May 31, 2018


Shaping Japan's Energy toward 2050 Participating in the Round Table for Studying Energy Situations

Keywords: Climate Change Energy Policy Newsletter Nuclear Power Renewable Energy 

JFS Newsletter No.189 (May 2018)

The 2nd meeting of the Round Table for Studying Energy Situations on youtube

Japan's Basic Act on Energy Policy directs the government to draft a Basic (or, recently, "Strategic") Energy Plan and review it once every three years.

The Basic Energy Plan of 2010 stated that to boost the zero-emissions power supply (nuclear + renewable energy) to a 70% ratio, 14 or more additional reactors would need to be built, increasing the utilization rate of nuclear power plants and deploying renewable energy to the maximum extent possible.

After the 2011 Tohoku earthquake and tsunami on March 11, 2011 and the subsequent accident at Tokyo Electric Power Company's Fukushima Daiichi Nuclear Power Plant, the Basic Energy Plan of 2014 positioned nuclear power as "an important base-load power source," stating that dependency on nuclear power generation would be lowered to the extent possible by efforts to save energy and introduce renewable energy as well as by improving the efficiency of thermal power generation, etc., while proceeding with the restart of the nuclear power plants.

Renewable energy was rated as facing "various challenges" in terms of stable supply and costs at that moment, but as a promising, multi-characteristic, important energy source that could contribute to energy security as it can be domestically produced and is free of greenhouse gas emissions.

Based on the Strategic Energy Plan, the Long-term Energy Supply and Demand Outlook compiled in July 2015, stated that the electric power supply-demand structure in fiscal 2030 would be as follows: renewable energy approximately 22 to 24%, LNG 27%, coal 26% and oil 3%, reducing dependence on nuclear power plants, which had been about 30% before the 2011 Tohoku earthquake and tsunami, to around 20 to 22%.

In response to subsequent changes in circumstances, the Strategic Policy Committee of the Advisory Committee for Natural Resources and Energy began meeting in early August 2017 to discuss the next Strategic Energy Plan.

Establishing a New 'Round Table for Studying Energy Situations'

Beyond the nation's Strategic Energy Plan toward fiscal 2030, we need further study and initiation of a discussion about the future. With a mission of determining the future direction of long-term energy policies based on energy-related forecasts for 2050 in response to the Paris Agreement, the Round Table for Studying Energy Situations (hereafter, the Round Table) was established by the Minister of Economy, Trade and Industry. As a member of the Round Table, I would like to tell you about the discussions we had there and the final proposals of the Round Table.

The website of Japan's Agency for Natural Resources and Energy describes the role and status of the Round Table as follows:

"... under the Plan for Global Warming Countermeasures based on the Paris Agreement, Japan decided to aim at achieving an 80% reduction in existing greenhouse gas emissions by 2050 as a long-term goal. Japan should achieve this goal under the fair and effective international frameworks for the agreement in which all major countries participate, while leading the globe in encouraging major greenhouse gas emitting countries to engage in reduction efforts and balancing global warming countermeasures, taking into account both their technical capabilities and the need for economic growth.

Such an ambitious goal may be difficult to achieve if we only continue current efforts. To overcome this challenge, Japan needs to achieve technological innovations and reduce emissions totals through international contributions. To this end, METI will newly establish a Round Table for Studying Energy Situations under the leadership of the METI Minister, aiming to bring together a wide variety of ideas and provide experts with the opportunity to hold discussions based on the widest range of possible solutions."

Awareness that the goals set under the Paris Agreement could not be achieved by continuing current energy policy and conventional discussions led to establishment of the Round Table. Nuclear energy policy is one option toward this end, and the Round Table was established not for questioning the existence of nuclear power plants, but as a place to discuss Japan's energy policy from various perspectives for achieving "an 80-percent reduction target of GHGs in 2050" -- which is extremely high.

The Round Table has a total of eight members: Masami Iijima of Mitsui & Co., Ltd.; Makoto Gonokami, President of The University of Tokyo; Masahiro Sakane, Councilor of Komatsu, Ltd.; Takashi Shiraishi, President of the Institute of Developing Economies, Japan External Trade Organization; Hiroaki Nakanishi, Executive Chairman of Hitachi, Ltd.; Yoichi Funabashi, Co - founder and Chairman of Asia Pacific Initiative; Naoko Yamazaki, Astronaut; and myself, Junko Edahiro.

I joined the Round Table discussions with three perspectives: the environment, local communities and citizens. In particular, there had not been much focus on "local communities" thus far in the Basic Energy Plans and energy policies. In previous energy policies, how to import fossil fuels, including oil, in a stable manner from abroad had been given much attention. In Japan, however, where the population is decreasing and society is aging, how to meet local energy demands will be increasingly important from now on.

I couldn't believe that in 2050, large-scale power plants would be able to deliver power to households in all corners of Japan with long distribution lines. I expected each local community to be more resilient, with a local system that used locally generated power flexibly, eliminating transmission losses. I hoped for there to be highly resilient communities, where even if energy imports were to stop due to international events, it wouldn't cause havoc in people's lives or the economy.

