Energy Policy in the Post-3/11 World

Long-Term Electricity Demand and Energy Integration in Japan

Science Technology

Japan now confronts the question of what position to take on nuclear power and how to meet its current and future energy needs. Ogimoto Kazuhiko—a professor at the University of Tokyo’s Collaborative Research Center for Energy Engineering—examines energy scenarios premised on whether nuclear power is phased out and calculates the likely costs and CO2 emissions under each scenario.

The Impact of March 11 on Energy Systems

The areas hardest hit on March 11, 2011, by the Great East Japan Earthquake and the ensuing tsunami suffered considerable damage over a range of sectors, including not only the loss of property and human life but also the destruction of roads, railways, ports, and power stations. And delays in getting this vital infrastructure back on track have been a major obstacle to recovery in the disaster areas (Figure 1). Throughout Tōhoku and in northern Kantō, even outside the immediate disaster areas, overall socio-economic activity grew sluggish as a result of insufficient supplies of food and other goods and due to other constraints. This included the negative impact arising from the unstable electricity supply and the social unease caused by the spread of harmful rumors and hoarding. Another major impact that the disaster had on Japan—and on the entire world—stemmed from the breakdown of the supply chains linking companies, particularly in the semiconductor industry.

The Great East Japan Earthquake differs from the Hanshin-Awaji Earthquake, which hit the city of Kobe in 1995, because the earlier disaster had been limited to a single area within Japan. The comparatively narrower scope of impact meant that the supply of energy to Kobe and its environs could be restored in a short period of time using supplies from surrounding areas, which paved the way for the full restoration of infrastructure over the medium term. In contrast, the massive earthquake and tsunami that struck on March 11 damaged an extensive area. The disaster impacted the energy supply structure by knocking out oil refineries, power plants, gas facilities, and electricity grids over a stretch of hundreds of kilometers along the Pacific coast of northeast Japan, and the destruction from the tremors and tsunami also dealt a heavy blow to the demand side of the equation. The extensive range of the impact has meant that the recovery and rebuilding effort requires enormous logistical efforts, in terms of the time required and the area involved.

In order to avert large-scale power outages after the March 11 disaster, Tokyo Electric Power Co. (TEPCO) carried out planned, rolling blackouts in its supply zone to curtail the demand of electricity through systematic operations at its power substations. In carrying out the hastily prepared blackouts it was difficult to make exceptions for traffic lights, public transport, hospitals, and the like; the result was a major impact on the overall economy and society, causing all sorts of anxiety for people and businesses.

Tasks that Lie Ahead

In the electricity, gas, and fuel sectors, there is no shortage of things that need to be done to restore the demand-side distribution elements (such as power lines, gas pipes, gasoline stations, and tanker trucks), while at the same time considering what form these elements should take in the future.

On top of this, the situation at the Fukushima Daiichi Nuclear Power Station remains unpredictable, raising major concerns related to Japan’s stance regarding nuclear energy, which as of fiscal 2009 accounted for 270 billion kilowatt-hours of electricity out of the country’s total electricity supply of roughly 1 trillion kWh. There have been high hopes that nuclear power, alongside renewable energy, would lay the groundwork for a stable supply of low-carbon energy, but that goal for Japan and around the world has come into doubt as a result of concerns about the nuclear energy safety.

The tasks for the short term—now that the first summer season of annual peak power consumption is over for 2011—are clearly to avert major power outages or the need for planned blackouts during the period of increased electricity demand over the winter months and during the next summer season (Figure 2) by means that include reducing energy consumption when necessary and rapidly restoring energy production in the disaster areas. But these efforts should be carried out while also tackling issues related to ensuring a stable supply of energy over the long term, drawing on the lessons learned from the disaster.

For example, replacing nuclear power plants on the Pacific coast with thermal plants raises a variety of issues, including resource-related ones arising from the increased consumption of fossil fuels, the threat to economic viability from cost increases due to such factors as fuel costs, and the environmental impact of an increase in CO2 emissions.

The use of renewable energy sources like photovoltaic and wind power can be expected, but the time needed to switch over to these new technologies is on the scale of decades. Therefore, over the medium to long term, it will be necessary to take a comprehensive approach that combines a range of different options.

Policies to Consider in the Short Term

In order for Japan to avoid falling into socio-economic stagnation as a result of unstable supply and demand as well as cost increases, and seeing its domestic industry become less competitive globally as a result, plans geared to both the short term and the medium to long term must be immediately considered and implemented.

