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Assessment of long-term low-emission pathways in Japan using AIM/Enduse [Japan] Ken Oshiro Mizuho Information & Research Institute The 22nd AIM International Workshop December 10, 2016 Ohyama Memorial Hall, NIES, Tsukuba, Japan 1


  1. Assessment of long-term low-emission pathways in Japan using AIM/Enduse [Japan] Ken Oshiro Mizuho Information & Research Institute The 22nd AIM International Workshop December 10, 2016 Ohyama Memorial Hall, NIES, Tsukuba, Japan 1

  2. Backgrounds and objectives • Japan submitted its INDC on July 2015, which is to reduce GHG emissions by 26.0% in 2030 below the 2013 level. • According to the Plan for Global Warming Countermeasures published on May 2016, Japan aims to reduce greenhouse gas emissions by 80% by 2050 as its long-term goal. • However, quantitative analysis regarding consistency between the 2030 and 2050 targets is not yet provided. • This study assess emissions pathways by 2050 considering both the 2030 target (NDC) and the 2050 target (long-term goal) using AIM/Enduse [Japan]. 2

  3. Overview of AIM/Enduse [Japan] • Bottom-up of end-use sectors, hard-linked with energy supply sectors • Recursive dynamic model • Minimizing total system costs; capital, O&M, and emission costs Primary Energy Supply Oil Coal Natural Gas Nuclear Hydro Parameters Results Solar Wind Geothermal Biomass Ocean CO 2 price GHG emissions Energy Conversion Technologies Energy prices Electricity dispatch module Energy conversion modules Carbon  Oil refinery  Heat generation Emission factors sequestration  Gas processing  Hydrogen  Coal upgrading generation Demand load curve Sectoral energy Technical/economic supply/demand Final Energy Consumption characteristics (Energy efficiency, Electricity Oil Coal Gas Heat Renewables Hydrogen Capital/O&M costs, Lifetime, etc.) Share of technologies End-use Technologies Energy/Climate Policies Industry Transport Residential/Commercial (Passenger, Freight)  Iron & Steel  Space heating / cooling  Paper & Pulp  Vehicles  Water heating Energy service Additional total  Petrochemical  Train  Cooking demand  Maritime system costs  Cement  Lighting  Aviation  Machinery, etc.  Appliances Non-energy  Industrial processes, Agriculture, Waste, etc. 3

  4. Examples of measures in AIM/Enduse [Japan] • Wide range of mitigation technologies are included. • Unlike the NDC, most of measures for energy conservation are excluded. (e.g. behavioral change, modal shift to public transport) Sector Technologies efficiency improvements of power generation; coal and gas with CCS; Energy nuclear power; hydropower; wind power; solar PV; geothermal; bioenergy; conversion ocean; PHS; reinforcing electricity interconnection; Hydrogen generation (electrolysis)* fuel economy improvement of ICE, train, maritime, and aviation; NGV; BEV*; Transport PHEV; FCEV; biofuels; eco-driving Improvement of energy-efficiency performance of buildings (e.g. insulation); Residential/ high-efficiency equipment and appliances; electric heat pump water heaters; commercial electrification for heating, cooling, and cooking; energy-management systems energy-efficiency improvements in industrial processes; CCS for iron making and cement lime; high-efficient boiler, furnace, and motor; industrial heat Industrial (incl. agriculture) pump; fuel economy improvements of agricultural machines; bioenergy use; management of nitrogen fertilizer * BEV, electric water heater, and electrolysis could act as flexible resources to integrate VREs in this version of AIM/Enduse 4

  5. The 2030 and 2050 target in Japan • 2030 target: 25.4% reduction wrt. 2005 based on the NDC • 2050 target: 80% reduction based on the national goal that considers the global 2 degrees goal GHG emissions in Japan 1,600 1,400 -22.7% GHG emissions (Mt-CO 2 eq) 1,200 wrt. 2005 1,000 800 600 -80% 400 wrt. 1990 200 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 * Excluding LULUCF 5

  6. Cases 1. Reference No carbon price. 2. NDC-Extended Implicit carbon prices are implemented to meet the NDC by 2030. Between 2030 and 2050, carbon prices are constant. 3. NDC-80 Implicit carbon prices are implemented to meet the NDC by 2030, and strengthened thereafter toward the 80% reduction by 2050. 4. Immediate-80 Compared with NDC-80, higher carbon prices are implemented by 2030 to the level of around a half of 2050. 5. No nuclear Meeting both the 2030 and 2050 target without restart of nuclear power. 6

