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(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
JAPAN’S ELECTRICITY AND
NEW ENERGY POLICY
Gerhard Fasol ...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
NATURE GOVERNS ENERGY
•I have energy in my DNA: Ludwig B...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
CAUSE OF FUKUSHIMA NUCLEAR ACCIDENT
•Regulatory capture ...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
HISTORY OF JAPAN’S ELECTRICAL POWER INDUSTRY
Year action...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
NEW ENERGY CONTRIBUTIONTOTHE POWER MIX, PRE-2011
Before ...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
WHY DOES JAPAN PAY SO MUCH FOR LNG?
Japan pays more than...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
WHY DOES JAPAN PAY SO MUCH FOR LNG?
Japan pays far more ...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
WHERE DO WE GO FORWARD?
•Grid developments
•Liberalizati...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
MORE INFORMATION
•The Economist interview onYouTube:
•ht...
(c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014
CONTACT AND MORE INFORMATION
Gerhard Fasol
• contact: ht...
Japan's electricity and new energy policy
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Japan's electricity and new energy policy

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handouts for a lecture for the Stockholm School of Economics at the Embassy of Sweden in Tokyo, describing today's status of Japan's energy and electricity markets, how we arrived at today's situation, and how Japan's electricity markets are likely to develop as a consequence of electricity market deregulation.

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Transcript of "Japan's electricity and new energy policy"

