EWG50 Agenda 3 50th Meeting of the APEC Energy Working Group (EWG50) Honolulu, the United States Japan’s Efforts toward Strengthening Energy Security in the Asia-Pacific region 16-17 December 2015 Agency for Natural Resources and Energy Ministry of Economy, Trade and Industry (METI), Japan Let me briefly introduce Japan’s efforts to strengthen energy security in the Asia-Pacific region.

Contents APEC Initiative for Enhancing the Quality of Electric Power Infrastructure LNG Producer-Consumer Conference 2015 The first one is APEC Initiative for Enhancing the Quality of Electric Power Infrastructure.

1. APEC Initiative for Enhancing the Quality of Electric Power Infrastructure Cumulative investment in Asian electric power sector is expected to reach approximately US$ 6.7 trillion by 2035. Electricity demand in Southeast Asian countries will increase by 140% between 2012 and 2035, which leads to cumulative investment of about US$ 1.0 trillion in power sector. Figure. Share of cumulative investment and energy efficiency by region (2014-2035) Figure. ASEAN average annual investment in power generation capacity and T&D networks According to IEA, cumulative investment in Asian power sector between 2012 and 2035 is estimated to reach about US$ 6.7 trillion in order to satisfy the electricity demand hike. On the other hand, electric power development projects in the past have often reported undesirable results: for example, construction delays, unexpected cost increase, output degradation and environmental pollution. Inefficient power infrastructure leads to not only short-term economic losses but also stagnation of economic activity and investment. Asia (Non-OECE) 41% (Source: IEA World Energy Investment Outlook (2014)) (Source: IEA Southeast Asia Energy Outlook (2013))

1. APEC Initiative for Enhancing the Quality of Electric Power Infrastructure In order to develop high-quality electric power infrastructure and provide stable supply of electricity in the region, Japan has launched APEC Initiative for Enhancing the Quality of Electric Power Infrastructure in June 2015. This Initiative is cosponsored by the Philippines, Peru, Chinese Taipei and the United States. The Initiative is mainly aimed at formulating a guideline for that purpose. After the guideline being finalized, capacity building for disseminating the guideline will be conducted. Scope of the Guideline Target users Government officials in charge of electricity business and electric power providers Aim Provide important elements to be considered when developing individual high-quality electric power infrastructure Potential elements The performance of infrastructure (efficiency, durability, resilience), externality (environmental impacts, safety, local involvements), lifecycle costs Coverage Throughout construction, operation and maintenance (O&M) To achieve secure and sustainable power supply, high-quality electric power infrastructure is important. Not only short-term financial interest but also long-term and appropriate perspectives such as CO2 emissions reduction and resilience should also be taken into consideration in constructing and operating electric power infrastructure. In this context, Japan launched APEC Initiative for Enhancing the Quality of Electric Power Infrastructure this year. This Initiative is co-sponsored by the Philippines, Peru, Chinese Taipei and the United States. The main purpose of the Initiative is formulating a guideline for that purpose and disseminating the guideline through capacity building.

1. APEC Initiative for Enhancing the Quality of Electric Power Infrastructure Japan held the Workshop for Enhancing the Quality of Electric Power Infrastructure in August in Tokyo with the help of APERC. Participants shared views on the bad practices and advanced cases of electric power infrastructure development and operation. Participants discussed a potential guideline, the role of APEC and collaboration between APEC Economies in order to enhance quality of electric power infrastructure. See http://aperc.ieej.or.jp/publications/presentations/apec_events_detail.php?article_info__id=202 APEC Workshop for Enhancing the Quality of Electric Power Infrastructure Date: 25-26 August 2015 Location: Tokyo, Japan Participants:　about 40 people from Asia-Pacific economies and regional/international organizations APEC Canada, Chile, Indonesia, Japan, Malaysia, NZ, Peru, the Philippines, Chinese Taipei, Thailand, the US, Viet Nam Non-APEC Cambodia, Laos, Myanmar Regional/international organizations ADB, APERC, ACE, HAPUA Companies TEPCO, MHPS, CSSC, KPMG In order to share experience in developing and operating electric power infrastructure and discuss what should be considered in order to ensure its quality, Japan held the Workshop in August in Tokyo with the help of APERC. 40 officials and experts from Asia-Pacific Economies, regional/international organizations and private companies joined the Workshop. They shared views on the bad practices and advanced cases and discussed a potential scope of guideline and the role of APEC. For presentation materials at the Workshop, please access the APERC’s website.

