1. International comparison based on a quantitative evaluation of energy security
(a) What is energy security?
‘Energy security’ means being able to secure energy in the quantity necessary for people’s lives, economic and social activities, and national defense, etc., at affordable prices. Boosting energy self-sufficiency and reducing the risks that could threaten energy security are basic to enhancing energy security.
(b) Reasoning behind the quantitative evaluation
Premised on the energy supply chain below, we selected a number of key indices—for example, energy self-sufficiency for domestic and semi-domestic energy source development and utilization, and the diversification of energy sources and source countries for the procurement of offshore energy resources—and subjected these to a diachronic analysis as the basis of our international comparison.
(c) What is Japan’s policy perspective on enhancing energy security?
The current state of Japan’s energy security revealed through the above quantitative evaluation maps out on a radar chart as follows. As the red arrows show, resource-poor Japan needs to secure the necessary amount of energy and to strengthen its resilience to the risk of supply and demand situation tightening in response to mounting resource prices, rising resource nationalism and the swift expansion of demand in the newly-emerging economies. Meeting these imperatives will require the following policy perspectives.
(i) Boosting Japan’s independently-developed energy ratio, including promoting independent upstream development
Japan needs to improve its primary energy self-sufficiency rate by developing domestic resources, including energy sources other than fossil fuels, and to boost its ratio of independently-developed energy, including offshore energy development interests. The amount of oil imported from oil-supplying countries in which Japan does not have oil development interests has declined since the first oil crisis and the Gulf War, while imports from oil-supplying countries in which Japan does have oil development interests have increased, suggesting that boosting the independently-developed energy ratio helps to enhance energy security.
(ii) Supporting risk money provision to secure the interests of Japanese companies
Japan has no choice but to depend on offshore procurement to secure the necessary amount of energy resources. Risk needs to be diversified by diversifying energy sources and the countries from which energy resources are imported. The latter in turn requires consideration of the respective country risks. Often when the countries from which Japan imports oil are diversified by means of acquiring independent upstream development interests, these interests are in places with comparatively high country risks that oil development firms cannot shoulder alone. The Japanese government therefore needs to provide support for risk money provision to promote risk taking underpinned by trade insurance and the development of appropriate risk management systems.
(iii) Reducing choke point risk and establishing stockpiles
Japan’s high dependence on offshore energy resources makes it impossible to completely avoid choke point risk. We therefore need to pursue international cooperation toward securing the safety of sea lanes, as well as steadily building domestic stockpiles of oil and natural gas in case of supply disruptions caused by sea lane blockade emergencies or energy resource supply delays.
2. Trends in the introduction of renewable energies and efforts to expand this
Since the second oil shock in the 1970s, there has been an ongoing shift from oil to oil alternatives, decreasing Japan’s oil dependence. However, our dependence on fossil fuels, coal and natural gas included, remains high at over 80 percent. Accordingly, Japan urgently needs to promote the introduction of non-oil energies such as nuclear power and renewable energies to diversify energy sources, ensure efficiency and contribute to combating global warming.
(a) Growing international interest in renewable energies
Renewable energies are accounting for a growing share of total world primary energy supply. With fossil fuel prices shooting up in response to the swift rise in energy demand in China, India and elsewhere and intensifying competition for energy resources, demand for renewable energies is expected to expand because of their relative immunity to these factors.
(i) Investment trends
Since around 2005 when fossil fuel prices spiked, investment in renewable energies has continued to expand. This has been spurred by active government spending aimed at creating jobs and fostering industries, while private sector capital input is also growing.
(ii) International trends
Solar power, solar heating, wind power and other forms of renewable energy are now being aggressively deployed in the advanced economies. By region, the U.S. and Europe have seen vigorous investment in recent years, indicative of the growing interest in renewable energies. Japanese firms too are exploiting their advantage in terms of technological capacity to establish joint ventures and engage in business operations. There has also been a rise in cases of power companies, trading companies and manufacturers participating in offshore power generation.
Examples of business operations deployed by Japanese firms：(PDF:88KB)
(b) Trends in renewable energy introduction
Japan is making progress with the introduction of renewable energy and compares well with the other developed economies in terms of both current and forecast ratios. However, the introduction of renewable energies always presents challenges in terms of output instability, high costs and location constraints, and the government will need to design measures toward further introduction with an eye to these realities.
The form of and potential for renewable energy introduction also varies greatly across the developed economies in accordance with, for example, their respective geographies and climates, available resources and the state of utilization of these, and their socioeconomic scale. The introduction of renewable energies therefore needs to be pursued on the basis of these conditions and the particular features of renewable energies.
The two main types of measures pursued by the developed economies to promote renewable energy introduction are:
(i) RPS systems
Quantity-based regulations that set a renewable energy utilization floor for power companies
Price-based regulations that require power companies to purchase renewable energy at a certain price
The International Energy Agency (IEA) has suggested that RPS systems are suited to technologies which have much the same price as existing technologies, while subsidies and feed-in tariffs are suited to technologies such as solar power generation that are much more expensive than existing power sources.
(c) Development of new policies to promote further introduction of renewable energies in Japan
In terms of institutional measures to encourage major progress in the introduction of renewable energies, regulations, support and other effective measures need to be developed in accordance with the characteristics of the particular energy source, observing the following perspectives:
(i) Establishment of a feed-in tariff system suited to Japan’s circumstances
The fifth meeting of the Project Team on Renewable Energy Total Buyback, held in July this year, determined a specific image for a total buyback scheme. Details of the system will now be worked out based on that image.
(ii) Building a next-generation smart energy social system
The creation of measures tailored to an electricity system in response to the expanded introduction of renewable energy, as well as the development of demand-side energy management
(iii) Mitigating constraints imposed by geographical conditions, etc.
Solving institutional and social challenges through, for example, the expanded introduction of wind power generation in nature parks
As seen above, this year’s Energy White Paper comprises valuable studies and analyses providing a foundation on which to form the direction of Japan’s future resource and energy policy. We hope the report will deepen understanding of Japan’s current energy situation and the direction of our future energy policy.
（original article : Japanese）
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