[jfs] Shaping Japan's Energy toward 2050

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Japan for Sustainability Newsletter #189
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May 31, 2018

Copyright (c) 2018, Japan for Sustainability

Japan for Sustainability (JFS) is a non-profit communication platform to
disseminate environmental information from Japan to the world, with the
aim of helping both move onto a sustainable path.

See what's new on our web site: http://www.japanfs.org/en/
E-mail: [email protected]

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In the May 2018 issue of the JFS Newsletter:

- 'Yumekaze' Wind Turbine Project Connects Metro Consumers and Regional
Producers: Seikatsu Club Consumers' Co-operative

- Shaping Japan's Energy toward 2050
Participating in the Round Table for Studying Energy Situations

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'Yumekaze' Wind Turbine Project Connects Metro Consumers and Regional
Producers: Seikatsu Club Consumers' Co-operative

The Seikatsu Club Consumers' Co-operative Union (Seikatsu Club) is a
joint association of 32 co-ops throughout Japan. Based on the idea that
consumers themselves should purchase the food they need to live, the
club has been making collective purchases for more than 50 years through
affiliations with trusted producers across Japan. Its efforts to purchase
secure and safe products are now expanding to businesses that respond to
various social challenges, including building livable communities and
energy problems.

JFS Newsletter No. 179 (July 2017)
Seikatsu Club: Japanese Cooperative Managed by Members' Will to Confront
Social Problems
https://www.japanfs.org/en/news/archives/news_id035882.html

Electricity and energy are as indispensable to our lives as food.
However, unfortunately it is difficult to be energy self-sufficient
within our own local living environment. To tackle this challenge, the
Seikatsu Club is building region-to-region relationships related to
energy, using its 50 years of experience linking producers and consumers.

Aiming to supply and sell its own electricity rather than leaving it up
to the national government or power companies, several Seikatsu Club
co-ops invested funds to establish the Seikatsu Club Energy Co. in 2014.
It purchases electricity from 46 renewable energy power stations in
Japan to sell mostly renewable energy to approximately 10,000 households
and businesses nationwide.

This issue of the JFS Newsletter introduces the "Yumekaze" Seikatsu Club
Wind Turbine built in Nikaho City, Akita Prefecture (northern Japan),
focusing mainly on how it connects urban areas and the countryside, as
well as production and consumption. This project was the starting point
of the Seikatsu Club's activities in the energy sector. ("Yumekaze"
literally means "dream wind.")

Yumekaze was built in March 2012 in Nikaho as a joint venture of four
co-ops operated by the Seikatsu Club in the Tokyo metropolitan area
(Tokyo, Kanagawa, Chiba and Saitama). This wind project is operated by
the Green Fund Akita, a general incorporated association that functions
as the business entity, while the four co-ops invest and lend funds and
are involved in planning and operations.

Yumekaze is a large wind turbine with an output of 1,990 kilowatts,
generating 4.9 million kilowatt-hours of electricity annually, all of
which is sold to Seikatsu Club Energy Co.

A Little Different from Other Wind Projects

Since it was the first energy project for the Seikatsu Club, many
discussions and suggestions were made among members as to what kind
of relationship the club should build with Nikaho. Some members said
"Our relationship should not be 'invisible,' with electricity generated
locally just transmitted through power lines and used far away in the
metropolitan area. We should build an active relationship that also
benefits locals for hosting wind turbines and renewable energy." Such
comments triggered exchanges between Nikaho residents and co-op
members in the metropolitan area.

To mark the first anniversary of the wind turbine's operation, Nikaho
locals and co-op members from the Tokyo area celebrated together
at a barbecue party. Now the club, in cooperation with Nikaho City, runs
regular tours for members. In addition to visiting the turbine, the tour
participants can also enjoy activities like trekking in the rich nature
around the city and making soba (buckwheat) noodles. Recently college
students from the metropolitan area learned about the project and
activities of the Seikatsu Club and Nikaho, also started to visit the
city. In this way, the circle of exchange between people in the urban
and rural areas is expanding.

