TWh (2013) ==> 980.8TWh (2030)
  • • This reduction of electricity is 17% reduction from baseline
  • Finally Energy Consumption: 361 million Crude Oil Equivalent (2013) ==> 326 million COE (2030)
  • • It is explained that this mean 35% improvement of efficiency between 2012 and 2030.
  • Primary Energy Supply will be 489 million COE.

• Low ambition in general:  The above target is equal to18% reduction below 1990 by 2030, which is not enough.  CAN-Japan has been calling for 40-50% below 1990 by 2030.
• The base year disguise: the reason why 2013 was chosen as a base year is to make the target look better compared to EU and US.  It looks better than when it is compared with 2005 as a base year.
• Not consistent with its long-term target: Japan has a long-term target adopted by the Cabinet in 2012.  It aims at 80% reduction by 2050 (without specifying a base year). Assuming 2005 as a base year, the liner reduction from the current 2020 target (3.8% below 2005) to 2050 indicates that the target should be 29% reduction at the point of 2030.
• Low ambition in RE: renewable targets are extremely low, especially for wind and PV.
• Uncontrolled coal: 26% in electricity generation in 2030 basically means Japan will keep the share of coal as it is now.
• Unrealistic nuclear: 20-22% nuclear actually means either extending operation period of nuclear power plants from the current 40 years to 60 years or building new ones.  If you assume only 40-year lifetime for nuclear power plants, many of the existing nuclear power plants will be phased out automatically and it should be less than 15% by 2030.
• No explanation for fairness and ambition (yet):  the governmental officials said they would prepare explanation for “fair and ambitious” but it does not include any explanation so far.
• Too much focus on electricity: the discussion was centered around electricity mix too much and there was not much of discussion on heat/fuels.
• Other areas (adaptation and finance) are not addressed at all.

• Today’s proposal is not the final proposal but is the first draft.  There will be some more discussion until the proposal is officially adopted by the Cabinet.  However, MoE and METI seemed in agreement to push this INDC through and it is not likely to get changed hugely.

In the previous post, I talked about the three Options for Energy and the Environment presented by the Japanese government. From now on, I want to dig into a little bit deep into the content of the Options.

Although this is not exactly my favorite topic, let me first deal with the issue of nuclear because this is the dividing factor of the three Options and is currently at the center of people’s attention.

As I mentioned in the previous post, there are three scenarios for nuclear’s share in 2030.

• 0% by 2030
• 15% by 2030
• 20-25% by 2030

There are 54 nuclear reactors in Japan (of which, 4 are already to be scraped due to the Fukushima accident). And the current (2010, pre-Fukushima) share of nuclear in electricity is 26.4% (or 30.8% if you exclude cogeneration and onsite generation from the total).

So what do these scenarios tell you?

According to government’s own explanation, the 15% scenario is described as a scenario of gradual phase out of nuclear power plants. The “15%” is said to be a milestone in 2030 when each of nuclear power plants is phased out after 40-year lifetime (this “40-year lifetime” is a new policy that was adopted by the government).

But this is not exactly true. To make a long story short, the only “0% scenario” assumes actual reduction of nuclear power plants and both 15% and 20-25% factually assumes new construction.

There is an interesting slide prepared by the Agency for Natural Resources and Energy (ANRE) [in Japanese]. Below is a rough translation of the table in the slide. The table basically shows the background assumptions for certain % share of nuclear in 2030. For example, to get 13% share in 2030, you need to assume 40-year lifetime, no new additional construction and 70% of capacity utilization rate (load factor).  CUR stands for capacity utilization rate.

What you can see from this table is, if you want to get 15% share, you need to assume AT LEAST either:

1. 40-year lifetime, no new reactors, 80% capacity utilization rate,
2. 40-year lifetime, one new reactor, 80% capacity utilization rate, or
3. 40-year lifetime, two new reactors, 70% capacity utilization rate

However, these assumptions have three problems.

1) even in the case of “no new reactors,” it is assumed to restart the 6 remaining nuclear reactors in the area of Fukushima: Apart from the 4 completely damaged nuclear reactors, Fukushima Prefecture has 6 more nuclear reactors.  2 in the same site with the damaged 4 (Fukushima No.1) and 4 in a different power site (Fukushima No.2)).  You can see a map of the location in page 43 of this document. This is highly unlikely to be accepted by the people in Fukushima.

2) 70%-80% Utilization rates are not realistic: in the recent years, the average utilization rate of nuclear power plants in Japan has been around 65%. Increasing the rate means less time for regular inspection. This is again, highly unlikely to be accepted (nor desirable) in the post-Fukushima context.

3) There may be some overestimation: if you add up all the capacity of nuclear power plants in Japan and do calculations under the same assumptions, the figures for these cases would become a few % lower than the figures above.   For example, if you run the numbers for the first case, it will only produce 14%.

All of the three options assume the reduced numbers of nuclear reactors in Japan compared to the current level but 0% Scenario is the only one that goes in the direction of actual phaseout.