1. APEC Initiative for Enhancing the Quality of Electric Power Infrastructure At the EMM12, APEC Energy Ministers welcomed the new APEC Initiative for Enhancing the Quality of Electric Power Infrastructure taking into consideration not only resilience to extreme weather events but also lifecycle costs, environmental impact, responsiveness to changing market circumstances and business continuity. The Ministers instructed the EWG with the support of APERC, in cooperation with other international and regional organizations to formulate a document of best practices to enhance the quality of electric power infrastructure in the Asia-Pacific region. The launch of the Initiative was welcomed at the APEC Energy Ministerial Meeting in Cebu this October. Also formulating a guideline for enhancing the quality of electric power infrastructure was instructed by the Ministers.

1. APEC Initiative for Enhancing the Quality of Electric Power Infrastructure 22 June 2015 EWG49 <Gyeongju, Korea> Explain the overview of the initiative 25-26 August 2015 1st Workshop <Tokyo, Japan> Share each economy’s experience in developing electric power infrastructure and discuss what should be considered in order to ensure its quality 13 October 2015 APEC Energy Ministerial Meeting (AMM) <Cebu, the Philippines> APEC Energy Ministers welcome the initiative and instruct the EWG to formulate the guideline 16-17 December 2015 EWG50 <Hawaii, the United States> Report the result of the 1st Workshop and the AMM Spring 2016 EWG51 <Australia> Explain the draft guideline to EWG members 2nd Workshop <Tokyo, Japan> Discuss the draft guideline Autumn 2016 APEC Ministerial Meeting <Peru> APEC Ministers welcome the guideline End of 2016 to 2017 Hold seminars <Developing economies> Disseminate the guideline Based on the instruction by APEC Energy Ministers this October, Japan has started to formulate the guideline in cooperation with APERC aiming for finalizing it by next autumn 2016. During the process of drafting the guideline, in order to receive and reflect comments as much as possible, we will discuss the draft guideline with EWG members at the 2nd Workshop which will be held in Tokyo next spring. After completing the guideline from the end of 2016 to 2017, we will hold seminars in several developing economies in order to disseminate the guideline.

2. The LNG Producer-Consumer Conference 2015 On September 16, 2015, the LNG Producer-Consumer Conference 2015 (The 4th Conference) was held. Including ministerial-level officials and top business executives, more than 1,000 people from about 50 nations attended the conference. See http://www.lng-conference.org/english/index.html 1. Outline of the Conference Date: September 16, 2015 （9:00 a.m.- 4:30 p.m.） Venue: The International Convention Center PAMIR, The Grand Prince Hotel New Takanawa (Tokyo, Japan) Participants: Over 1000 from 50countries, including 90 from the Media 2. Main Speakers 【Consumers】 Gov.: Japanese Minister of Economy, Trade and Industry, Korean Vice Minister of Trade, Industry and Energy, Senior Official from Singapore government Corp.: CEO of Indian Petronet LNG , Chairman of Taiwanese CPC , President of JERA and Tokyo Gas , Vice President of CNPC Research Institute, 【Producers】 Gov.: Qatar Minister of Energy &Industry Senior Officials from US, Australian , Indonesian Government Corp.: ExxonMobil, Shell, Total, Sempra, Veresen 【Others】 Head of IEA, ERIA, IEEJ and JOGMEC Finally, let me briefly introduce the LNG Producer-Consumer Conference 2015. On September 16, Japan held the Conference in Tokyo. Including ministerial-level officials and top executives of related enterprises, more than 1,000 people involved in the field from about 50 economies around the world attended the conference. They discussed various issues and challenges which must be overcome to secure a stable, competitive and flexible global LNG market. As the largest importer of LNG in the world, Japan will support this open platform and maintain this momentum towards a functional LNG market.