Thanks to these exchange activities, the Seikatsu Club's unit is now
seen as "a wind turbine with faces" for the locals of Nikaho, which
means that the locals know the actual faces of people who are buying the
power generated by the turbine. Nikaho faces the Sea of Japan, which
makes it a prime location for wind power. There are dozens of wind
turbines within the city's boundaries today owned by other entities ,
but Yumekaze appears to be the locals' favorite, as Seikatsu Club
members often hear comments like "The Seikatsu Club's turbine reminds
me of the faces of the co-operative members," and "I get worried if I
see the Club's turbine not turning." Disaster prevention agreements and
various other future projects are being discussed to further deepen
exchanges and cooperation.

Adults are not the only ones who feel an affinity to Yumekaze. The
turbine is used as a learning tool to study the topic of energy at
elementary schools in the city. The turbine provides a venue for
students to learn about the environment and energy as they can actually
observe how the turbine operates not only from the outside but also from
the inside.

The turbine's name was decided through a naming competition. A call was
put out to elementary school students, parents and guardians, classes in
local schools and groups active in Nikaho, resulting in 270 entries.
From a shortlist of ten names selected by the Nikaho City Municipal
Board of Education, about 1,800 co-operative members voted to select
"Yumekaze" as the winner.

In a way, the name embraces hopes of the both the Nikaho locals and
co-operative members in the distant Tokyo metropolitan area, and perhaps
that is why many feel a close connection with the turbine.

Joint Development of Yumekaze Brand Products

The relationship between the Seikatsu Club and Nikaho has been growing
more than ever. The Seikatsu Club purchases farm products grown in
Nikaho, such as tomatoes for processing, and soy beans, as ingredients
for its original consumer products. In addition, a part of the profits
from sales of the turbine's electricity is allocated to the processing
of local farm products. They have jointly developed branded products
since 2015.

Four Seikatsu Clubs in the Tokyo metropolitan area, in partnership with
food processors and a sake brewery in Nikaho, have jointly developed
products using local specialty products under Yumekaze brand. In fiscal
2016, the following products were produced and sold to co-operative
members: Yumekaze Junmai Daiginjo (a top-quality sake) by Seikatsu Club
Kanagawa; Taramen codfish fermented sauce-based ramen (Chinese noodles),
by Seikatsu Club Tokyo; Tara Shottsuru codfish fermented sauce by
Seikatsu Club Chiba; Beppin-san Ichijiku fig compote by Seikatsu Club
Saitama.

Housewives and other co-operative members from the Tokyo metropolitan
area participate in the joint development of the Yumekaze brand products.
They go back and forth to Nikaho to develop products through trial and
error over almost half a year. This is a great opportunity for Nikaho's
local companies to hear directly from metropolitan consumers and develop
new business opportunities.

The renewable energy situation in Japan has changed significantly since
the Fukushima nuclear accidents in 2011, the introduction of the
feed-in-tariff (FIT) system for renewable energy in 2012, and the
liberalization of electricity power sales in 2016. The introduction of
the FIT system encouraged an increasing number of communities to promote
renewable energy. The liberalization of power sales enabled buyers to
purchase electricity from new power companies focusing on renewable
energy. Consumers in Japan can now choose their electricity based on
where and how it is generated.

A key feature of the joint efforts by the Seikatsu Club and Nikaho City
is connecting metropolitan and regional communities through two
essential ingredients of modern life: "energy" and "food." Today, we
live in a society where consumers cannot usually see where their food
and electricity come from, while producers cannot see who consumes their
products. In this context, their joint efforts, which enable consumers
and producers to know each other, are more important than ever.

Written by Yuka Kume

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Shaping Japan's Energy toward 2050
Participating in the Round Table for Studying Energy Situations
https://www.japanfs.org/en/news/archives/news_id036082.html

Japan's Basic Energy Plan

Japan's Basic Act on Energy Policy directs the government to draft a
Basic (or, recently, "Strategic") Energy Plan and review it once every
three years.

