Japan’s Energy Policy

Agency for Natural Resources and Energy (ANRE)

METI, JAPAN

1

2

Japan’s Energy Situation

The Strategic Energy Plan of Japan

Improvement of Energy Efficiency in Japan

Promotion of New and Renewable Energy

in Japan

Innovative Energy Technology Development

- Contents -

Japan’s Energy Situation

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Japan’s Energy Situation (1)

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- Total Primary Energy Supply in Japan -

Japan USA UK France Germany Italy EU

Dependence on Oil 49% 39% 35% 34% 37% 51% 40%

Dependence on Oil Imports 99.7% 60% ▲54％ 98% 97% 94% 74%

Dependence on Middle East 87% 23% 5% 24% 10% 30% 22%

Comparison of structure of energy demand and supply with other industrialised countries (Year 2002) (%)

Source :IEA

0

100,000

200,000

300,000

400,000

500,000

600,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Other

Hydro

Nuclear power

Natural gas

Coal

Oil

Gulf Warin 1991

2nd Oil Crisisin 1979

1st Oil Crisisin 1973

77% 48%

Source: METI

10

0m

illio

nK

L<O

il Eq

uiv

alen

t>

Japan’s Energy Situation (2)

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- Primary Energy Supply MIX in Japan -

16%

10%

0 1973 1979 1990 1995 2000 2007

Fossil fuel dependence

REN

NUC

GAS

Coal

LPG

OIL

Japan’s Energy Situation (3)

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- POWER Generation MIX in Japan -

NUCGAS COAL OIL

P.Hydro Hydro, Geo, Renewable

The Strategic Energy Plan of Japan

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Environmental protection

Efficient supply

Energy security

Japan’s Energy Policy

Energy-based economic growth

Environmental protection

Efficient supply

Energy policy

Energy security

Reform of energy industry and social system

Safety and public understanding

- Formulating the “Strategic Energy Plan of Japan” (revised in June 2010) in line with the “New Growth Strategy in Japan”

- Directing bold, concrete policy targets and specific policy measures

The Strategic Energy Plan of Japan (1)- Ambitious Targets Toward 2030 -

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Doubling Japan’s energy self-sufficiency ratio and its self-developed fossil fuel supply ratio its “energy independence ratio”to about 70%.Raising the zero-emissions power source ratio to about 70% .Halving CO2 emissions from the residential sector.Maintaining and enhancing energy efficiency in the industrialsector at the highest levels in the world.Maintaining or obtaining major shares of global markets forenergy-related products and systems.

Domestic energy-related CO2 emissions will decline by 30% ormore in 2030.

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Securing resources and enhancing supply stability– Deepening strategic relationship with resource rich countries under the

cooperation between the public and private sectors

– Support for upstream concessions with the risk money

– Enhancing development of domestic and overseas energy resources

An independent and environment-friendly energy supply structure– Expanding a feed-in tariff system

– Building 9 new or additional nuclear plants by 2020 and more than 14 by 2030

– New coal thermal plants planned for the future to be CCS-ready

– The world’s most advanced next-generation interactive grid network as soon as possible in the 2020s.

The Strategic Energy Plan of Japan (2) - Specific Measures to Achieve Targets (Supply side) -

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The Strategic Energy Plan of Japan (3) - Specific Measures to Achieve Targets (Demand side) -

Realizing a low carbon energy demand structure(Industrial sector)

– World’s most advanced energy efficiency through introducing the most advanced technologies

– Enhancing energy conservation law implementation

(Households)

– Net-zero-energy houses available by 2020

– Replacing 100% of lights with high-efficiency lights (including LED and organic EL lighting)

(Offices)

– Net-zero-energy building in new public buildings by 2020

– Enhancing support and regulatory measures (including “top runner” standards) to promote use of highly efficient equipment

(Transportation sector)

– Next generation vehicles share of new vehicle sales to 50% by2020, and up to 70% by 2030

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The Strategic Energy Plan of Japan (4) - Specific Measures to Achieve Targets (Demand side) cntd.-

Building next-generation energy and social systems– Demonstration projects for smart grid and smart communities both

domestically and abroad, and strategic international standardization

– Introducing smart meters for all users as early as possible in the 2020s

– Disseminating fixed fuel cells and developing a hydrogen supply infrastructure

Developing and disseminating innovative energy technologies– Drafting a new energy innovation technology road map

– Developing public-private cooperation on highly efficient and low carbon technologies

– Building a new mechanism to appropriately evaluate how international dissemination of Japan’s technologies, products and infrastructure contributes to reducing global greenhouse gas emissions

Improvement of Energy Efficiency in Japan

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0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1965 1970 1975 1980 1985 1990 1995 2000 2005

（石油換算キロトン／10億円）

（年度）

約３７％改善

Improvement of Energy Efficiency in Japan

(Source) “Total Energy Statistics” by ANRE

我が国の実質ＧＤＰ当たりエ

* Calculated according to IEA Energy Balances of OECD/Non-OECD Countries(2008edition) Index of each country making Japan 1, based on the value dividing primary energy supply by GDP.

