1. © 2007 Governance Design Laboratory. All right reserved. 2007 Asian Energy Security Project Japan Energy Update & LEAP Japan Model 2007 AES Japan team (Kae Takase, Tatsujiro Suzuki, Tadahiro Katsuta)

2. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Japan Energy Update

3. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Recent trends in Japanese energy, GDP, and CO2 ■GDP and primary energy is growing steadily. ■CO2 emission is not increasing as much as primary energy. ■Ratio of TPS/TFC is raising due to higher electricity share in final energy demand. Trillion yen (2000 price), Mtoe, Mt-C Primary energy GDP CO2 Final energy

4. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Energy and Economy ■GDP is growing steadily. ■GDP Elasticity is lower than Oil Crisis period. ◆ Energy demand is not growing as GDP is. %/year65-7373-7979-9090-0000-05 GDP9.1%3.7%3.8%1.2%1.3% TPS10.9%1.1%1.5%1.4%0.3% Elasticity1.200.290.401.210.21 1 st Oil Crisis 2 nd Oil Crisis Bubble Economy collapsed Source: Handbook of Energy & Economic Statistics in Japan ‘07, EDMC/IEEJ

5. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Primary Energy Supply ■Oil  Coal, Gas, and Nuclear

6. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. GHG emission of Japan ■Japan needs 8+6=14% reduction of 1990 GHG emission from 2005. Source: Greenhouse Gas Inventory Office of Japan

7. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. To meet Kyoto target ■BAU seems to be greater than government expects. Current policy is not enough (comment by new prime minister). Source: Greenhouse Gas Inventory Office of Japan

8. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Major policy measures ■More nuclear power ■ “ Voluntary Action Plan ” by Keidanren ◆ Keidanren: Japan Federation of Economic Organizations ■Enhanced application of energy saving law (more appliances) ■National announcements to arouse people to reduce emission from daily life ■(No Emission Trading and Environmental Tax – under discussion)  Lack of an effective measure

9. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Japan ETS (Our analysis) ■Research with Kyoto Univ. and WWF Japan. ■Suggests ETS implementation in Japan ■Result of the model analysis by GDL ◆ 2-3% increase in electricity prices ◆ 0.3% increase in wholesale prices ◆ “ Green technologies ” will be activated, and result in economic growth by 2015.

10. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Nuclear ■Now, 55 plants (49.58GWe) are in operation ◆ 1/3 of electricity, 12% of primary energy ■By 2020, 67 plants (66.45GWe) are planned ◆ +13 plants, - 1 plant ■Keep 30 ～ 40 % of electricity ◆ Prolong operation from 40 years to 60 years ◆ Existing LWR  New LWR  FBR ●FBR: fast-breeder [fast-breeding] reactor

11. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. “ Nuclear Nation ” Plan (2006.8) Source: ”Nuclear Nation Plan” (2006.8) New LWRs prolonged operation of existing LWRs (60 years) existing LWRs (40 years) FBR Capacity 10MWe Fiscal Year Long term plan for nuclear power

12. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Under operation 55 Under construction 2 Planned 11 Hamaoka(5) Onagawa(3) Fukushima Ⅰ (6)(2) Fukushima Ⅱ (4) Higashidori Ⅰ (1)(1) Shika(2) Kashiwazaki-kariwa(7) Tsuruga(2)(2) Mihama(3) Genkai(4) Shimane(2)(1) Ikata(3) Sendai(2) Tomari(2)(1) Takahama(4) Ohi(4) Tokai(1) Kaminoseki(2) Ohma(1) Higashidori Ⅱ (2) Namiekodaka(1) PWR BWR

13. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. List of nuclear power under operation

14. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. List of under construction, and planned 10MW Start construction Start operationType of plant Tomari-391.22003.112009.12PWR Shimane-3137.32005.122011.12ABWR Ohma138.3(2007.8)2012.3ABWR Higashidori-1 (tepco) 138.52008.112014.10ABWR Fukushima Ⅰ -7 1382009.42013.10ABWR Fukushima Ⅰ -8 1382009.42014.10ABWR Kaminoseki-1137.32009fy2014fyABWR Tsuruga-3153.82010.102016.3APWR Tsuruga-4153.82010.102017.3APWR Higashidori-2 (tepco) 138.5 2011 fy ～ 2017 fy ～ ABWR Kaminoseki-2137.32012 fy 2017fyABWR Namiekodaka82.52013fy2018fyBWR Higashidori-2 (tohoku) 138.5 2013 fy ～ 2018 fy ～ ABWR

15. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Japan LEAP Model 2007

16. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Last study ■BAU: follows IEEJ2002 ■National Alternative: ◆ less nuclear, more renewables and energy efficient technologies ■Regional Alternative: North East Asian regional cooperation ◆ Pipeline oil and gas import, electricity import ◆ Oil Refining on Commission with China ◆ Regional Cooperation in Nuclear (Funding) ◆ Cooperation in Energy Efficiency and Renewables (Funding  early implementation of technologies)

17. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Regional Alternative (1) ■Pipeline Oil Import from Siberia ◆ 1 million bbl/day, from 2010, $1.5/bbl higher price ■Pipeline Gas Import from Sakhalin ◆ 6 million ton from 2015, price is set $3/GJ in 2005 (rise at the rate of crude oil price) ■Electricity import from Sakhalin ◆ 2GW from 2012, 4GW from 2014, 5 USC/kWh (fueled by natural gas)

18. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Regional Alternative (2) ■Oil Refining on Commission with China ◆ 10,000 bbl/day in 2004, increase to 60,000 bbl/day in 2010, remain same until 2015, finish in 2016 ◆ Commission fee is set $3/bbl ■Regional Cooperation in Nuclear ◆ Funds ●Nuclear Research: 8 million USD from 2007 to 2015, raise to 100 million USD until 2025, raise to 300 million USD by 2030 ●Waste Agreement: 8 million USD from 2006 to 2015, 25 million USD from 2016 to 2030 ■Cooperation in Energy Efficiency and Renewables ◆ Funds ●Energy Efficiency: cost $1/HH since 2006 (approx. 50 million USD/year), Renewables: cost 50 million USD/year to Elec. Gen. ◆ Effect ●2 years earlier implementation of technologies in energy efficiency and renewables ●Cost reduction by 10%

19. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Result: Final Energy Consumption ■Less demand in NA and RA by efficient technologies. * National Alternative and Regional Alternative shows reduction in Final Energy Consumption due to implementation of energy saving technologies. Unit: million GJ

20. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Difference with BAU (primary) Unit: million GJ ■Less nuclear and fossil fuel, more renewables.

21. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Scenario for AES 2007 Max National plan with 60 years operation BAU National plan with 40 years operation Min Only 2 plants under construction, 40 years op. Succeed (Plutonium small) Fail (Plutonium accumulates) Nuclear power FBR & Pulthermal Fossil fuel? Renewables? Efficient technologies?

22. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Scenarios for nuclear power ■Nuclear MAX(60years), BAU(40 years), and MIN(40 years, but only under construction). 66.45 GWe 56.77 GWe 50.70 GWe New LWR?

23. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Reprocessing and FBR&pulthermal ■Reprocessing plant ◆ Rokkasho can reprocess 800ton/year. ■FBR ◆ National plan is to start commercial operation around 2050. ■Pulthermal ◆ 16 ～ 18 plants by 2010

24. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Pulthermal Onagawa(1) Tokai Ⅱ Hamaoka-4 Tomari(1) Ohma Shika(1) Tsuruga(1) Ohi(1-2) Shimane-2 Genkai-3 Ikata-3 *TEPCO intends to use MOX fuel at 3 or 4 plants.

25. Governance Design Laboratory © 2007 Governance Design Laboratory. All right reserved. Steps ■Update current accounts ■Set up scenarios ■Run LEAP model and calculate energy supply and demand, CO2 emission, and needs for fossil fuels in each scenario. ■Calculate Plutonium accumulation and HLW&LLW. (outside the LEAP model)