The Basic Energy Plan of 2010 stated that to boost the zero-emissions
power supply (nuclear + renewable energy) to a 70% ratio, 14 or more
additional reactors would need to be built, increasing the utilization
rate of nuclear power plants and deploying renewable energy to the
maximum extent possible.

After the 2011 Tohoku earthquake and tsunami on March 11, 2011 and the
subsequent accident at Tokyo Electric Power Company's Fukushima Daiichi
Nuclear Power Plant, the Basic Energy Plan of 2014 positioned nuclear
power as "an important base-load power source," stating that dependency
on nuclear power generation would be lowered to the extent possible by
efforts to save energy and introduce renewable energy as well as by
improving the efficiency of thermal power generation, etc., while
proceeding with the restart of the nuclear power plants.

Renewable energy was rated as facing "various challenges" in terms of
stable supply and costs at that moment, but as a promising,
multi-characteristic, important energy source that could contribute to
energy security as it can be domestically produced and is free of
greenhouse gas emissions.

Based on the Strategic Energy Plan, the Long-term Energy Supply and
Demand Outlook compiled in July 2015, stated that the electric power
supply-demand structure in fiscal 2030 would be as follows: renewable
energy approximately 22 to 24%, LNG 27%, coal 26% and oil 3%, reducing
dependence on nuclear power plants, which had been about 30% before the
2011 Tohoku earthquake and tsunami, to around 20 to 22%.

In response to subsequent changes in circumstances, the Strategic Policy
Committee of the Advisory Committee for Natural Resources and Energy
began meeting in early August 2017 to discuss the next Strategic Energy
Plan.

Establishing a New 'Round Table for Studying Energy Situations'

Beyond the nation's Strategic Energy Plan toward fiscal 2030, we need
further study and initiation of a discussion about the future. With a
mission of determining the future direction of long-term energy policies
based on energy-related forecasts for 2050 in response to the Paris
Agreement, the Round Table for Studying Energy Situations (hereafter,
the Round Table) was established by the Minister of Economy, Trade and
Industry. As a member of the Round Table, I would like to tell you about
the discussions we had there and the final proposals of the Round Table.

The website of Japan's Agency for Natural Resources and Energy describes
the role and status of the Round Table as follows:
http://www.meti.go.jp/english/press/2017/0801_001.html

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"... under the Plan for Global Warming Countermeasures based on the
Paris Agreement, Japan decided to aim at achieving an 80% reduction in
existing greenhouse gas emissions by 2050 as a long-term goal. Japan
should achieve this goal under the fair and effective international
frameworks for the agreement in which all major countries participate,
while leading the globe in encouraging major greenhouse gas emitting
countries to engage in reduction efforts and balancing global warming
countermeasures, taking into account both their technical capabilities
and the need for economic growth.

Such an ambitious goal may be difficult to achieve if we only continue
current efforts. To overcome this challenge, Japan needs to achieve
technological innovations and reduce emissions totals through
international contributions. To this end, METI will newly establish a
Round Table for Studying Energy Situations under the leadership of the
METI Minister, aiming to bring together a wide variety of ideas and
provide experts with the opportunity to hold discussions based on the
widest range of possible solutions."
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Awareness that the goals set under the Paris Agreement could not be
achieved by continuing current energy policy and conventional
discussions led to establishment of the Round Table. Nuclear energy
policy is one option toward this end, and the Round Table was
established not for questioning the existence of nuclear power plants,
but as a place to discuss Japan's energy policy from various
perspectives for achieving "an 80-percent reduction target of GHGs in
2050" -- which is extremely high.

The Round Table has a total of eight members: Masami Iijima of Mitsui &
Co., Ltd.; Makoto Gonokami, President of The University of Tokyo;
Masahiro Sakane, Councilor of Komatsu, Ltd.; Takashi Shiraishi,
President of the Institute of Developing Economies, Japan External Trade
Organization; Hiroaki Nakanishi, Executive Chairman of Hitachi, Ltd.;
Yoichi Funabashi, Co-founder and Chairman of Asia Pacific Initiative;
Naoko Yamazaki, Astronaut; and myself, Junko Edahiro.

