Japan's energy landscape
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Japan's energy landscape

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Japan's electricity companies earn about US$ 200 billion annually in revenues, and until the Fukushima nuclear accident about 30% of energy was generated by nuclear power plants, which are currently ...

Japan's electricity companies earn about US$ 200 billion annually in revenues, and until the Fukushima nuclear accident about 30% of energy was generated by nuclear power plants, which are currently almost all switched off. Japan's energy sector undergoes rapid change and presents large opportunities - subscribe to this report series, and you will periodically receive updates.

The report is a companion to our interview series on CNBC, NHK, BBC

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    Japan's energy landscape Japan's energy landscape Presentation Transcript

    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 19th Edition, July 23, 2013 by Gerhard Fasol, PhD, Eurotechnology Japan KK http://www.eurotechnology.com/ fasol@eurotechnology.com This is an outline/preview version - please purchase and download latest version of the full report here: http://www.eurotechnology.com/store/j_energy/ 1 JAPAN’S ENERGY LANDSCAPE
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S ELECTRICITY & ENERGY LANDSCAPE 2 Subscribe to this report, and we will regularly send you the latest versions. subscription, monthly payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU50334810626 subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU20789254886 Version Date Content added, updates 1 2 3 4 5 6 7 8 9 10 11 12 September 7, 2012 September 18, 2012 September 26, 2012 September 28, 2012 October 1, 2012 October 9, 2012 November 20, 2012 November 22, 2012 December 19, 2012 Gas companies section added December 23, 2012 revisions and additions January 2, 2013 electricity coverage expanded February 3, 2013 power industry liberalization
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S ELECTRICITY & ENERGY LANDSCAPE 3 Subscribe to this report, and we will regularly send you the latest versions. subscription, monthly payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU50334810626 subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU20789254886 Version Date Content added, updates 13 14 15 16 17 18 19 February 10, 2013 Ocean power added + updates March 15, 2013 primary energy imports updated March 18, 2013 energy generation data updated March 24, 2013 METI electr. monthly data added March 26, 2013 updates and corrections May 2, 2013 FY2012 financial data included July 23, 2013 LNG data updated, prices added
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 REPORTS ON JAPAN’S ENERGY SECTOR 4 •Japan’s energy landscape •approx. 277 pages, 94 Figures, 55 tables, frequent updates •information: •http://www.eurotechnology.com/store/j_energy/ •purchase current edition: •http://store.esellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU44952975839 •subscription, monthly payment, you can end the subscription any time (no refunds): •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU50334810626 •subscription, annual payment, you can end the subscription any time (no refunds): •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU20789254886 •Renewable energy in Japan •approx. 188 pages, 94 Figures, 32 tables, frequent updates •information: •http://www.eurotechnology.com/store/j_renewable/ •purchase current edition: •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU72243111298 •subscription, monthly payment, you can end the subscription any time (no refunds): •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU24934888016 •subscription, annual payment, you can end the subscription any time (no refunds): •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU30316666940 •Solid state lighting, GaN LEDs and lasers •approx. 122 pages, 25 Figures, 21 photographs, 9 tables, frequent updates •information: http://www.eurotechnology.com/store/solidstatelighting/ •purchase current edition (single copy license): http://store.esellerate.net/s.asp?s=STR651896906&Cmd=BUY&SKURefnum=SKU6322569155 •purchase current edition (corporate license): http://store.esellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU05361071140