Energy use per real GDP of Japan

(Oil converted kilo ton/1 billion yen)

Approx. 37% improvement

Fiscal Year

Primary energy supply per GDP unit of each country (2007)

1.02.0 1.8

2.53.1 3.1

6.0 6.0

7.9 7.9 7.8

17.5

3.0

0

2

4

6

8

10

12

14

16

18

（Index Japan=１.0）

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○ Japan improved the energy efficiency by 37% after the oil crises in the 1970s as a result of active activities made by both public and private sectors.

○ Japanese primary energy supply per GDP is the lowest in the world owing to various energy conservation measures taken for the respective sectors.

Approx. 37% improvement

Industrial

Promotion of introduction of energy-efficient equipment, etc. and development

of energy conservation technology (budget, taxation, policy-based financing)・Supporting private business operators that invest in improving energy-efficiency

・Supporting the introduction of energy-efficient equipment such as high-efficient water heaters

・Supporting energy-efficiency diagnosis and introduction of ESCO services

Measures based on Energy Conservation Law

Energy Efficiency is promoted through both regulatory and supportive measures.

Top Runner Standard (for household appliances,

automobiles, etc.)

Effort obligation and judgment standards

Reporting Requirements

Measures to encourage

improvements in EE in housing

Reporting

RequirementsReporting Requirements

Overall Picture of Energy Efficiency Initiatives

Commercial

(Business)

Commercial

(Residential)Transport

Obligations (Appointment of

Energy Manager etc)

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Top Runner Program:

The concept of the program is that fuel economy standards for vehicles and energy conservation

standards for electric appliances, etc. shall be set exactly the same as or higher than the best

standard value of each product item currently available in the market.

Target products （23 products）Fuel Efficiency

(km/L)

Energy conservation standards according to Top Runner

method

At the time of standard setting Target Fiscal Year

19km/L

18km/L

17km/L

15km/L15km/L

14km/L

13km/L

12km/L

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Achievement is judged

by weighted average

per product category

Example of Top Runner Program

Top Runner Program

1. Passenger vehicles

2. Freight vehicles

3. Air-conditioners

４．TV sets

5. Video-cassette recorders

6. Fluorescent lights

7. Copiers

8. Computers

9. Magnetic disc units

10. Electric refrigerators

11. Electric freezers

12. Space heaters

13. Gas cooking appliances

14. Gas water heaters

15. Oil water heaters

16. Electric toilet seats

17. Vending machines

18. Transformers

19. Electric rice cookers

20. Microwaves

21. DVD recorders

22. Residential router

23.Layer 2 switch

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Equipment Improvement of energy consumption

efficiency (Results)

Improvement of energy consumption

efficiency (Initial expectation)

TV sets

(CRT-based television)

25.7％（FY1997→FY2003） 16.4％

Videocassette recorders 73.6％（FY1997→FY2003） 58.7％

Air conditioners* 67.8％（FY1997→FY2004） 66.1％

Electric refrigerators 55.2％（FY1998→FY2004） 30.5％

Electric freezers 29.6％（FY1998→FY2004） 22.9％

Gasoline passenger vehicles* 22.8％（FY1995→FY2005） 22.8％（FY1995→FY2010）

Diesel freight vehicles* 21.7％（FY1995→FY2005） 6.5％

Vending machines 37.3％（FY2000→FY2005） 33.9％

Computers 99.1％（FY1997→FY2005） 83.0％

Magnetic disk units 98.2％（FY1997→FY2005） 78.0％

Fluorescent lights* 35.6％（FY1997→FY2005） 16.6％

Energy-saving standards for equipments with ※marks are defined by energy consumption efficiency per unit (ex: km/l), and those for equipments without ※marks

are defined by energy consumption quantity (ex: kWh/year). “Improvements of energy consumption efficiency” in the above Table are judged by standards of each

equipment (ex: If 10km/h changes to 15km/h, this is 50% improvement. (It is not calculated by fuel quantity of 10 liter/100km and improved quantity of 6.7

liter/100km to say the improvement is 33%.). And if 10kWh/yr changed to 5kWh/yr, this is also 50% improvement.)

Energy-saving Effects from Top Runner Program

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Promotion of New and Renewable Energy in Japan

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Future vision for Renewable Energy deployment

■ Increase “Renewable Energy / Primary Energy Supply” to 13% in 2030,

depending on installation design.

LPG 18 (3%)

LPG 18 (3%)

0

100

200

300

400

500

600

700

Renewable energy, etc.

Renewable energy, etc.