I joined the Round Table discussions with three perspectives: the
environment, local communities and citizens. In particular, there had
not been much focus on "local communities" thus far in the Basic Energy
Plans and energy policies. In previous energy policies, how to import
fossil fuels, including oil, in a stable manner from abroad had been
given much attention. In Japan, however, where the population is
decreasing and society is aging, how to meet local energy demands will
be increasingly important from now on.

I couldn't believe that in 2050, large-scale power plants would be able
to deliver power to households in all corners of Japan with long distribution
lines. I expected each local community to be more resilient, with a
local system that used locally generated power flexibly, eliminating
transmission losses. I hoped for there to be highly resilient communities,
where even if energy imports were to stop due to international events,
it wouldn't cause havoc in people's lives or the economy.

Little attention, however, has been paid to technology or legal frameworks
for communities aiming for energy independence. The first discussion
agenda proposed by the Round Table secretariat lacked the perspective of
"local communities."

Deliberations of the Round Table for Studying Energy Situations

The first meeting was an introduction and briefing from the secretariat.
After that, at the second to seventh meetings, we spent two and a half
hours each time hearing from guest speakers, mainly from overseas, who
imparted knowledge important to considering energy in 2050. The four
main themes were "trends in geopolitical risks concerning energy"
(second meeting), "climate change countermeasures and energy policy"
(third and sixth meetings), "energy companies' management strategies"
(fourth and fifth meetings), and "technology and innovations" (sixth and
seventh meetings). The guest speakers were as follows:

- Dr. Paul Stevens (Distinguished Fellow, the Royal Institute for
International Affairs, UK)
- Mr. Adam Siminski (Chair for Energy and Geopolitics, Center for
Strategic and International Studies, USA)

- Prof. Jim Skea (Professor of Sustainable Energy, Imperial College
London, UK)
- Mr. Michael Shellenberger (CEO of the NGO Environmental Progress, USA)
- Dr. Felix Chr. Matthes (Research Coordinator, Energy & Climate
Division, Oeko-Institut e.V., Germany)

- Mr. Matthias Bausenwein (General Manager for Asia Pacific, Orsted,
Denmark)
- Mr. Ralph L. Hunter, Jr. (Managing Director and Chief Operating
Officer, Exelon Nuclear Partners)
- Mr. Guy Outen (Executive Vice President, Royal Dutch Shell, UK)
- Mr. Didier Holleaux (Executive Vice-President, ENGIE, France)
- Ms. Marianne Laigneau (Senior Executive Vice President, EDF, France)

- Mr. Takeshi Uchiyamada (Chairman, Toyota Motor Corporation, Japan)
- Mr. Richard Bolt (Secretary, Department of Economic Development, Jobs,
Transport and Resources, State Government of Victoria, Australia)
- Dr. Arun Majumdar (Director, Precourt Institute for Energy, Stanford
University, USA)
- Mr. John L. Hopkins (Chairman and Chief Executive Officer of NuScale
Power, LLC., USA)

Content and Implications of the Recommendations

The eighth and ninth meetings featured discussions toward compiling the
final recommendations. The full version of the recommendations is
available at the following link, in Japanese.

"Recommendations by the Round Table for Studying Energy Situations ?
Initiatives for Energy Transitions"
http://www.enecho.meti.go.jp/committee/studygroup/ene_situation/pdf/report.pdf
(Full version, in Japanese only)
http://www.enecho.meti.go.jp/en/committee/studygroup/ene_situation/pdf/keypoints.pdf
(Key Points of the Recommendations, in English)

The introduction is only one page long, but it articulates the basis of
these recommendations and major orientations. It lists three particular
points on which the recommendations are based, as follows:

(1) The stance that the Fukushima Daiichi Accident is a starting point.
This is consistent and immutable.
(2) The essence of the evolving situation, which is "possibility and
uncertainty."
(3) A course toward energy self-sufficiency, an unvarying requirement in
which discontinuous energy transitions through technological
innovation will be indispensable.