Little attention, however, has been paid to technology or legal frameworks for communities aiming for energy independence. The first discussion agenda proposed by the Round Table secretariat lacked the perspective of "local communities."

Deliberations of the Round Table for Studying Energy Situations

The first meeting was an introduction and briefing from the secretariat. After that, at the second to seventh meetings, we spent two and a half hours each time hearing from guest speakers, mainly from overseas, who imparted knowledge important to considering energy in 2050. The four main themes were "trends in geopolitical risks concerning energy" (second meeting), "climate change countermeasures and energy policy" (third and sixth meetings), "energy companies' management strategies" (fourth and fifth meetings), and "technology and innovations" (sixth and seventh meetings). The guest speakers were as follows:


  • Dr. Paul Stevens (Distinguished Fellow, the Royal Institute for International Affairs, UK)
  • Mr. Adam Siminski (Chair for Energy and Geopolitics, Center for Strategic and International Studies, USA)

<Climate Change> 

  • Prof. Jim Skea (Professor of Sustainable Energy, Imperial College London, UK)
  • Mr. Michael Shellenberger (CEO of the NGO Environmental Progress, USA)
  • Dr. Felix Chr. Matthes (Research Coordinator, Energy & Climate Division, Oeko-Institut e.V., Germany)

<Energy Companies>

  • Mr. Matthias Bausenwein (General Manager for Asia Pacific, Orsted, Denmark)
  • Mr. Ralph L. Hunter, Jr. (Managing Director and Chief Operating Officer, Exelon Nuclear Partners)
  • Mr. Guy Outen (Executive Vice President, Royal Dutch Shell, UK)
  • Mr. Didier Holleaux (Executive Vice-President, ENGIE, France)
  • Ms. Marianne Laigneau (Senior Executive Vice President, EDF, France)

<Technology and Innovations> 

  • Mr. Takeshi Uchiyamada (Chairman, Toyota Motor Corporation, Japan)
  • Mr. Richard Bolt (Secretary, Department of Economic Development, Jobs, Transport and Resources, State Government of Victoria, Australia)
  • Dr. Arun Majumdar (Director, Precourt Institute for Energy, Stanford University, USA)
  • Mr. John L. Hopkins (Chairman and Chief Executive Officer of NuScale Power, LLC., USA)

Content and Implications of the Recommendations

The eighth and ninth meetings featured discussions toward compiling the final recommendations. The full version of the recommendations is available at the following link, in Japanese.

"Recommendations by the Round Table for Studying Energy Situations ? Initiatives for Energy Transitions" (Full version, in Japanese only) (Key Points of the Recommendations, in English)

The introduction is only one page long, but it articulates the basis of these recommendations and major orientations. It lists three particular points on which the recommendations are based, as follows:

(1) The stance that the Fukushima Daiichi Accident is a starting point. This is consistent and immutable. (2) The essence of the evolving situation, which is "possibility and uncertainty." (3) A course toward energy self-sufficiency, an unvarying requirement in which discontinuous energy transitions through technological innovation will be indispensable.

The recommendations have been widely covered by various media, focusing particularly on the explicit statements of "making renewable energy a major power source" and "decreasing Japan's dependency on nuclear energy." While every member of the Round Table agreed on renewable energy, there were heated discussions over "decreasing Japan's dependency on nuclear energy," between members from industry insisting, "This shouldn't be included," and our side, who wanted to include it explicitly. In the end, the statement remained in the recommendations with no changes.

In addition, the recommendations also include certain points that are crucial from a mid- to long-term perspective. The following three points have importance from my point of view.

First Point: Planning in Consideration of an Uncertain Future

The first important idea embedded in the recommendations is a multiple-scenarios approach and scientific review mechanism.

As one of the three basic ideas previously described, an understanding of uncertain, unpredictable energy situations is shared as a common ground for developing energy policies.

As far as I can see, the existing energy policies have been developed conventionally under the premise of fixed visions of "how our future ought to be" or "our future has to be like this," upon which the public administrations implement measures to fulfill their expectations. However, after listening to the talks by the 14 guest speakers at the Round Table, we had come to a shared understanding that "since the future is uncertain, we face high risks if we proceed with the current presuppositions."

Therefore, the recommendations state that Japan should develop a mechanism to develop multiple scenarios instead of just one scenario, conduct scientific reviews, and adjust goals and measures flexibly according to changes in circumstances and advancement of technologies.

This is a crucial understanding and orientation. To achieve this, it will be necessary to consider how to develop multiple scenarios, who is to conduct scientific reviews as a mechanism and how to establish its governance. These points will be on the agenda for future discussion and development.

Second Point: Perspective of Locality

The second important point is that the recommendations feature the perspective of locality prominently. I am pleased to see this as I have strongly insisted on this point from the very first Round Table meeting. In the document, this is referred to as "distributed energy systems." The following is a quote from the recommendations, translated by JFS."

