METI’s Strategic Policy Committee Meets Over Analyses of 2050 Scenarios

18 May, 2021

Kenta Nagai

On May 13, the Strategic Policy Committee, under the Advisory Committee for Natural Resources and Energy of the Ministry of Economy, Trade and Industry (METI), addressed-as it had done at an earlier meeting on April 28-future energy policy toward achieving Japan's goal of carbon neutrality by 2050. The policy committee was chaired by Chancellor Takashi Shiraishi of the Prefectural University of Kumamoto.

The meeting started with one member of the policy committee, Dr. Keigo Akimoto, group leader and chief researcher of the Systems Analysis Group at the Research Institute for Innovative Technology for the Earth (RITE), explaining the results of analyses of scenarios to evaluate power source compositions, costs, etc., on the assumption of multiple approaches to overcome technological challenges. The committee members then exchanged their views and opinions.

In December 2020, the committee had provided reference values for total generated electricity in Japan in 2050 as follows: 50 to 60 percent for renewable energies, 30 to 40 percent for nuclear power combined with fossil fuels plus CCUS (carbon-dioxide capture, utilization and storage), and about 10 percent for hydrogen/ammonia. It then asked RITE to develop and analyze multiple scenarios.

In addition to the 'reference value' case, the six scenarios and assumptions considered by RITE were as follows:

- renewable energies at 100 percent

- dramatically reduced prices for renewable energies

- increased use of nuclear power

- dramatically reduced prices for hydrogen/ammonia

- dramatically increased CO2 storage (CCUS)

- changes in demand (e.g., in regard to automobiles).

Dr. Akimoto then introduced a model, known as 'DNE21+,' used to assess measures for global energy and climate change, and which served as the basis of analyses of the scenarios. Given that the model was created for global assessments, as well as the particular social and physical restrictions in Japan on the use of nuclear power and renewable energies, he cautioned that there were limits in using it.

The results showed costs of electric power to be JPY24.9/kWh in the 'reference value' case (nuclear power at 10 percent and fossil fuels plus CCUS at 23 percent), nearly double the JPY13/kWh that had been estimated in 2020 for 2050, and JPY53.4/kWh in the case of 100-percent renewable energies. In the case of increased use of nuclear power, on the other hand, the power costs were JPY24.1/kWh, at an assumed share of power source composition of 20 percent, on the premise of new and replacement reactors being built. In the cases where prices of hydrogen/ammonia were reduced, and where CO2 storage via CCUS was increased, electric power costs were estimated at JPY23.5/kWh and JPY22.7/kWh, respectively.

Some members praised the results as a foundation for future deliberations, while others asked for closer examinations from the viewpoint of disseminating easily understood information, and in terms of consistency with industrial policy.

Meanwhile, President Eiji Hashimoto of Nippon Steel, speaking on behalf of the steel industry-a major emitter of CO2-said that he was concerned about uncertainty in the commercialization of hydrogen use, stressing that 'stable supplies and costs are musts.' He added that the steel industry hoped to establish zero-emission production processes and contribute to Japan's growth.

Next, Shuzo Sumi (senior executive advisor at the Tokio Marine and Nichido Fire Insurance Co.), who has been outspoken about promoting technological innovation, noted the existence of geopolitical and other risks regarding CO2 transport and storage overseas under CCUS. He continued by saying that nuclear power had to be maintained to ensure a balanced energy composition.

Another committee member voicing his opinions at the meeting was Professor Akira Yamaguchi of the Graduate School of Engineering at the University of Tokyo, who also serves on the Nuclear Energy Subcommittee under METI's Advisory Committee for Natural Resources and Energy. He stressed the need to issue a more realistic Strategic Energy Plan, asking how uncertainty could be resolved through policy.

Recently, on May 12, Japan's Kansai Electric Power Co. (Kansai EP) released a plan for operating its Mihama-3 Nuclear Power Plant (NPP) beyond forty years, the first domestic NPP to be so operated. The professor cited the long-life operation of reactors overseas, including the example of the Surry-1 and -2 NPPs in the United States, which recently received permission to operate for eighty years.

As for building new reactors and replacements for older ones, Yamaguchi noted the long lead times in technological development, adding that the planning of advanced reactors must be launched now.

On May 14, one day after the Strategic Policy Committee meeting, METI Minister Hiroshi Kajiyama spoke to the press following a Cabinet meeting, reiterating the need to comprehensively address the issues of cost, stability of supplies, and safety, among others, thereby implying his readiness to listen to all opinions. 'Japan, a resource-poor country,' he said, 'is not in a position to swing only at its favorite pitches, as other countries might.'

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