The recommendations have been widely covered by various media, focusing
particularly on the explicit statements of "making renewable energy a
major power source" and "decreasing Japan's dependency on nuclear energy."
While every member of the Round Table agreed on renewable energy, there
were heated discussions over "decreasing Japan's dependency on nuclear
energy," between members from industry insisting, "This shouldn't be
included," and our side, who wanted to include it explicitly. In the end,
the statement remained in the recommendations with no changes.

In addition, the recommendations also include certain points that are
crucial from a mid- to long-term perspective. The following three points
have importance from my point of view.

First Point: Planning in Consideration of an Uncertain Future

The first important idea embedded in the recommendations is a
multiple-scenarios approach and scientific review mechanism.

As one of the three basic ideas previously described, an understanding
of uncertain, unpredictable energy situations is shared as a common
ground for developing energy policies.

As far as I can see, the existing energy policies have been developed
conventionally under the premise of fixed visions of "how our future
ought to be" or "our future has to be like this," upon which the public
administrations implement measures to fulfill their expectations.
However, after listening to the talks by the 14 guest speakers at the
Round Table, we had come to a shared understanding that "since the
future is uncertain, we face high risks if we proceed with the current
presuppositions."

Therefore, the recommendations state that Japan should develop a
mechanism to develop multiple scenarios instead of just one scenario,
conduct scientific reviews, and adjust goals and measures flexibly
according to changes in circumstances and advancement of technologies.

This is a crucial understanding and orientation. To achieve this, it
will be necessary to consider how to develop multiple scenarios, who is
to conduct scientific reviews as a mechanism and how to establish its
governance. These points will be on the agenda for future discussion and
development.

Second Point: Perspective of Locality

The second important point is that the recommendations feature the
perspective of locality prominently. I am pleased to see this as I have
strongly insisted on this point from the very first Round Table meeting.
In the document, this is referred to as "distributed energy systems."
The following is a quote from the recommendations, translated by JFS."

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Policies for Solving Issues with Efficient, Distributed Energy Systems

Pursuing downsizing and high efficiency of renewable power generation
facilities, technological innovations in batteries and fuel cell systems,
electrification of transportation systems, advancement of technologies
in digitalization and smart grids that enable demand and supply control
at a local level, and effective combinations of these technologies will
boost the feasibility of establishing efficient, stable, decarbonized,
demand-driven distributed energy systems with compactly integrated
systems of electricity, heat and transportation.

Railway companies, information technology companies, hospitals, bases
and other facilities have actively introduced in-house power generation
systems. From the standpoint of energy security, they have an interest
in distributed energy systems based on innovative technologies. These
players contribute to acceleration of energy independence at the local
level. From the viewpoints of both energy security and local communities,
leadership should be encouraged to develop economically efficient,
stable, distributed energy systems backed up with cutting-edge
technologies, and promote such technologies worldwide.
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Strengthening Emerging Energy Conversion Industries and Reconstructing
Energy Infrastructure

In the field of distributed energy systems, locally based companies with
ambitious entrepreneurship are expected to emerge as leaders. In this
situation, it will be necessary to have a group of globally developing
comprehensive energy providers, a group of locally based companies
responsible for creating distributed energy systems, and a business
environment to produce such companies. Also, a structure to accelerate
energy conversion and decarbonization should be established, utilizing
the advantages of both types of companies. In this process, it will be
necessary to accelerate the updating of energy infrastructure by using
power grids designed for the next generation, developing distributed
networks, and so on.
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Third Point: The Times Have Changed from Single Power Sources to
Flexible Totally-Controlled Power Sources

The third important point is that we are not in an age of choosing power
sources based on cost anymore, that is, based on whether renewable
energy is expensive or nuclear energy is less expensive.

Until recently, ten power utility giants dominated the market from power
generation to energy supply to industries and households in Japan. There
used to be a limited number of power producers and countless consumers.

The electricity market structure is changing significantly these days.
New power companies have emerged. In-house power generation at companies
and homes is also increasing. The situation has become one of countless
electricity producers with countless consumers.