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 LICENSE Thank you for purchasing licenses to our reports, and for your cooperation with our licensing conditions. Only through your purchases can we continue to produce high-quality market reports from Japan INTHE CASE OF SINGLE LICENSE: If you have purchased a single copy license of this report, you are not permitted to copy this report except for a single back-up copy INTHE CASE OF CORPORATE LICENSE: in the case that your company has purchased a corporate license, you may distribute this report inside your company including protected corporate information servers locked to the outside, but you cannot distribute this report outside your company ANNUAL SUBSCRIPTION: we offer annual subscriptions for a particular report, and also for all our reports in one single transaction at a great discount - please contact us for details. Corporations subscribing will receive all updates at the time of publication, so that you can be sure to have the latest up-to-date information This research report comes without any warranty of any kind.The authors and Eurotechnology Japan K. K. do not warrant that the information in this report is without error, nor that the information serves any particular purpose. For legal advice please consult properly licensed legal professionals, for investment advice please consult properly licensed financial advisors.Trademarks mentioned are the property of their owners. Eurotechnology is a trademark or registered trademark in Japan and other countries. 5
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 AGENDA - LIST OF CONTENTS 7 •Executive summary: Japan’s electrical energy landscape •The “innovative energy and environmental strategy” of Sept 14, 2012 •implementing a nuclear free society “one day earlier than possible” •implementing the green energy revolution •guaranteeing a stable energy supply •carrying out the electrical power system reform •realization of global warming counter measures •Cabinet decision of Sept 19, 2012 •Japan’s primary energy supply and self-sufficiency, •Primary energy statistics •Japan’s oil, coal gas imports •Electricity generation: generation capacity, electricity generated, and effect of the Fukushima disaster •Japan’s present electrical architecture •The legal framework for Japan’s energy architecture •The reasons for the Fukushima nuclear disaster and the independent Parliamentary commission •new nuclear safety framework •The 10 regional electrical operators and J-Power •Generation capacity by type (water, fossil, nuclear etc) •combined industry financials •description and financials for each of the 10 regional electric operators •J-Power •The grid •The 50Hz/60Hz issue •JEPX - Japan Electrical Power ExchangeTokyo •Impact of the Fukushima disaster •Prospects for electrical industry reform •Asian grid proposals •Japan’s gas companies •Renewable energy •see separate report: http://www.eurotechnology.com/store/j_renewable/ •Glossary •Summary
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S NATIONAL ENERGY STRATEGY PLAN: “INNOVATIVE ENERGY AND ENVIRONMENTAL STRATEGY” OF SEPTEMBER 14, 2012 (CABINET OFFICE) 8
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 20139 1.Realizing a nuclear free society “one day earlier than possible 1.1.three principles 1.2.five policies 2.Implementing the green energy revolution 2.1.Reduce electricity and energy consumption 2.2.Large scale introduction of renewable energy 3.Guaranteeing a stable energy supply 4.Electrical power system reform 5.Realization of global warming counter measures 6.Adjusted by Cabinet Decision (“Kakugikettei of Sept 19, 2012) JAPAN’S NATIONAL ENERGY STRATEGY PLAN - OUTLINE
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 201310 This section describes the nuclear energy part of a roadmap which over the next 30-40 years might realize a nuclear free society - unless modifications occur during this time. 1.1 The roadmap aims to follow three principles: 1.strictly limit the operation of nuclear power plants to 40 years age. 2.restart those nuclear power plants, where the safety has been assured by the (newly formed) Nuclear Safety Commission 3.no new construction or expansion of nuclear power stations 1.1. REALIZING A NUCLEAR FREE SOCIETY “ONE DAY EARLIERTHAN POSSIBLE” -THREE PRINCIPLES
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 201311 1.2.Five policies will be followed: 1.nuclear fuel cycle 2.maintenance and strengthening of human resources and technology 3.cooperation with the international community 4.strengthen location, regional measures 5.nuclear industry system and system for compensation of damages 1.2 REALIZING A NUCLEAR FREE SOCIETY “ONE DAY EARLIER THAN POSSIBLE” - FIVE POLICIES
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 CABINET DECISION (“KAKUGIKETTEI”) OF SEPT. 19, 2012 28
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 201329 Sept. 19, the Cabinet released a "Kakugikettei" (Cabinet Decision) which is 4 and 1/2 lines long, which says:   We will carry out our energy and environmental policy based on the "Innovative Energy and Environmental Strategy" as decided by the Energy and Environment Council on Sept 14, however we will hold responsible discussions with concerned self-governing regional bodies of Japan and with concerned international organizations, and we will continuously and flexibly verify and adjust our policy. (Kakugikettei, Cabinet decision of Sept 19, 2012, our unofficial translation from bureaucratic official complex Japanese into simplified English, attempting to keep the same meaning).   Note, that this "step back" is not uniquely Japanese.... Sweden decided in the 1980s to go zero-nuclear with a Parliament approved schedule, and Sweden's parliament reversed the earlier zero-nuclear decision, and went back to continue nuclear power in 2010 and renewing or building new nuclear power stations. CABINET DECISION (“KAKUGIKETTEI”) OF SEPT. 19, 2012
