Enigin Update - Japan needs to Plan for more Energy Efficiency and Renewables
BLOOMBERG New Energy Finance report that Japan should become a global leader in energy efficiency and renewable energy as it rebuilds its power infrastructure after the disaster in March.
The Fukushima nuclear reactor disaster and resultant energy crisis in Japan, opens the way for the country to embrace a fully rounded our energy plan. Bloomberg New Energy Finance’s report reveals that the country has more options available to them than just increasing its reliance on fossil-fuel power generation.
The earthquake and tsunami in March this year lead to Japan losing 20 percent of its nuclear power supply. Before the disaster Japan was planning to increase its energy capacity from 300TWh in 2010 to 447TWh by 2019 - plan which are now in tatters after what the country is still experiencing.
Previous to the March disaster, Japan’s commitment to cutting carbon emissions has been described as aggressive, with broad targets for energy efficiency and renewable energy, but in reality the country’s plans relied on new nuclear power plants to reduce emissions.
Last month Japan’s Prime Minister, Naoto Kan, announced that these plans were to be scrapped completely. Which is understandable in face of the Fukushima disaster, but it leaves the country dealing with more than a temporary power crisis, they now need to develop a whole new energy policy and pretty quickly.
Michael Liebreich, chief executive of Bloomberg New Energy Finance, stated: “Our analysts have put together a seven-point plan for Japan’s future energy strategy. We believe the plan would contribute to a reinvigoration of Japan’s economy, as well as allowing it to meet energy needs and hit its carbon emission targets."
The points are of interest to Enigin Distributors as they hit many points that they can fulfill for public and private sector organisations, with energy efficiency and renewable energy solutions and technology from Enigin.
Briefly, the seven points are:
1. Target world leadership in energy efficiency
Japan responded aggressively to the threat posed by last century’s oil shocks. As a result, by 1990 it was the world leader in several key clean energy technologies, including batteries, heat pumps, fuel cells, mass transportation and solar power. Since 2000 Japan’s leadership has been overtaken by Germany, Denmark, Spain, China, even in some cases the US.
Japan should now embark on a crash programme of energy efficiency, in industrial, commercial and residential applications. Creating large pools of demand for LEDs, building automation systems, smart grids and other efficiency technologies should be accompanied by programmes to support the supply side, so that Japanese companies can become export powerhouses to help fund the investment. In particular, technologies for “peak shaving” – shifting demand to eliminate the need to build new power stations – should be given the highest priority, and Japan should aim to be the first G20 country with universal connection to a truly smart grid.
2. Get hold of accurate cost data
It is absolutely vital that the authors of Japan’s new energy strategy base it on real current costs of clean energy solutions, and their likely evolution. It is not well-recognised that solar PV today is competitive with retail electricity prices in a number of markets, and will be competitive in a lot more by 2015. This year’s best new wind farms will be producing power at $68/MWh without subsidies, competitive with new coal plants, once the coal plants have to cover their capital costs and pay for proper pollution control. The old certainties of centralised power stations, baseload requirements, redundant grids, and high-cost renewables need to be set aside.
3. Pass a feed-in tariff
In Japan today, there is a need for speed. Restoring the country’s electricity supply is urgent. A feed-in tariff should be the policy-maker’s weapon of choice in giving momentum to a clean energy roll-out. Supported by a residential-scale PV buy-back programme and installation subsides, Japan’s annual installation doubled last year. However last year Germany installed 7.5GW of PV, against a bit shy of 1GW in Japan. There is a feed-in tariff bill already on the floor of the Diet (parliament); the bill covers, beyond residential-scale PV, biomass, small hydro, geothermal, commercial-scale PV and wind. Ideally, the bill would have a grandfather clause so it falls away in two years, and/or a cap on volume, or an auction for the rights to qualify for certain tariffs. But the overriding priority is for action, without delay.
4. Eliminate barriers to clean energy roll-out
Not nearly enough attention is paid to removing barriers to the quick roll-out of clean energy – reduce the risks, eliminate legislative and planning bottlenecks, create markets quickly through public sector procurement. The planning process in Japan is extremely tortuous, holding back the geothermal and wind sectors in particular. Now would be a good time to reform it. Wherever the costs of clean energy technologies are higher in Japan than elsewhere, wherever projects are harder to implement, find out why and bring together the stakeholders to sort out the problem. The huge potential of Japan’s geothermal sector, and the obstacles facing it, are examined in a Bloomberg New Energy Finance insight note published to clients on 2 June, entitled Could The Answer to Japan’s Energy Gap Lie Right Under Its Feet?
5. Restructure power markets
Despite much debate about liberalisation, Japan’s power markets are more rigid than in almost any other divided up into 10 regional near-monopolies. Given the extremity of the challenge, the priorities must be innovation, flexibility and rewards for problem-solving, but the system is biased towards protecting the status quo. In particular, with Tepco, one of the world’s largest privately-owned utilities with 24m customers, bearing massive liability and needing full support from the national government, now would be a good time to advance a broader reform agenda on energy. This would have knock-on effects on Japanese industrial and economic dynamism: think deregulation of supply, incentives to bring in new participants, net metering, funding support for use of new technologies, support for micro-grids and off-grid living, creative mechanisms to reward demand management and large volumes of local renewable power resources.
6. Start to rebuild trust in nuclear power
It will be hard to erase those images of Japanese toddlers being checked for radiation by masked inspectors. From an engineering standpoint, however, there is no reason why nuclear power cannot meet a significant and even growing part of Japan’s energy needs. The nuclear industry practically invented the science of risk management, and has at its disposal
, techniques to understand and manage risk with clinical thoroughness. What is required is a root-and-branch overhaul of the Japanese nuclear industry’s safety culture. Out must go the clubby atmosphere, the links with politicians, the tolerance for sloppiness, prevarication, incompetence and cover-ups. In must come independence, transparency, whistle-blowing, ruined careers and even prosecutions.
7. Fire up gas generation to bridge some of the gap
Inevitably, ramping up renewables and, especially, rebuilding trust in nuclear power will take years. In the short term, Japan needs quickly to increase its ability to import natural gas and increase gas-fired power capacity, beyond 2010’s figure of just over 60GW. From the point of view of its carbon emission targets, additional gas-fired generation makes more sense for Japan as a stop-gap than increased coal- or oil-fired output.
Picture: Fukushima #3 Black Smoke by Daveeza