The anticipated results will not be forthcoming if issues that cannot be immediately resolved are grouped together with short-term initiatives. At the same time, though, it would be both wasteful and harmful to the future situation to implement emergency-response measures that are disconnected from medium- to long-term measures. Averting a breakdown in social and economic activity will require restoring the overall energy supply capabilities of Japan and thoroughly promoting energy conservation efforts that should have been carried out up to now. This will include the application of individual policies that grasp the purpose and importance of energy use and are economically viable.

More specifically, in the electricity sector, where a balance must be struck between the momentary fluctuations in electricity generation and use, it is vital to avoid large-scale power outages and planned blackouts due to the shortage of supply capability. This requires effective methods of electricity conservation to be carried out on a continual basis through energy efficiency and placing certain restrictions on socio-economic activities, and for these efforts to be carried out not only within industrial sectors involved in productive activities but also in the residential and commercial sectors, such as homes, offices, and retail stores.

In the wake of the March 11 disaster, a variety of products equipped with LED light elements were sold and the prices of these products fell. The switch to LED lights has pointed the way to great new possibilities, not only in the area of lighting but in other fields as well. There are many cases where electric appliances do not have switches to separately control each function or lack an energy-conservation mode (or have one that is too complicated to use or adjust). This includes power use for everything from lighting and air-conditioners to even heated toilet seats. It seems safe to say, then, that there is still considerable room for improvements in energy conservation without jeopardizing the activities in the industrial, commercial, and residential sectors—as long as energy users are given concrete explanations about what areas to focus on and what methods are best suited to their specific power uses. Initiatives in every sector are important. There are also plenty of energy-conservation possibilities that are being overlooked due to lack of short-term economic viability, even though they can be continued more successfully into the future—such as the example of replacing halogen lamps with LED lights, where the initial investment can be recouped within a year or two though reduced power fees and the lower replacement cost of these long-lived bulbs.

Policies to Consider Over the Longer Term

Over the medium to long term, it will be necessary to bring about energy supply and demand that is stable, secure, and sustainable by taking into consideration the resource constraints and environmental constraints related to future supply-demand structure. At the same time, we must consider the elements of uncertainty with regard to technology, the socio-economic situation, and other factors, while also drawing on the lessons of the March 11 disaster. In particular, preparations for the sort of major upheavals caused by an earthquake will require efforts not just on the supply side but on the demand side as well in order to avoid the need for substantial new investments in supply facilities or severe restrictions on energy use, such as planned blackouts.

The energy conservation efforts for the summer of 2011 were implemented under the Electricity Utilities Industry Law, allowing for the restriction of power usage. Every day, the media informed the public about the supply and demand situation for electricity, and various adjustments on the demand side were made on both individual and organizational levels. This is likely the first endeavor of such magnitude and duration to take place anywhere in the world since electricity first appeared. In terms of electricity management, this effort brought about the results on the largest scale through “demand activation,” which involves managing the demand side as well as the supply. Moving ahead with this approach can open up new perspectives. The concept of demand activation making use of new technologies is presented in Figure 3.(*1)

There are in fact constraints, however, in the areas of technology, systems, and security. In a case where demand activation involves the centralized control of millions of demand points, the malicious obstruction of the system could result in energy system instability and could negatively impact the security of energy demand itself. This makes it necessary to introduce restrictions on functions and structures. I think that the approach to take regarding energy systems, as we move forward, is to promote energy system integration, which involves combining the activation of electricity demand with the possibilities offered by thermal, gas, fuel, and every other sort of non-electrical energy.

Furthermore, as an essential point, it will be crucial to reemphasize that humans and societies need services that ensure such amenities as spaces with a comfortable temperature and a proper level of humidity, light, and power—rather than energy itself. That is to say, there will likely be a need for robust systems that combine technical, institutional, and other kinds of options to meet the constraints of global environment and energy resources and to respond to the social systems in place at a given time, in a way that is suited to people’s lifestyles. Indispensable to this will be the effort to efficiently and effectively engage in various initiatives, in the face of a diverse and uncertain situation, and to continually strive to envisage the future situation with regard to technology, institutions, and lifestyles.