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 PRIMARY ENERGY SUPPLY AND SELF-SUFFICIENCY 30
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 PRIMARY ENERGY SELF-SUFFICIENCY RATIOS 31 Japan has one of the lowest primary energy self-sufficiency ratios globally: •Japan has to import about 82% of primary energy, if nuclear energy is included. •however, at present with two exceptions, all nuclear power stations out of service, so that 96% of Japan’s primary energy needs to be imported. Countries with self-sufficiency ratios larger than 100% export primary energy including electricity, while countries with self-sufficiency ratios lower than 100% need to import primary energy and electricity Italy Japan S Korea Germany France US India UK China Canada Russia 0 20 40 60 80 100 120 140 160 180 200Energyselfsufficiencyratio Energy self sufficiency ratio IEA, OECD, 2006 2007 15 15 18 4 19 2 41 30 51 8 71 62 76 75 83 76 92 91 153 144 183 incl. nuclear 177 excl. nuclear c2012EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S PRIMARY ENERGY IMPORTS 33
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S LNG AND LPG IMPORT - QUANTITY 36 The energy supply from nuclear power, has been mainly replaced by LNG (liquid natural gas). This figures shows the quantity of imported LNG and LPG gas in metric tons. The mass of imported gas increased from an average of around 6.5 million tons/month to an average of more than 8 million tons/ month after the Fukushima disaster on March 11, 2011, ie an increase of approx. 23%. Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 0 1000000 2000000 3000000 4000000 5000000 6000000 7000000 8000000 9000000 10000000 importsmetrictonsmonth LPG, LNG imports metric tons month LPG LNG Lehman shock March 11 2011 source Ministry of Finance of Japan c2013EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S LNG AND LPG PRICES 39 Natural gas prices vary widely between the point of purchase/sale, the timing, and the type of delivery (pipeline, liquid natural gas via tanker by sea etc). This figure shows the prices Japan pays on average for LNG and LPG gas delivered to Japan, the data are obtained from the Japanese Ministry of Finance. The figure shows, that current (May 2013) are higher than at the peak just before the Lehman bankruptcy. 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
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S LNG PRICES 41 Most Japanese LNG prices are traditionally fixed to the price of crude oil.Thus the price for 1 Million BTU of LNG gas for Japan is currently on the order of US$ 17, while for certain types of LNG the US internal price is on the order of US$ 2, ie Japanese power companies pay up to 8 times more for LNG than US power companies. There is much effort on the Japanese side to reduce the costs of procuring LNG. Recently Osaka Gas and Chubu Electric Power have entered into longterm procurement contracts where the LNG price is determined according to the “Henry hub” price for LNG. (The “Henry hub” http://en.wikipedia.org/wiki/Henry_hub is a distribution hub on the US natural gas pipeline system, and is used for the pricing of natural gas futures on the NewYork Mercantile Exchange and on the IntercontinentalExchange ICE).
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 ELECTRICITY GENERATION 43
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 PHASING OUT NUCLEAR POWER AFTERTHE FUKUSHIMA DISASTER 48 Japan’s nuclear power stations are switched off routinely every 13 months for maintenance.After the Fukushima nuclear disaster it became politically very difficult, if not impossible to return reactors into service after completion of the routine maintenance.As a consequence, 13 months after March 11, 2011, all Japanese nuclear reactors were out of service. Only two reactors have been switched on again.This figure only shows nuclear power generated by reactors owned by the 10 regional electricity operators. Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 0 10 20 30 powerpermonthTeraWatthmonth Japan's nuclear power generation per month TeraWatt h March 11, 2011 disaster c2013EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 RESTARTING JAPAN’S NUCLEAR POWER STATIONS 49 According to the Chairman of Japan’s new Nuclear Regulation Authority (Chairman ShunichiTanaka in an interview withYomiuri Shinbun on September 24, 2012), the preparation of new nuclear safety guidelines required by the new nuclear safety law, will take until summer 2013, so that it is extremely unlikely that nuclear power stations will be restarted in addition than the 2 reactors at Oi which have been restarted a few weeks ago.
