Toshio KOSUGE Energy Conservation Renewable Energy Department Agency

Toshio KOSUGE Energy Conservation & Renewable Energy Department Agency for Natural Resources and Energy(ANRE) Ministry of Economy, Trade and Industry(METI) February, 2012

global conditions surrounding energy and energy supply structure of Principally in Asia, but the energy demands of the world are expected to rise rapidly to about 1. 3 times the current amounts by 2030. The energy supply structure will be hard pressed, due to the intensification of the competition to acquire resources among the countries of consumption, such as China. Japan has the lowest self sufficiency rate among the major industrialized nations. (Petroleum equivalent in million tons) Outlook of global energy Overall Approx. 1. 3 times International comparison of energy self sufficiency rates (FY 2009) Others Africa India Approx. 1. 9 times Middle East * The self sufficiency rate is for instances where atomic power is imported. (Figures inside brackets are for instances where atomic power is considered to be produced domestically. ) Central and South America (44% (35%)) (19%) India China Approx. 1. 7 times Asia (excluding Japan, China, India and Korea) Russia (53%) (70%) China USA UK 　 France German y 2030 16, 014 Japan USA 2008 12, 271 Italy Eastern Europe and Central Asia Japan (85%) OECD (excluding Japan and USA) Source: World Energy Outlook 2010. 　 Source: Calculated from statistics published by IEA. 2

Energy Efficiency in Japan Primary energy supply per GDP unit of each country (2007) Japan = 1 7. 5 5. 7 6. 0 5. 1 2. 8 2. 1 1. 3 (Source) “ Calculated according to IEA Energy Balances of OECD/Non-OECD Countries(2009 edition) “ 　

Energy Consumption Efficiency of Each Sector Comparison of energy indices necessary for making 1 k. Wh electricity by thermal power generation (FY 2004) 150 137 114 120 100 80 145 Comparison of energy indices necessary for making 1 ton of cement intermediate product (clinker) (FY 2003) 200 Germany US France China (Source: ECOFYS (Netherlands)) 50 120 113 110 101 Japan West Europe Korea Latin America China 130 120 125 110 West US and Europe Canada (Source: Solomon Associates) Comparison of energy indices necessary for making 1 ton of paper and paper board (FY 2003) Asian industrial 140 120 80 countries 160 123 134 144 Japan 100 Korea EU China US Russia (Source: Japan Iron Steel Federation) 100 Japan Korea 104 110 115 119 100 Canada US (Source: ANRE, Statistics Annual Report (UK), Environmental Report (Canada), etc. ) 80 Japan World (Source: International Aluminum Association, etc. ) 140 80 Sweden 140 120 Comparison of energy indices necessary for making 1 ton of electrolytic caustic soda (FY 2003) 100 Japan Latin North America (Source: Japan Mining Association) Asia 100 120 100 60 Europe Comparison of energy indices necessary for the rolling process of aluminum board 105 100 Japan 127 100 80 50 US Russia (Source: Battelle Research Center) Comparison of energy indices necessary for making 1 ton of iron (FY 2003) 110 90 154 100 120 102 143 100 Japan 133 150 100 Comparison of energy indices necessary for making 1 kl of petroleum product (FY 2002) 100 202 152 145 131 130 250 178 177 150 111 Comparison of energy indices necessary for refining copper 80 China US (Source: Chemical Economic Handbook, etc. ) East Europe West Europe Source: Nippon-Keidanren International Cooperation Center Excerpt from Outline of Follow-up Result, 2007 (dated November 14, 2007) (http: //www. meti. go. jp/committee/materials/downloadfiles/ g 70216 a 04 j. pdf)

Japan’s Energy Efficiency Policy 1. Regulation 　Energy Efficiency Law : Enacted 1979 2. Promotion - Tax incentive - Subsidies (including for R&D) - Preferential interest rate, etc. 3. Voluntary Action

Overview of Japan’s energy efficiency policy Industrial sector Commercial/residential sector Commercial Transportation sector residential Energy Conservation Law Energy management obligation by Energy Conservation Law (by an unit of a company ) Regulation Enhancement of energy efficiency of buildings and residences by Energy Conservation Law Energy management obligation by Energy Conservation Law (Carrier, Consignor) Top Runner Program Energy-saving labeling Budget and Tax Promotion Subsidies for promoting energy efficient facilities (high-efficient building , highperformance industrial furnace etc. ) Housing Ecopoints System Tax incentive for energy efficient reform of residence, Promotion of high fuel economy vehicles(clean energy vehicles) Tax incentive / Low-interest loan Subsidies for promoting energy efficiency technological development Voluntary action 6

Japan’s Energy Efficiency Policy ①　Factories/Offices * <Regulations> in each factories/offices - Energy Management System - Energy Managers saving-energy experts assigned mandatory - Reporting of Energy Consumption to the Gov. * Chain-Stores included → expansion of coverage

Encouraging Energy Management System Energy managers must be assigned in every factory/ office with a certain quantity of energy consumption. Encouraging their management by awarding best practices

②　Transportation <Regulations> - Carriers, Consigners - Setting higher fuel efficiency 　 standard <Voluntary Action> - “Eco Drive”, “Idling Stop” method of driving