Energy Supply and Demand Circa 2030—Four Scenarios

Next I want to present some of the results of an preliminary examination of future energy integration conducted using the ESPRIT(*2) (Electric Power System Planning Program Reflecting Interconnection and Transmission) model for analyzing long-term electricity demand, based on several scenarios for the post-3/11 energy situation in Japan.(*3)

ESPRIT is a tool to investigate long-term electricity demand by using one function that analyzes probable demand, including the optimization of connections for flows between interconnected systems; and another function concerning plans for the least expensive energy sources. Based on the demand curve for the specific time period (week, month, or season), the characteristics of the unit of generated electricity (rated current, efficiency, fuel type, minimal load, number of days for the planned shutdown, and accident rate), and the cost of fuel, ESPRIT analyzes optimum annual maintenance schedules. The next step is to use the load duration curve for each time period examined to arrive at the optimal load allocation, accounting for the possibility of generator failure, thereby determining the quantity of power of each power generation unit. As a result of the analysis, indices are calculated regarding such aspects as operating costs (fuel costs and power-outage costs), supply reliability (loss of load probability, expected unserved energy, etc.), and the volume of CO2 emissions.

(1) Preconditions and Assumptions

ESPRIT modeled each of the 10 power grids that exist in Japan, each operated by a different power company, while taking into consideration the Power Supply Plans of power companies for 2010 and 2011, the Japan Long-Term Energy Outlook, and the Japanese government’s Basic Energy Plan. Scenarios are then devised (as shown in Table 1) for situations based on four basic nuclear scenarios: (1) Predisaster plan, (2) Continuation of nuclear development (including scenario 2b, where nuclear power is eliminated in 40 years), (3) Suspension of nuclear development (and elimination in 40 years), and (4) Elimination of nuclear power within five years (including scenarios 4b and 4c, depending on whether thermal power or renewable generation is aggressively expanded to pick up the slack). Comparisons are made of the proportion of nuclear generation capacity under each scenario (Figure 4).

Table 1. Scenarios for Nuclear Power
  Nuclear powerThermal powerRenewable energy (cumulative output as of 2030 in gigawatts)
(1) Predisaster forecast According to the predisaster supply plans, long-term demand outlook, and the government’s Basic Energy Plan (forecast was for 9 new nuclear reactors by 2020 and another 14 reactors by 2030) Augmentation Solar: 53 GW
Wind: 10 GW
(2a) Continuation of nuclear development Nuclear development continues but at a pace slower than under the predisaster outlook Augmentation Solar: 80 GW
Wind: 28 GW
(2b) Continuation of nuclear development
(eliminated in 40 years)
Nuclear development continues but at a pace slower than under the predisaster outlook; nuclear power is gradually phased out over a 40-year period Augmentation Solar: 80 GW
Wind: 28 GW
(3) Suspension of nuclear development
(eliminated in 40 years)
Nuclear development limited to the two reactors currently under construction; nuclear power is gradually phased out over a 40-year period Augmentation Solar: 80 GW
Wind: 28 GW
(4a) Elimination of nuclear power within five years Total elimination of nuclear power within five years Augmentation Solar: 80 GW
Wind: 28 GW
(4b) Elimination of nuclear power within five years
(augmenting thermal power)
Total elimination of nuclear power within five years Aggressive augmentation by 37.5 GW to compensate for decrease in nuclear power Solar: 80 GW
Wind: 28 GW
(4c) Elimination of nuclear power within five years
(augmenting renewable energy)
Total elimination of nuclear power within five years Augmentation Solar: 160 GW
Wind: 160 GW

The “augmentation” of thermal power indicated in the predisaster forecast scenario was premised solely on the schedule for phasing out thermal plants powered by coal or natural gas over a 40-year period, starting in 2020, and on the announced limitation of oil-fired thermal plants. The construction of new thermal plants up to 2020 is based on the utilities’ Power Supply Plans, but from 2021 onward a scenario has been formulated for common use that seeks to ensure a minimum reserve margin of 10% in scenario 2b through the introduction of highly efficient coal-fired thermal plants (including some using integrated gasification combined cycle generation) and highly efficient natural gas combined cycle powered plants.

The deployment of photovoltaic generation assumes situations where solar panels are installed on new houses, existing houses, and other structures, while that of wind power is calculated according to the wind-power resources in each power system. Meanwhile, for scenario 4b, in which nuclear power is eliminated within five years while thermal power is augmented, the shortfall from the reduction in nuclear power generation (nearly 38 GW by 2030) would be made up for by the active use of thermal power. In scenario 4c, where nuclear power is eliminated within five years and renewable energy is augmented, photovoltaic and wind power would be introduced to the maximum extent, given the level of demand, with cumulative capacity of each power source reaching the level of 160 GW by 2030. The condition all the scenarios have in common is that power demand, which is assumed according to the Basic Energy Plan, falls steadily due to the pursuit of low carbon emissions after 2020. The Fukushima Daichi and Daini Nuclear Power Stations will be shut down permanently or out of operation.