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S PRESENT ELECTRICAL ARCHITECTURE 52
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE LEGAL FRAMEWORK OF JAPAN’S ENERGY ARCHITECTURE 55
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 NEW FRAMEWORK FOR NUCLEAR SAFETY AFTERTHE FUKUSHIMA DISASTER 60
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 NUCLEAR DISASTER INVESTIGATION INDEPENDENT PARLIAMENTARY COMMISSION: THE FUKUSHIMA NUCLEAR DISASTER WAS CAUSED BY REGULATORY CAPTURE 61 The Fukushima nuclear disaster has been investigated by several commissions, including: •an internal commission withinTokyo Electric Power Corporation (TEPCO), the owner and operator of the Fukushima nuclear power station. •This commission was not independent ofTEPCO, but it can be assumed that this commission needed to followTEPCO’s interests. •an independent commission incorporated by the Japanese Parliament. •The Chairman of this commission was Professor Kiyoshi Kurokawa, a highly respected medical doctor, formerly Professor ofTokyo University, then Chairman of the Faculty of Medicine ofTokai, and then President of the Science Council of Japan. •Commissioners: •KoichiTanaka, Nobel Prize Winner, Chemist at Shimadzu Corporation •Katsuhiko Ishibashi, Seismologist •Kenzo Oshima, Former Ambassador of Japan to the United Nations •Hisako Sakiyama, Medical Doctor, Former Chief of the National Institute of Radiological Sciences •Masafumi Sakurai, Lawyer, former Chief Prosecutor of the Nagoya High Public Prosecutors Office, and former Inspector General for Legal Compliance, Inspector General’s Office, Defense Ministry •MitsuhikoTanaka, Science Journalist •Shuya Nomura, Lawyer, Professor, Chuo Law School, Chuo University •Reiko Hachisuka, Chair, Society of Commerce and Industry, OkumaTown, Fukushima Prefecture •YoshinoriYokoyama, Social System Designer, Director, University ofTokyo, Executive Management Program •The primary results of this independent commission was that the Fukushima nuclear accident was caused by Regulatory Capture. A well known phenomenon, which occurs when the industry regulated by this industry’s regulator, gains control (“captures”) of the regulator. •The theory of regulatory capture is due to George Stigler, Nobel Prize winner in Economics. For more on Regulatory Capture see: http://en.wikipedia.org/wiki/Regulatory_capture
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 NEW NUCLEAR SAFETY AUTHORITY 62 The independent Parliamentary Commission determined that the Fukushima nuclear accident was caused by Regulatory Capture, ie by the capture of the previous Nuclear and Industrial Safety Agency by the Japanese nuclear industry.The Nuclear and Industrial Safety Agency was part of the Ministry of Economy,Trade and Industry (METI), which was promoting the development of Japan’s nuclear industry. Therefore it was necessary to establish an independent new regulator for Japan’s nuclear industry. The new independent nuclear safety regulator is the “Nuclear Regulation Authority” (NRA) and was incorporated on September 19, 2012. The Nuclear Regulation Authority (NRA) is part of the Environment Ministry, and its independence is guaranteed under Article 3 of the National Government Organization Law. Chairman is ShunichiTanaka, formerVice-Chairman of the Cabinet Office’s Atomic Energy Commission. According to the Chairman of Japan’s new Nuclear Regulation Authority (Chairman ShunichiTanaka in an interview withYomiuri Shinbun on September 24, 2012), the preparation of new nuclear safety guidelines required by the new nuclear safety law, will take until summer 2013, so that it is extremely unlikely that nuclear power stations will be restarted in addition than the 2 reactors at Oi which have been restarted a few weeks ago. According to NRA Chairman ShunichiTanaka, the role of NRA is exclusively the creation and execution of new nuclear safety standards, and response guidelines in the event of another disaster. Chairman ShunichiTanaka, in an interview on September 24, 2012 withYomiuri Shinbun stated that NRA will exclusively focus on objective safety screening and: •will NOT consider issues such as future electricity supply and demand •will NOT consider financial difficulties of electricity operators from switching of nuclear reactors •will NOT take account of the “stress tests” imposed by the Government on electricity operators after the Fukushima nuclear disaster, but will assess safety independently •will NOT make efforts to obtain public’s acceptance of restarting nuclear power