67 (13%)

Nuclear power60 (10%)

Nuclear power122 (24%)

Natural gas105 (18%)

Natural gas80 (16%)

Coal 130 (22%)

Coal 85 (17%)

Petroleum 244 (41%)

Petroleum 142 (28%)

Actual, fiscal 2007 Estimated, in 2030

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Regulatory Scheme & Incentives for Promoting New and Renewable Energy

energy suppliers (electric power companies,

gas companies, oil companies) have to use

non-fossil energies while using fossil oil

efficiently

Areas to develop and promote installation :

from “oil alternative” to “non fossil”

■ Revision of Alternative Energy Act

■ Act for Promotion of Non-fossil Energies byEnergy Suppliers

■ New Energy Promotion Act

Breakdown Result

0.010.020.030.040.0

50.060.0

70.080.0

2003 2004 2005 2006 2007

（Fiscal Year）

（１

００

ＧＷ

ｈ／

年）

Wind Power PV Hydro Biomass Others

■ RPS（Renewables Portfolio Standards）Act

- electric utilities have to use electricity generated

from renewable energies

- the target increases until FY2014 year by year

■ Incentives

- subsidies and tax incentives for residence and non-residence

Numerical Target of RPS Act

for Residence for Non-Residence

Subsidies

Photovoltaic

70,000 yen per kW(system under 700,000 yen)

All the New Energies

non profit bodies etc.

half of installation cost

companies

1/3 of installation cost

Taxations

Photovoltaic

Tax Reduction for Home

Loan and for Reform to

save the energy

All the New Energies

7% Tax Reduction

(Small & Medium Entities)

or Special Depreciation

Incentives (Subsidies and Taxations)

○Of the electricity generated by photovoltaic generation systems, surplus electricity will be purchased.○ The buyback period is within the 10 years from the start of the program. The buyback price is fixed.

(※The buyback price may differ depending on the fiscal year in which a panel is installed. In the initial stages, it is ¥48/kWh for residential use [less than 10kW].)

○ Expenses will be born by all electricity users.

Major points of the buyback system

Purchase revenue(¥48/kWh for

residential use)

Surplus electricity

Users of photovoltaic generation systems

Solar surcharge

(Born by all electricity users)

ElectricityE

lectric

Pow

er

Co

mp

an

ies

Ele

ctric

ity U

se

rs

Purchase revenue(¥24/kWh for purposes

other than residential use)

Surplus electricity

※In the initial stages after installation, ¥48/kWh for residential use (less than 10kW) and ¥24/kWh for other uses.In the case where a private electric generator is also installed, ¥39/kWh and ¥20/kWh, respectively.

Outline of the New Buyback Programfor Photovoltaic Generation

Innovative Energy Technology Development

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Innovative Energy Technology Development

⑱HEMS/BEMS/Local-Level EMS※

⑬High-Efficient house & building ⑭Next-Generation High Efficiency Lighting

⑯Ultra High-Efficiency Heat pumps

⑰High-Efficiency Information Device and System

⑦Intelligent Transport System

①High-Efficiency Natural Gas Fired Power Generation

⑥High-Efficiency Superconducting Power Transmission

③Carbon Dioxide Capture and Storage(CCS)

④Innovative Photovoltaic power Generation

⑪Innovative materials, Production/Proceeding

⑫Innovative Iron and Steer making process

⑧Fuel Cell Car

Efficiency Improvement Low carbonization

⑮Stationary Fuel Cell

Su

pp

ly S

ide

②High-Efficiency Coal Fired Power Generation

⑤Advanced Nuclear Power

Generation

Power Generation

/transmission

Industry

Transportation

Commercial

Dem

an

d S

ide

⑲High-Performance Power Storage

⑳Power ElectronicsCross-Cutting

⑩Production of Transport Biofuel

Hydrogen Production, Transport and Strorage

12③ＣＣＳ（restated）

⑨Plug-in Hybrid Vehicle / Electric Vehicle

※EMS：Energy Management System、HEMS：House Energy Management System、BEMS：Building Energy Management System

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■ Deployment (Subsidy)

Subsidy for Installation of Residential Photovoltaic System

Subsidy for Purchasing of Clean Energy Vehicle

Subsidy for Installation of Residential Fuel Cell

Subsidy for Installation of New Energy (non-residence)

■ Research and Development

Post-silicon Innovative Photovoltaic Cells

Next Generation Wind Power Technologies

Bio-ethanol Production System from Celluloses

Effective Transform Technologies for Biomass Energy

R&D for Scientific Innovation on New Generation Batteries

Research on Storage Batteries with Various Appliances

R&D for Practical Use of Polymer Electrolyte Fuel Cell

Advanced Research on Materials for Storage of Hydrogen

201

43

61

364

15

3

8

36

30

10

412

114

80

389

15

3

19

35

30

64

51

9

220

0

20

161

9

2

3

24

Budget

128 billion yen for FY 2010 Budget Request

unit ：100 million yen

Budget Request Budget Supplemental Budget

for FY2010 for FY2009 for FY2009