Japan’s Economic Security (1): Energy
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Japan’s Economic Security (1): Energy

Japan’s Economic Security (1): Energy

Japan, with very limited natural resources, has always been acutely aware of its import requirements and energy security. The disaster of the Great East Japan Earthquake of 2011 was the first event which dramatically affected Japan’s self-sufficiency. The pandemic is a second major shock to the system. The issue of self-sufficiency has now been extended to a broader focus on “economic security”.

The 5th Basic Energy Plan, a review completed in 2018, updated the previous review of 2016 and coexists with the Government’s current long term plan to 2030 (last prepared in 2015). According to the 2018 review, “energy self-sufficiency in FY2013 had fallen greatly after the Great East Japan Earthquake to 6% but it is expected to reach 24% in FY2030 through the promotion of the introduction of renewable energy and the restarting of nuclear power plants”.

Supply

The accompanying table shows that Japan’s fossil-fuel based energy represents 86% of domestic supply in 2018-19. As a result of the 2011 Great East Japan Earthquake and the need to replace the losses from nuclear power generation, this figure peaked at 92% in 2012, but has been declining ever since. In the last 5 years, there has been a 12% decrease over 2013 figures. Nuclear energy supply in 2010, before the disaster, contributed 11.2% of Japan’s total supply.

Created from data source: April-2020 announcement: Japan’s Ministry of Economy, Trade and Industry confirmed data for 2018-19. Note:
1. Japan Fiscal Year (Apr-Mar).
2. Unutilised energy includes that which is generated from waste etc.

Consumption

The 2018 review showed “that the breakdown of the final energy consumption as of FY2016 (about 340 million kl) is about 90 million kl for electric power, about 80 million kl for transportation, and about 180 million kl for heat.”

The accompanying table shows overall energy consumption by sector.
Although not shown here, whilst the percentage share of the various sectors has remained remarkably stable over the period 2010-18, the overall total consumption has declined by 6.8% for 2018 as compared with the same figure in 2013, 5 years ago. Interestingly the largest decline, 10.3% was recorded for the household sector.

Created from data source: April-2020 announcement: Japan’s Ministry of Economy, Trade and Industry confirmed data for 2018-19. Note: Japan Fiscal Year (Apr-Mar).

Power Generation – Electricity

The following table shows the share of electricity generation by energy source. LNG accounts for the largest share at 38%, followed by coal at 32%. Interestingly, nuclear power represented as much as 25% before the Great East Japan Earthquake of 2011. This curtailed all nuclear power stations in Japan. With very limited re-openings nuclear power now stands at just 6%.

Created from data source: April-2020 announcement: Japan’s Ministry of Economy, Trade and Industry confirmed data for 2018-19. Note: Japan Fiscal Year (Apr-Mar).

The Government’s current long term plan (released in 2015) is for electricity generation using coal to drop from the current 32% to between 22-26% by 2030. This July, Japan’s METI Minister, Hiroshi Kajiyama indicated that the Government might encourage low-efficiency (that is high CO2 producing) coal fired power-stations to be phased out by 2030. Nevertheless, Japan’s demand for steaming coal – used in the production of electricity – will still be substantial on current expectations. Demand for the other main type of coal – coking coal -– is governed by the output requirement for steel manufacture where this coal type is a requirement.

Self sufficiency

Japan’s energy self-sufficiency rate, calculated at an International Energy Agency basis, peaked at 20.4% in 2009 before plunging to 6.7% in 2012 as a result of the Great East Japan Earthquake. With the return of a very limited number of nuclear power stations and an increase in renewables, the self-sufficiency rate by 2018-19 has risen to 11.8%.

Japan’s economy during the 1960s and its miracle growth period was heavily dependent on oil. In fact, in 1973 its energy dependency on this fuel source peaked at 75.5%. However, the oil crisis in that year triggered by an embargo of oil exporting countries, resulted in Japan gradually seeking to diversify the source of its energy and oil imports. In 2018-19 Japan’s dependency on oil recorded 37.6%.

Coming up: Japan’s Economic Security (2): Supply Chain Disruption