Policies for Solving Issues with Efficient, Distributed Energy Systems

Pursuing downsizing and high efficiency of renewable power generation facilities, technological innovations in batteries and fuel cell systems, electrification of transportation systems, advancement of technologies in digitalization and smart grids that enable demand and supply control at a local level, and effective combinations of these technologies will boost the feasibility of establishing efficient, stable, decarbonized, demand-driven distributed energy systems with compactly integrated systems of electricity, heat and transportation.

Railway companies, information technology companies, hospitals, bases and other facilities have actively introduced in-house power generation systems. From the standpoint of energy security, they have an interest in distributed energy systems based on innovative technologies. These players contribute to acceleration of energy independence at the local level. From the viewpoints of both energy security and local communities, leadership should be encouraged to develop economically efficient, stable, distributed energy systems backed up with cutting-edge technologies, and promote such technologies worldwide.


Strengthening Emerging Energy Conversion Industries and Reconstructing Energy Infrastructure

In the field of distributed energy systems, locally based companies with ambitious entrepreneurship are expected to emerge as leaders. In this situation, it will be necessary to have a group of globally developing comprehensive energy providers, a group of locally based companies responsible for creating distributed energy systems, and a business environment to produce such companies. Also, a structure to accelerate energy conversion and decarbonization should be established, utilizing the advantages of both types of companies. In this process, it will be necessary to accelerate the updating of energy infrastructure by using power grids designed for the next generation, developing distributed networks, and so on.

Third Point: The Times Have Changed from Single Power Sources to Flexible Totally-Controlled Power Sources

The third important point is that we are not in an age of choosing power sources based on cost anymore, that is, based on whether renewable energy is expensive or nuclear energy is less expensive.

Until recently, ten power utility giants dominated the market from power generation to energy supply to industries and households in Japan. There used to be a limited number of power producers and countless consumers.

The electricity market structure is changing significantly these days. New power companies have emerged. In-house power generation at companies and homes is also increasing. The situation has become one of countless electricity producers with countless consumers.

Selling generated electricity and purchasing the necessary volume is like pouring electricity into a "big electricity pool" and taking out electricity from the pool. The electricity being poured into the pool originates from different sources, including renewable energy, thermal power and nuclear power. Ultimately, the total volume in the pool should match the volume of demand at the time.

For consumers, it is not a matter of choosing a single electricity source anymore such as renewable energy stored in batteries or nuclear power. In short, this is the idea of complementing power with other power sources to stabilize the electricity supply.

With the advancement of information technologies, the Internet of Things and digitalization, we will be able to link every power source and control the output to accommodate fluctuating demand. In addition, demand-side management to control power demand to match the supply will be integrated with supply control. By using surplus electricity to produce hydrogen and methane for use as fuels and storing them to be used when needed, energy storage will be possible. This is available now only with expensive batteries and pumped hydro. All of these technologies will increase the flexibility of whole energy systems. There is fierce competition in related technological development worldwide to bring forth the next competitively advantageous energy source.

In the prospects for future energy systems stated above, we need to consider the cost of controlling the whole energy system to regulate individual sources, including costs for network operations and development of hydrogen, methane and other forms of storage in the future, in addition to the costs of the energy sources. This point has been added to the recommendations as "a shift from cost estimation by source to cost-risk analysis within energy systems for decarbonization."

The above are the "three key points" from my point of view in the Recommendations by the Round Table for Studying Energy Situations.

In Conclusion

Having received the Round Table's recommendations, the Strategic Policy Committee, which was in charge of determining the next Strategic Energy Plan, undertook a review of the existing Strategic Energy Plan with a perspective toward 2050. On May 18, the committee finished arranging the draft of Strategic Energy Plan 2018, which will be finalized by cabinet approval.

I appreciate that my participation in all meetings of the Round Table taught me many things and gave me an important chance to get a direct feel of the dynamic, rapid changes in the global energy situation. I am also happy that I could succeed in adding the local viewpoint in the proposals, as I've been involved with activities to recreate local communities across Japan for many years. At the meeting, I proposed several effective methods for implementing discussions such as scenario-planning and public consensus building through dialogue, which could be useful for further discussions on energy.

Finally, let me tell you about a small contribution I made: a change in the seating style at the meeting. Governmental committee meetings in Japan usually have participants seated in rows, with the governmental officers sitting on one side of a long rectangular table in a row and the committee members sitting on the other side of the table in a row. That makes it hard to see the other members' faces. At the end of the first meeting, I requested a change in the seating style, saying "We can't talk without seeing each others' faces. Could you change the layout of chairs and tables so that we can all see each other?"

At the second meeting and subsequently, the tables and chairs were placed in a circle. I believe it helped the participants -- members, guest speakers and officers -- by creating a good atmosphere for discussions. The "learning organization" concept embraces the idea that the quality of the atmosphere for communication at a meeting effectively determines the quality of the relationships within the meeting. In essence, a better atmosphere at a meeting improves the quality of the relationships therein, which in turn increases the quality of thinking, resulting in better actions and outcomes. Thus I believe this change in the seating style contributed to more meaningful discussions and better results.

Written by Junko Edahiro