  1. 1. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 JAPAN’S ELECTRICITY AND NEW ENERGY POLICY Gerhard Fasol PhD contact: http://www.eurotechnology.com/connect/ Embassy of Sweden,Tokyo June 18, 2014 Stockholm School of Economics, EIJS
  2. 2. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 JAPAN’S ENERGY - MYTHSVS REALITY •Nature governs energy - nature cannot be fooled •Where are we and why? •Japan’s energy structure frozen since 1952- March 11, 2011 •Primary energy: 96% imported, does not need to be •Myth vs Reality, Mantra vs Smart •Psychology of judgment and decision making •“Regulatory capture” •Why Japan pays so much for LNG vs shale gas •Where do we go forward? •Grid developments •Liberalization, democratization, localization •Renewable energy •Energy plan of Feb. 11, 2014
  3. 3. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 NATURE GOVERNS ENERGY •I have energy in my DNA: Ludwig Boltzmann created much of the laws and tools to work with energy •http://www.eurotechnology.com/events/ludwig-boltzmann- symposia/ •“For a successful technology, reality must take precedence over public relations, for nature cannot be fooled” (Richard Feynman) •Fukushima was caused by “regulatory capture”: •Parliamentary committee chaired by Kiyoshi Kurokawa •“Groupthink can kill”: http://www.eurotechnology.com/ 2014/03/09/kiyoshi-kurokawa-groupthink-can-kill/ •http://www.shugiintv.go.jp/jp/index.php? ex=VL&deli_id=41488&media_type=
  4. 4. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 CAUSE OF FUKUSHIMA NUCLEAR ACCIDENT •Regulatory capture caused the Fukushima accident •result of Parliamentary commission (Chair: Kiyoshi Kurokawa) •not a Japanese phenomenon •theory of regulatory capture: George Stigler (Nobel Prize 1982) “EconomicTheory of Regulation” •Psychology of judgment and decision making •Daniel Kahneman (2002 Nobel Prize in Economic Science) •eminent US philosopher about Daniel Kahneman:“I am not interested in the psychology of stupidity”
  5. 5. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 HISTORY OF JAPAN’S ELECTRICAL POWER INDUSTRY Year action February 15, 1883 Tokyo Dentou KK receives Government license, starts business in July 5,1886 1893 Tokyo Dentou KK introduces 50Hz equipment from AEG (of Germany) Osaka Dentou KK introduces 60Hz equipment from GE (of USA) 1896 33 electricity utility companies 700 electricity utility companies 1938-1939 Japan’s electricity industry nationalized March 1942 Nihon Hassouden KK (Nippatsu) created (generation + transmission) 9 distribution companies May 1, 1951 US occupation government orders dissolution of Nihon Hassouden KK (Nippatsu), 9 regional electricity monopolies created,1972 + Okinawa Power Co March 1, 1961 construction of first Japanese nuclear power plant (Tokai Nuclear Power Plant, UK Magnox type) starts (power generation starts 1966, decommissioned in 1998) Source: Eurotechnology-Japan Report “Japan’s Energy Sector” http://www.eurotechnology.com/store/j_energy/
  6. 6. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 NEW ENERGY CONTRIBUTIONTOTHE POWER MIX, PRE-2011 Before March 11, 2011, Japan’s regional power monopolies had an unwritten rule to keep “new energy” (ie. renewable energies such as wind, solar, geo-thermal, wave power, bio-mass, but excepting water power) below 1% of the power mix. Water power was excepted, and Japan’s water power contribution is on the order of 10% overall. Hokkaido Tohoku Tepco Chubu Hokuriku Kansai Chugoku Shikoku Kyushu Okinawa J Power 0 0.2 0.4 0.6 0.8 1. 1.2 1.4 newenergygenerationcapacity new energy generation capacity before March 11, 2011 0.7 1.3 0.05 0.1 0.9 0.03 0.02 0.03 1.1 0 0.09 c2012EurotechnologyJapanKK www.eurotechnology.com Source: Eurotechnology-Japan Report “Renewable Energy in Japan” http://www.eurotechnology.com/store/j_renewable/
  7. 7. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 WHY DOES JAPAN PAY SO MUCH FOR LNG? Japan pays more than 5% of GDP for energy imports Graphics/analysis source: http://www.eurotechnology.com/store/j_energy/ 1990 2000 2010 5000 10000 15000 20000 25000 30000 importsYENBillionyear Oil, coal, LPG, LNG imports YEN Billion FY Oil Coal LPG LNG Lehman shock US$ 100 Billion 2.2 of GDP US$ 200 Billion 4.4 of GDP US$ 300 Billion 6.7 of GDP FY April March source Ministry of Finance of Japan c2013EurotechnologyJapanKK www.eurotechnology.com Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 0 500 1000 1500 2000 2500 3000 3500 importsYENBillionmonth Oil, coal, LPG, LNG imports YEN Billion month Oil Coal LPG LNG Lehman shock March 11 2011 US$ 10 Billion US$ 20 Billion US$ 30 Billion Jan 2011 Jan 2013: 34.0 increase source Ministry of Finance of Japan c2013EurotechnologyJapanKK www.eurotechnology.com
  8. 8. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 WHY DOES JAPAN PAY SO MUCH FOR LNG? Japan pays far more for LNG per unit than US costs or EU - why? • not one single reason: • liquifaction + transport • political reasons • timing • negotiation know-how • competition reasons • project management • etc Graphics/analysis source: http://www.eurotechnology.com/store/j_energy/ 2008 2010 2012 2014 2016 0 50000 100000 150000 JapanpriceYENmetricton US$ 500 metric ton US$ 1000 metric ton LNG LPG Price for LNG and LPG in Japan YEN metric ton Source: Japanese Ministry of Finance Lehman bankruptcy Sept 15, 2008 March 11 2011 c2013EurotechnologyJapanKK www.eurotechnology.com 2008 2010 2012 2014 0 5 10 15 20 25 NaturalGaspricesUS$MillionBTU 3.4 cent kWh 6.8 cent kWh March 11, 2011 Japan LNG USA LNG Export USA pipeline Import EU Natural Gas prices US$ Million BTU c2012EurotechnologyJapanKK www.eurotechnology.com
  9. 9. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 WHERE DO WE GO FORWARD? •Grid developments •Liberalization, democratization, localization •Renewable energy •Energy plan of Feb. 11, 2014
  10. 10. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 MORE INFORMATION •The Economist interview onYouTube: •http://youtu.be/yHjy4Wnlstc •Japan’s energy landscape •http://www.eurotechnology.com/store/j_energy/ •Renewable energy in Japan •http://www.eurotechnology.com/store/j_renewable/ Some articles: •The Economist,April 8, 2013,“Life without nukes”, http://www.economist.com/blogs/babbage/2013/04/energy •IEEE Spectrum, May 6, 2013,“Japan’s utilities suffer staggering losses”, http://spectrum.ieee.org/energywise/energy/nuclear/japans- utilities-suffer-staggering-losses
  11. 11. (c) www.eurotechnology.com fasol@eurotechnology.com June 18, 2014 CONTACT AND MORE INFORMATION Gerhard Fasol • contact: http://www.eurotechnology.com/connect/ • Eurotechnology Japan KK, Founder and CEO • http://www.eurotechnology.com/ • GMO Cloud KK, external/independent Member of the Board of Directors • http://ir.gmocloud.com/company/profile/ • Ludwig Boltzmann Forum, Creator and Curator • http://www.boltzmann.com/events/symposia/ More information: •http://www.eurotechnology.com/store/j_energy/ •http://www.eurotechnology.com/store/j_renewable/ •http://www.eurotechnology.com/japan-energy/

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