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 HISTORY 63
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE 10 REGIONAL ELECTRICITY COMPANIES 68
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 NEW ENERGY CONTRIBUTIONTOTHE POWER MIX 74 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
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE 10 REGIONAL ELECTRICAL POWER COMPANIES 76 Annual operating income of Japan’s 10 regional electricity operators.The large negative effect of the Fukushima disaster and the switch- off of nuclear power stations is clearly visible, and produced annual operating losses on the order of US$ 10 billion since FY 2011 (ending March 31, 2012). 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2000 1500 1000 500 0 500 1000 1500 2000 2500 3000 operatingincomeYENbillion Japan's regional electricity operators annual operating income US$ 20 billion US$ 10 billion US$ 10 billion US$ 20 billion US$ 30 billion OKIDEN KYUDEN YONDEN CHUGOKU KANDEN RIKUDEN CHUDEN TEPCO TOHOKU HEPCO c2013EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 HOKUDEN HOKKAIDO ELECTRICAL POWER COMPANY 82
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 TOHOKU ELECTRICAL POWER COMPANY 86
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 TOKYO ELECTRICAL POWER COMPANY -TEPCO 90
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 CHUBU ELECTRICAL POWER COMPANY - CHUDEN 94
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 HOKURIKU ELECTRICAL POWER COMPANY - RIKUDEN 98
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 KANSAI ELECTRICAL POWER COMPANY - KANDEN 102
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 CHUGOKU ELECTRICAL POWER COMPANY 106
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 SHIKOKU ELECTRICAL POWER COMPANY -YONDEN 110
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 KYUSHU ELECTRICAL POWER COMPANY - KYUDEN 114
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 OKINAWA ELECTRICAL POWER COMPANY - OKIDEN 118
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 J-POWER (ELECTRIC POWER DEVELOPMENT CORPORATION EDPC) 122
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 J-POWER REVENUES 128 1998 2000 2002 2004 2006 2008 2010 2012 2014 0 100 200 300 400 500 600 700 800 900 1000 annualrevenueYENBillion US$ 5 Bill. US$ 10 Bill. Annual revenues of JPOWER c2013EurotechnologyJapanKK www.eurotechnology.com 1998 2000 2002 2004 2006 2008 2010 2012 2014 0 10 20 30 40 50 60 70 80 90 100 annualoperatingnet incomeYENBillion 0 US$ 0.5 Bill. US$ 1 Bill. Annual op. and net income JPOWER c2013EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 J-POWER MARGINS 129 1998 2000 2002 2004 2006 2008 2010 2012 2014 0 5 10 15 20 annualoperatingandnetmargin Annual operating and net margin JPOWER c2013EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN ATOMIC POWER COMPANY (JAPC) 132
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE GRID 135
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE 50HZ/60HZ ISSUE 138
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE 50HZ/60HZ ISSUE 140 Only three frequency converter facilities (FCF) connect the western 60Hz area with the easter 50Hz area: •Shin-Shinano FCF (600MWatt) •Sakuma Dam FCF (300MWatt) •Higashi Shimizu FCF (135MWatt, from Autumn 2014: 300MWatt) 50Hz (historically German AEG supplied Tokyo Electric Light Co) 60Hz (historically US General Electric supplied Osaka Electric Lamp Co.) Shin-Shinano FCF 600MW Sakuma Dam FCF 300MW Higashi-Shimizu FCF (=Frequency Converter Facility) 135MW (from Autumn 2014: 300MW) (c) 2012 Eurotechnology Japan KK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JEPX JAPAN ELECTRIC POWER EXCHANGETOKYO 141
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 IMPACT OFTHE FUKUSHIMA DISASTER 144
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 ELECTRICAL POWER INDUSTRY REFORM AND LIBERALIZATION 150
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 ASIAN GRID PROPOSALS 154
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S CITY GAS LANDSCAPE 159
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S REGIONAL GAS COMPANIES - OVERVIEW 161
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S REGIONAL GAS COMPANIES -THE BIG 4 170