③　Houses/Buildings <Regulations> - Constructors, Retailers

④　Automobiles/Electronics <Regulations> - “Top Runner” Program

Top Runner Program < Products> Passenger vehicles < Improvement of energy efficiency> 22. 5 ％（ FY 1995→FY 2005） 67. 8％（ Air-conditioners Electric refrigerators FY 1997→FY 2004） 55. 2％（ FY 1998→FY 2004） 25. 7％（ TV sets FY 1997→FY 2003）

Present Energy situation after the Great Earthquake of Japan

Nuclear Power Stations TEPCO Fukushima Dai-ichi Nuclear Power Station Before the Earthquake and Tsunamis After the Earthquake and Tsunamis t Uni t 6 Uni 5 nit U 1 t i n U 2 t i n U 3 4 TEPCO Air Photo Service Inc (Myoko, Niigata Japan) 14

Impact on Energy Supply/Demand in Japan Tokyo Electric Power Company supplies electricity to an area with 42 million people and 40% of Japan’s GDP, but lost 40% of its generation capacity after the earthquake and tsunami. 33 GW (Apr. 15) 49 GW 46 GW (Aug. 18) (Jul. 15) 42 GW (Jun. 28) Peak Demand of the Month in 2010 Peak Demand of the Month in 2011 Supply Capacity of TEPCO in 2011 15

Supply–Demand Measures for last Summer Major measures taken regarding demand to secure the supply-demand balance during this summer are as follows: Large-volume-electricity customers (enterprises with contract for supply of 500 k. W or more) (1) Voluntary formulation and implementation of plans for suppressing the power consumption in the peak time zone (2) Application of Article 27 of the Electricity Business Act (Restriction on Use of Electricity) Small-volume-electricity customers (enterprises with contract for supply below 500 k. W) (1) Presentation of examples of electricity-saving measures (2) Encouragement of formulation and announcement of voluntary electricity-saving action plans (3) Electricity-saving supporters’ visits Households (1) Presentation of examples of electricity-saving measures (2) Request for electricity saving through media (3) Distribution of “Electricity-saving education” materials to elementary and junior high schools Approaches across several fields (1)Development of electricitysaving campaign (2) Thorough visualization of electricity supply–demand data (“Denki Yoho (Electricity Forecast)”) (3) “Tight supply-demand balance alert” to notify the tight supply-demand balance (1) Urgent electricity-saving request was made when there was a concern for rolling blackout implementation (2) Information provision via TV, radio, mobile phones, and disaster-prevention public address system 16

Supply Measures last Summer The measures taken regarding supply for ensuring a supply-demand balance this summer were mainly as follows: 　*Service Areas of Tokyo Electric Power Co. (TEPCO) and Tohoku EPCO Power Co. The decrease of electricity supply capacity of TEPCO and Tohoku EPCO due to the effects of earthquake and tsunami ・・▲ 26 million k. W [Measures taken by the Government] (1) Approach for relaxing some regulations　　　　　 e. g. ; Periodic inspection of thermal power generation stations under the Electricity Business Act shall be allowed to be postponed for one year at most. (2) Promoting introduction of private power generation plants and decentralized generation plants 　　　　　　　　　　　 [Measures taken by the utilities] (3) Restoration of the disaster-affected thermal power stations (4) Restart of thermal power stations that have been stopped for a long time (5) Installation of urgent power supply (gas turbines etc. ) *(4) &(5): on the basis of installed capacity The decrease of supply capacity ▲ 26 million k. W － The supplement supply capacity owing mainly to the above supply measures (1) - (5) ＋20. 5 million k. W ＝ 5. 5 million k. W 17

Measures for Balancing Supply and Demand for this Winter 1. This winter, we would like to request electricity saving to keep an appropriate supply–demand balance and avoid restriction of electricity use or implementation of rolling blackouts. On the basis of the summary of this summer, we would like to make a request for electricity saving within the scope where enterprises can minimize the impact on production and operation. 2. We are still examining the supply-demand balance for this winter, but it is estimated that the balance will be tight in the Kansai and Kyushu Electric Power Company areas with a high ratio of nuclear power generation. 3. “Electricity Supply-Demand Measures for this winter” is released on 1 st of November , 2011. (Reference 1) Forecast of Supply and Demand This Winter Estimated at the Energy and Environment Conference on July 29 (10, 000 k. W) Hokkaid o Tohoku Tokyo Chubu Kansai Hokuriku Chugoku Shikoku Kyushu Januar y Maximum electricity demand 579 1, 420 5, 150 2, 342 2, 665 528 1, 074 520 -80 (-1. 1%) -33 (-0. 4%) -113 (-0. 7%) 7, 069 8, 629 15, 698 1, 533 (Reference 2) Nuclear Power Generation Ratio of the Electricity Utilities (based on FY 2009 power generation) Hokkaido Tohoku Tokyo Chubu Kansai 34. 1% 21. 6% 27. 9% 13. 3% 45. 1% Hokuriku Chugoku 35. 0% 14. 6% Shikoku Kyushu 40. 6% 41. 6% 18

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