(2) Share of Installed Capacity and Generation

Electricity demand in 2030 will have decreased compared to the level in 2020. One portion of the generation shortfall arising from reduced nuclear power capacity will be made up for by the introduction of renewable energy, but from scenario 2a, where nuclear development continues, through scenario 4, where nuclear power is eliminated within five years, the shortfall from reducing nuclear power will mainly be bridged by increased use of coal- and natural-gas-fired thermal plants, including new facilities stipulated under the Basic Energy Plan, and by greater use of the oil-fired plants whose utilization rate was planned to be low.

Comparing the three specific cases listed under scenario 4, where nuclear power is eliminated within five years, we see that the augmentation of thermal power in the case of 4b involves increased power generation from coal and liquefied natural gas, leading to a major decrease in the amount of the more costly oil-powered thermal power. In the case of 4c, where renewable energy is augmented, the extremely large-scale introduction of photovoltaic and wind power plants will lead to a decrease in electricity generated from thermal plants powered mainly by oil and natural gas, as well as an some increase in pumped-storage hydropower plants.

(3) Costs of Fuel and of Power Generation Development

Figures 5 and 6 indicate the fuel costs up to 2030 under each of the scenarios, as well as the combined cost of fuel and power generation development.

In Figure 5, the annual fuel costs from the rise in thermal power generation as of 2020, compared to the predisaster outlook, are estimated to be an increase of ¥1 trillion under scenario 2a (continued nuclear development), of ¥2 trillion under scenario 3 (suspension of nuclear development and elimination within 40 years), and of ¥4.5 trillion under scenario 4a (elimination of nuclear power within five years). Leading up to 2030 there will be a reduction in energy demand stemming from advances in energy conservation, renewable energy and highly efficient thermal power will be introduced, and the number of newly developed facilities will decrease in the case where nuclear development continues. In scenario 4a, though, it will not be possible to greatly bridge the cost gap compared to 2020, whereas great reductions in fuel costs can be expected under scenario 4b or 4c.

Figure 6, for its part, indicates the annual costs by adding the power generation development expenditures (with an assumed discount rate of 5%) to the fuel costs for each of the energy sources, with a 10-year investment recovery span for solar power, 20 years for wind power, and 40 years for system power supply. Under scenarios 2a to 4a, the savings in fuel costs from the increased use of thermal, photovoltaic, and wind power will offset the cost of developing those energy sources. Looking at scenarios 4a, 4b, and 4c, we can see that whereas the annual costs decrease in the case of 4b through the lower fuel costs resulting from expanding thermal power, under scenario 4c the development costs required for the large-scale generation of photovoltaic and wind power will result in higher overall costs. This suggests that excessive boosting of renewable energy will have economic drawbacks.

In every scenario excluding scenario 1, where renewable energy is introduced on a large scale, problems arise in power system operation regarding balancing of supply and demand because of fluctuations in renewable power generation resulting from such factors as time of day or weather. This situation may require curtailment of photovoltaic and wind power generation, in turn harming their economic viability. The amount of generation curtailment will rise along with the increased use of photovoltaic and wind power. Calculation results show that scenario 4c would result in a curtailment of photovoltaic and wind generation of around 20% or more, dependent on the characteristics of the fluctuation and countermeasures, and the amount of this curtailment would increase rapidly with the introduction of renewable energy on a larger scale.

(4) Carbon Emission Volume


Figure 7 shows the quantity of CO2 emissions. An increase in thermal generation would lead to an increase in emissions under each scenario, ranging from 50 million to 250 million tons. In scenario 4b, where nuclear power is phased out within five years and thermal power increased, there would be no major improvement in carbon emissions even by 2030, but the outcome will be influenced by the increase in the ratio of coal-fired plant operation. In scenario 4c, meanwhile, where the elimination of nuclear power within five years is balanced by increases in renewable energy, the large-scale introduction of solar and wind power will contribute to lower CO2 emissions.

Future Tasks

As Japan moves forward in its rebuilding and recovery efforts for its energy and power generation systems and devises policies to cope with the situation, it will be important to come up with measures for the short term as well as the medium and long term, including initiatives to counter a large-scale rise in fuel costs resulting from the loss of nuclear power plants. In the short term it will be important to adopt measures for energy conservation that can be continued into the future, while in the longer term plans must be formulated with an eye to future energy demand, drawing on lessons learned from the March 11 disaster.