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 JAPAN’S BIG-4 GAS COMPANIES (ANNUAL OPERATING INCOME) 177 Operating incomes of Japan’s gas companies are relatively stable 1998 2000 2002 2004 2006 2008 2010 2012 2014 0 20 40 60 80 100 120 140 160 180 200 annualoperatingincomeYENBillion 0 US$ .5 Bill. US$ 1.0 Bill. US$ 1.5 Bill. US$ 2.0 Bill. Annual operating income of Japan's Big 4 Gas companies Tokyo Gas Toho Gas Osaka Gas Saibu Gas c2013EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 COMPARING JAPAN’S 10 ELECTRICITY OPERATORS WITH JAPAN’S BIG-4 GAS COMPANIES 180
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 TOKYO GAS 187
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 TOHO GAS 191
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 OSAKA GAS 195
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 SAIBU GAS 199
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE ROLE OF JAPAN’S TRADING COMPANIES INTHE ENERGY DOMAIN 203
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 THE ROLE OF JAPAN’STRADING COMPANIES INTHE ENERGY SECTOR 204 This section will be included and updated in future versions of this report. Subscribe to this report, and we will regularly send you the latest versions. subscription, monthly payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU50334810626 subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU20789254886
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 RENEWABLE ENERGY 205
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 FEED INTARIFFS (FIT) FOR RENEWABLE ENERGY 206
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 RENEWABLE ENERGY 207 Japan’s renewable energy industry landscape and markets are documented in our following report: •Renewable energy in Japan •approx. 188 pages, 94 Figures, 32 tables, frequent updates •information: •http://www.eurotechnology.com/store/j_renewable/ •purchase current edition: •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU72243111298 •subscription, monthly payment, you can end the subscription any time (no refunds): •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU24934888016 •subscription, annual payment, you can end the subscription any time (no refunds): •http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU30316666940 see also: •Solid state lighting, GaN LEDs and lasers •approx. 122 pages, 25 Figures, 21 photographs, 9 tables, frequent updates •information: http://www.eurotechnology.com/store/solidstatelighting/ •purchase current edition (single copy license): http://store.esellerate.net/s.asp?s=STR651896906&Cmd=BUY&SKURefnum=SKU6322569155 •purchase current edition (corporate license): http://store.esellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU05361071140
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 GLOSSARY 208
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 GLOSSARY 209 Mega-solar 1 Joule 1 Watt 1 GW = 1 Giga-Watt Solar plants larger than 1 MegaWatt capacity, corresponding to the electricity needs of about 300 family homes SI-Unit for Energy. 3,600,000 Joule = 1 kilo Watt hour (= 1 kWh) 1 Joule = 2.778 x 10-7 kWh SI-Unit for Power. Measures energy transfer or energy conversion. 1 Watt = 1 Joule / second 1 GW = 1 Billion Watt = 109 Watt The power generation capacity of a nuclear power station is typically on the order of 1 GW
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 SUMMARY 210
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 SUMMARY: JAPAN’S ELECTRICAL ENERGY LANDSCAPE 211 Japan’s electrical industry has been almost unchanged for many years, until the Fukushima nuclear disaster struck in March 2011.The nuclear energy contribution to Japan’s electrical energy mix was around 30% and increasing this nuclear energy contribution to 50% was official policy. New renewable sources were kept below 1% of the electricity energy mix. The Fukushima nuclear disaster led to a shut-down of almost all nuclear power stations (except two), and nuclear power has for the time being been replaced by much more expensive fossil sources (mainly gas), and restarting retired aged conventional power stations. Legislation came in force on July 1, 2012 to promote renewable energy sources via feed-in-tariffs, and Japan’s energy strategy plan is currently in intense political discussions. For the future, strong increases in renewable energy can be expected.The long-term fate of nuclear power has not yet been decided.