Selling generated electricity and purchasing the necessary volume is
like pouring electricity into a "big electricity pool" and taking out
electricity from the pool. The electricity being poured into the pool
originates from different sources, including renewable energy, thermal
power and nuclear power. Ultimately, the total volume in the pool should
match the volume of demand at the time.

For consumers, it is not a matter of choosing a single electricity
source anymore such as renewable energy stored in batteries or nuclear
power. In short, this is the idea of complementing power with other
power sources to stabilize the electricity supply.

With the advancement of information technologies, the Internet of Things
and digitalization, we will be able to link every power source and
control the output to accommodate fluctuating demand. In addition,
demand-side management to control power demand to match the supply will
be integrated with supply control. By using surplus electricity to
produce hydrogen and methane for use as fuels and storing them to be
used when needed, energy storage will be possible. This is available now
only with expensive batteries and pumped hydro. All of these technologies
will increase the flexibility of whole energy systems. There is fierce
competition in related technological development worldwide to bring
forth the next competitively advantageous energy source.

In the prospects for future energy systems stated above, we need to
consider the cost of controlling the whole energy system to regulate
individual sources, including costs for network operations and
development of hydrogen, methane and other forms of storage in the
future, in addition to the costs of the energy sources. This point has
been added to the recommendations as "a shift from cost estimation by
source to cost-risk analysis within energy systems for decarbonization."

The above are the "three key points" from my point of view in the
Recommendations by the Round Table for Studying Energy Situations.

In Conclusion

Having received the Round Table's recommendations, the Strategic Policy
Committee, which was in charge of determining the next Strategic Energy
Plan, undertook a review of the existing Strategic Energy Plan with a
perspective toward 2050. On May 18, the committee finished arranging the
draft of Strategic Energy Plan 2018, which will be finalized by cabinet
approval.

I appreciate that my participation in all meetings of the Round Table
taught me many things and gave me an important chance to get a direct
feel of the dynamic, rapid changes in the global energy situation. I am
also happy that I could succeed in adding the local viewpoint in the
proposals, as I've been involved with activities to recreate local
communities across Japan for many years. At the meeting, I proposed
several effective methods for implementing discussions such as
scenario-planning and public consensus building through dialogue, which
could be useful for further discussions on energy.

Finally, let me tell you about a small contribution I made: a change in
the seating style at the meeting. Governmental committee meetings in
Japan usually have participants seated in rows, with the governmental
officers sitting on one side of a long rectangular table in a row and
the committee members sitting on the other side of the table in a row.
That makes it hard to see the other members' faces. At the end of the
first meeting, I requested a change in the seating style, saying "We
can't talk without seeing each others' faces. Could you change the
layout of chairs and tables so that we can all see each other?"

At the second meeting and subsequently, the tables and chairs were
placed in a circle. I believe it helped the participants -- members,
guest speakers and officers -- by creating a good atmosphere for
discussions. The "learning organization" concept embraces the idea that
the quality of the atmosphere for communication at a meeting effectively
determines the quality of the relationships within the meeting. In
essence, a better atmosphere at a meeting improves the quality of the
relationships therein, which in turn increases the quality of thinking,
resulting in better actions and outcomes. Thus I believe this change in
the seating style contributed to more meaningful discussions and better
results.

Written by Junko Edahiro

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What do you think about these important points to keep in mind when
considering long-term energy policies?
Please share your ideas and leave comments!
https://www.japanfs.org/en/news/archives/news_id036082.html#comment

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[JFS Web Site Additions of the Month]

- This month's cartoon:
"This is a very famous object - now, does anyone know
the meaning of this character combination?" (2018/05/09)
https://www.japanfs.org/en/manga/manga_id036069.html

- JFS Newsletter No.188 (April 2018)

'Good Companies in Japan' (Article No.3): Seeking Ways to
Develop Societal Contribution along with Core Businesses(2018/05/16)
https://www.japanfs.org/en/news/archives/news_id036062.html
'What Are the Roles of Zoos Today?'
- Interview with Director of the Popular Asahiyama Zoo(2018/04/27)
https://www.japanfs.org/en/news/archives/news_id036058.html
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