The analysis of electricity demand for 2030 indicates that if the operations of new and existing nuclear plants are placed under restrictions, it will be difficult to make up the shortage with solar and wind power even with the maximum possible boosts to their capacity. This will mean that thermal power will play a major role in replacing nuclear power in the energy mix, leading to unavoidable major increases in fuel costs and CO2 emissions (as seen in scenario 4a). It also shows that major increases in the most efficient thermal power generation using coal and natural gas, along with large-scale introduction of solar and wind power, would make it impossible to bring the costs associated with energy supply or CO2 emissions down to the levels envisioned in the government’s Basic Energy Plan. A large-scale increase of solar and wind power would make it difficult to adjust the energy supply as needed, meaning a high probability of considerable restrictions in the energy available, given current technology. The analysis shows that future rollouts of renewable energy, if they are to go beyond a limited scale, will require technological breakthroughs.

Various means have been devised up to now with regard to security for electricity and energy demand, but it is necessary to strengthen approaches from various new perspectives, such as preparations for major blackouts, which the disaster has revealed to be insufficient. Moreover, the large-scale nature of thermal and nuclear power facilities, along with the restriction of wind resources to certain locations in Japan, make it unavoidable to position electric-power development in areas that are distant from the centers of demand. The nation will need a new electrical grid designed with the introduction of more solar power and new needs like electric-vehicle recharging in mind. Coming up with the “best mix” (including transmission and distribution facilities) is therefore important. In particular, the demand activation described in this analysis will be a vital approach in securing supply adjustment capability throughout the power system as a whole, balancing the demand side with the supply side—not only in cases of natural disasters and other emergencies but also at the development stage of renewable energy. It will be important to aim for steady implementation of demand activation in tandem with the crafting of information infrastructure and systems.

There will likely be a need in the future for a comprehensive examination of energy integration, taking into consideration technical and cost issues related to such factors as electricity sources, demand activation, predicted electricity generation, and the operations of electrical systems, as well as the achievement rate and applicability in the case of each technology developed, unit costs for fossil fuels, and uncertainties such as CO2 restrictions. And these evaluations must take place over the medium to long term.

(*1) ^ Ogimoto Kazuhiko et al., “Denryoku jukyū chōseiryoku kōjō ni muketa shūchū/bunsan enerugī manejimento no kyōchō moderu” (Cooperative Model for Centralization and Decentralization of Energy Management Aimed at Improving the Calibration of Energy Supply and Demand; Paper presented at the Power and Energy Conference of the Institute of Electrical Engineers of Japan, September 2011: I-16).

(*2) ^ Chen Luonan et al., “Benders bunkaihō ni yoru renkei keitō no saiteki dengen kaihatsu keikaku” (Optimal Electric Generation Planning for Interconnected Systems by Benders Decomposition), Transactions of IEE Japan, vol. 113-B, no. 6 (1993): 643–652. Ogimoto Kazuhito et al., “Chōki denryoku jukyū kaiseki shuhō to shisan kekka” (Techniques and Calculation Results for Analysis of Long-term Electricity Supply and Demand; Paper presented at the 25th Energy System, Environment, and Economy Conference of the Japan Society of Energy and Resources, 2009: 30–31). Ogimoto Kazuhito et al., “Taiyōkō hatsuden o fukumu chōki denryoku jukyū keikaku shuhō” (Techniques for Long-term Electricity Supply and Demand Including Photovoltaic Power Generation), Journal of the Institute of Electrical Engineers of Japan, vol. 130-B, no. 6 (2010): 575–583.

(*3) ^ Ogimoto Kazuhito et al., “Chōki no denryoku jukyū keikaku ni okeru teitansoka jitsugen no yobi kentō” (Preliminary Examination of Reducing Carbon Emissions Within a Long-term Plan for Electricity Supply and Demand; Paper presented at the 30th Annual Meeting of the Japan Society of Energy and Resources, June 2011: 20–21). Ogimoto Kazuhito et al., “Waga kuni no chōki no denryoku jukyū besuto mikkusu no yobi kentō” (Preliminary Examination of the Best Mix in Japan for Long-term Electricity Supply and Demand; Paper presented at the Electronics, Information, and Systems Conference of the Institute of Electrical Engineers of Japan, September 2011: PSE-11-152, PE-11-136).

energy efficiency nuclear power CO2 energy low carbon Ogimoto Kazuhiko ESPRIT energy integration renewable energy long-term electricity demand analysis system fuel costs emissions electricity conservation