  7. Assumptions on nuclear power • Lifetime: Extension to 60 years for the plants built since mid- 1980s, 40 years for all others (excluding No-Nuclear case) • Electricity supply from nuclear power:  232 TWh in 2030 (almost consistent with the assumption of NDC)  184 TWh in 2050 Capacity Electricity supply 60 350 300 50 Electricity generation (TWh) 250 40 Capacity (GW) 200 30 150 20 100 10 50 0 0 1990 2000 2010 2020 2030 2040 2050 1990 2000 2010 2020 2030 2040 2050 7

  8. Results: GHG emissions • Both 2030 and 2050 targets are technically feasible without nuclear power, however rapid reduction is required after 2030 • Immediate-80 case results 29% reduction in 2030 (wrt. 2005) • Carbon prices range 600-740 US$/t-CO2 in 2050 to meet the 2050 target GHG emissions pathways Carbon prices 1,600 Reference 1,400 Case 2030 2050 GHG emissions (Mt-CO 2 eq) NDC- 1,200 Extended Reference 0 0 NDC-80 1,000 NDC-Extended 165 165 Immediate-80 800 No-Nuclear NDC-80 165 654 600 2030 target 400 Immediate-80 260 607 2050 target 200 No-Nuclear 454 736 0 Unit: (US$/t-CO 2 ) 1990 2010 2030 2050 8

  9. Results: GHG emissions by sector • Residential and commercial sectors are almost decarbonized in 2050 to meet the 2050 target. GHG emissions by sector (direct + indirect) 1,600 GHG emissions (Mt-CO 2 eq) Non-energy CO2 1,400 & other GHGs 1,200 CO2|Energy Conversion 1,000 CO2|Transport 800 CO2|Residential 600 400 CO2|Commercial 200 CO2|Industry 0 Reference NDC-Extended Immediate-80 Reference NDC-Extended Immediate-80 NDC-80 No-Nuclear NDC-80 No-Nuclear 2030 target 2050 target '05 '10 2030 2050 9

  10. Results: Primary energy mix • Energy efficiency and low-carbon energies are key options • Share of low-carbon energies (NDC-80) :  12% in 2030, 59% in 2050 • Innovative technologies such as CCS could be important options by 2050 Primary energy mix (direct equivalent) 25 Primary energy supply (EJ) Renewable 20 Hydro 15 Nuclear Gas w/CCS 10 Gas 5 Oil 0 Reference NDC-Extended NDC-80 Immediate-80 No-Nuclear Reference NDC-Extended NDC-80 Immediate-80 No-Nuclear Coal w/CCS Coal 10 '05 '10 2030 2050

  11. Results: Electricity supply • Renewables account for 23% in NDC-80, 30% in Immediate- 80 in 2030. In 2050, electricity is almost decarbonized. • Integration of variable renewable energies (VREs) is challenge after 2030 Electricity generation Other RES 1,400 Ocean Electricity generation (TWh) 1,200 Bioenergy 1,000 Geothermal 800 Wind Solar PV 600 Oil 400 Gas w/CCS 200 Gas 0 Coal w/CCS Reference NDC-Extended NDC-80 Immediate-80 No-Nuclear Reference NDC-Extended NDC-80 Immediate-80 No-Nuclear Coal Hydropower Nuclear '10 2030 2050 11

  12. Final energy consumption • Energy efficiency continues to be a key option by 2050  Around 10-11% in 2030, 43% in 2050 (wrt. 2010) • Electrification is another challenge, especially after 2030.  Around 28% in 2030, 46% in 2050 Final energy consumption by sources Final energy consumption (EJ) 18 Hydrogen 16 14 Heat 12 10 Renewables 8 Gas 6 4 Oil 2 0 Coal Reference NDC-Extended NDC-80 Immediate-80 No-Nuclear Reference NDC-Extended NDC-80 Immediate-80 No-Nuclear Electricity 12 '05 '10 2030 2050

  13. Conclusions • Japan’s NDC would be effective to consolidate a transition from the baseline trajectory, by improvement of energy efficiency and deployment of low-carbon electricity. • The 80% target by 2050 requires significant electrification in end-use sectors as well as the acceleration of energy efficiency and decarbonization of electricity between 2030 and 2050. • The implementation of NDC is meaningful, however, rapid transformation of energy systems would still be required to meet the national long-term goal. 13

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