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 EUROTECHNOLOGY JAPAN KK 212
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 EUROTECHNOLOGY JAPAN KK FOUNDED: FEBRUARY 1997 INTOKYO 213 Services and products - focus areas are high-technology, telecommunications, software, middle-ware, environmental technology and medical equipment: - Market entry to Japan for European and US high-tech companies, turn-round, reshaping, planning and building of distribution networks - European business development and strategy for Japanese companies - M&A (European and US companies acquiring Japanese companies, Japanese companies acquiring or investing in Europe) - Turn-round preparations and management of foreign business in Japan - Market research and strategy - Due diligence of high-tech companies, environmental due-diligence - Advisory services for investment fund managers and investors in technology fields - we publish a series of market reports for about 10 years, which are purchased world-wide, distributed direct and via distribution partners: http://www.eurotechnology.com/store/
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 EUROTECHNOLOGY JAPAN KK 214 - Leading high-technology business development boutique inTokyo, working globally - Founded in 1996/1997 - 14 years experience, relationships, cooperations and success record. - CEO works with Japan’s high-tech / telecom sector since 1984 - 27 years experience, resources, cooperations. - Wide network of cooperations in Governments, Embassies, trading companies, distributors, finance,VCs, traditional corporations, venture start-ups, industry associations - Experience: market-entry, restructuring, M&A, acquisitions, due-diligence Customers include: - More than 100 investment fund managers - Industrial customers: - NTT-Communications, SIEMENS, DeutscheTelekom, Cubic, Unaxis (now: Oerlikon), CITI Group, CLSA Asian Markets, Genscape, Google, IKEA, Isabellenhuette, Landis+Gyr, National Instruments, Swisscom,TechnoCom, - Government - NewYork Police Department, European Union,TEKES (Technology Research funding organization of the Government of Finland) Deep Japanese technology market knowledge - we publish a series of market reports for about 10 years, which are purchased world-wide.You can purchase our reports on Bloomberg: https:// www.bmart.com/search?&nuts%5B%5D=WIRE%3AEUT, and via eSellerate: http://store.eSellerate.net/ s.aspx?s=STR0576176470 and from http://www.eurotechnology.com/store/
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 GERHARD FASOL PROFILE: HTTP://WWW.FASOL.COM/PROFILE/ 215 - Worked successfully with Japan’s high-tech sector since 1984 - 27 years. Came first to Japan in 1984 to help build NTT’s first international R&D cooperation on semiconductor lasers - Entrepreneur inTokyo since 1996, Eurotechnology Japan KK worked with many large corporate groups (e.g. SIEMENS, NTT, DeutscheTelekom,Asahi Glass...), more than 100 investment fund managers - Assoc. Professor of Electrical Engineering atTokyo University. Record of Fasol-Laboratory atTokyo University: http://www.fasol.com/tokyo_university/ - Elite “Sakigake” (Pioneer) R&D project on Spin-Electronics of Japanese Government Science and Technology Agency.This work was evaluated by US National Science Foundation and US Department ofTrade: http://www.wtec.org/loyola/erato/ch7_5.htm - Co-initiator of spin-electronics device research in Japan, one of the first to start work on spin- electronics in Japan in 1991 - Tenured Faculty member at Cavendish Laboratory/University of Cambridge. - Assoc. Professor of Electrical Engineering atTokyo University - PhD in Solid-State Physics (Cambridge University,Trinity College, UK) - Diplom-Physiker, Ruhr-University Bochum (Diplom-Thesis on Superconductivity) - Publication list (Books, patents and publications, several publications are specifially concerning electron-spin and spin-electronics): http://www.fasol.com/profile/publications.shtml - Languages: English, German (native), French, Japanese, and some Swedish
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 GERHARD FASOL WITHTETSUZO MATSUMOTO, EXECVP OF SOFTBANK MOBILE CORPORATION 216
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 217 see: http://accjjournal.com/the-galapagos-effect/
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 218 see: http://accjjournal.com/the-galapagos-effect/
    • (c) 2013 Eurotechnology Japan KK www.eurotechnology.com Japan’s energy landscape (19th edition) July 23, 2013 CONTACT AND MORE INFORMATION 219 Contact •Gerhard Fasol PhD •Eurotechnology Japan KK,Tokyo, Japan •http://www.eurotechnology.com/ •Mobile +81-90-8594-6291 •fasol@eurotechnology.com •gfasol@gmail.com More information: •reports:http://www.eurotechnology.com/store/ •twitter: http://twitter.com/gfasol/ •website: http://www.eurotechnology.com/ •personal site: http://fasol.com