Future of Japan’s Energy Kiyoaki Aburaki March 8, 2012

2 Power Output in 2009 Total TkWh, (Source) Federation of Electric Power Companies (FEPC)

3 Time: 3/11/11, 14:46 Magnitude : 9.0 Depth: 30km

4 Shut down by the earthquake Shut down by the earthquake Based on a Kyodo graphic Shut down for inspection after 3.11 Shut down for inspection after 3.11 As of 3/5/2012

5 Appeared in WSJ, July 29 Energy Conservation in Summer 2011

Fuel Consumption by Utilities 6 LNG (t)Crude Oil (kl) Apr-SepOct-DecApr-SepOct-Dec 2010(A)20,461,9879,803,2002,570,401520, (B)24,730,43612,990,7433,469,4573,577,299 B/A Heavy Oil (kl)Coal (t) Apr-SepOct-DecApr-SepOct-Dec 2010(A)3,277,3601,215,91624,656,67912,634, (B)3,969,9863,263,08422,808,59512,922,578 B/A (source) FEPC

Power Output in Dec (Source) METI

Three Challenges in Energy Policies 1.To establish imminent-, medium- and longer-tem energy strategies that reduce uncertainty for the private sector and increase confidence among a public. 2.To formulate a flexible and diverse energy utilization  Nuclear power (a role for baseload power)  Fossil fuels  Renewable energy 3.To use technological strength to contribute to the international community.  Climate change  Nuclear safety  Saving fossil fuels 8

Restart of Nuclear Power Plants 1.No-Nuclear scenario means;  Adverse effects on Japanese economy  Relinquishment of Japan’s critical roles in the establishment of global standards on nuclear safety, security, and nonproliferation 2.Actions towards Restart  Four Steps Stress tests by nuclear operators Approvals of Nuclear and Industrial Safety Agency(NISA) Consents of Nuclear Safety Commission. Approvals of local governments  Recent statements of PM Noda and Industry Minister Edano 9

Japan’s Domestic Annual PV Panel Shipments 10 (kW) (source) Japan Photovoltaic Energy Association

For the Successful Utilization of Renewable Energy 1.New Feed-in-Tariff as a booster (scheduled to start this summer)  Entails utilities’ obligation to purchase all electricity generated by renewable energy sources, with no limitation, at prices to be fixed by the government.  Surge in investments (ex. mega-solar, wind). Companies (Japanese, U.S., Canadian) and governments (central, local) 2.The success depends on various factors The criteria for approval of specified suppliers The requirements for interconnection (costs and sharing responsibilities in stable supply) The capacity of the grid etc. 11

Energy Sector Resiliency 12 1.Current structures of the Japan’s utility sector  10 utilities with a vertically integrated business model  The difference in frequency between eastern (50-hertz) and western Japan (60-hertz) 2.Needs to discuss new structures for greater efficiency and flexibility that would fully accommodate power generation from diversified sources and players  Ownership and participation in generation, transmission, and distribution business  Responsibilities for maintaining stable electricity supply  Costs of business developments etc.

Conclusion 1.Energy is the “blood” of national livelihood and corporate activities. Energy policy is one of the most important pillars of national strategy. 2.Three factors to shape future of Japan’s energy  Technology  Markets  Competition 13