Tokyo—Japan's Minister of Economy, Trade and Industry Hiroshi Kajiyama said Feb. 2 that the recent upsurge in power demand was a lesson for the country to consider its back-up electricity sources as it mulls its future energy mix.
Japan faced a significant increase in its thermal power generation in early January because of severe cold spells, which had tightened the country's power supply and demand balance, because of low solar power output from bad weather."Heavy snow and lowered temperatures were among factors that had increased the [power] demand because solar power could not always be generated in the heavy snow," Kajiyama told a press conference.
"Thermal power should be covering [the loss of solar power] ... but the tightening of LNG supply has made situations difficult," said Kajiyama, adding that increased demand from Asia and Panama Canal transit restrictions were among factors for the LNG supply tightness because of difficulty to store LNG for more than 20-30 days.
Japan's LNG stocks held by power utilities have started increasing again, after dropping to a multimonth low of 1.16 million mt on Jan. 11, as the country is past its peak power demand for winter, according to a survey released Jan. 19 by METI.
In line with the easing of power demand, Japan's overall thermal power plant utilization rates, including coal, oil and LNG have also dropped.
The rebound in LNG stocks likely indicates that Japanese utilities have overcome the worst of the gas shortages that led to record high power prices in recent weeks and which contributed to Asian LNG spot prices hitting an all time high of $32.5/MMBtu.
"Although [recent events] did not develop into critical situations, we will need to consider about how [the country's] back-up electricity sources should be considered going forward as we consider our power balance and increase renewable energy [share]," Kajiyama said.
Energy mixMETI unveiled Dec. 21 a proposal for the country's 2050 energy mix as the country gears up to achieve carbon neutrality by 2050, with renewable energy accounting for about 50%-60% of Japan's 2050 energy mix.
Under the METI proposal, hydrogen and ammonia will account for about 10% of the power generation mix in 30 years, from zero currently, with nuclear as a carbon-free source, together with fossil fuels, with carbon capture, utilization and storage (CCUS), and carbon recycling, accounting for 30%-40% of the energy mix.
The proposal came as METI is reviewing Japan's energy mix for the country's Strategic Energy Plan, under which it is scrutinizing the progress toward the 2030 energy mix.
Carbon pricingMETI will launch its talks on carbon pricing in mid-February, following the launch of carbon pricing policy discussions Feb. 1 at the Ministry of Environment, Kajiyama said.
METI's series of carbon pricing talks will look at topics not limited to carbon tax, carbon emissions trade; carbon border adjustment measures; carbon credit trade in cooperation with the environment ministry, Kajiyama said.
