YoshiteruNakagawa General Manager ... - gas.or.jp · üThe development of trunk lines üShift to...

The Japan Gas Association

Country Report

Current Status of Gas Industry in Japan

Yoshiteru Nakagawa General Manager

International Relations Department

11th Round Table Meeting

25 May 2011

The Japan Gas Association2

Contents

1. General Information on Japan (Economy and Energy)

2. The Energy and Environmental Policies of Japan

3. Efforts to Support the Sustainable Development of

Gas Industry and Build Trust with Customers


General Information on Japan

127 millionPopulation

▲2.4％GDP Growth Rate

526.4 trillion JPYGDP

372 million oil-equivalent kLFinal Energy consumption

557 million oil-equivalent kLPrimary Energy Supply

37,783 km2Area (km2)

General Information

GDP & GDP Growth Rate

(As of March 2010)

0

100

200

300

400

500

600

'04 '05 '06 '07 '08 '09 '10/1Q'10/2Q'10/3Q

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

GDP trillion JPY GDP Growth Rate(%)

*The figures of FY2010 are areannualized.

1. General Information on Japan

Sources: “Japan Statistical Yearbook 2011”, Statistics Bureau, the Ministry of Internal Affairs and Communications, “SNA Statistics (National Accounts of Japan)”, the Cabinet Office,“Energy supply and demand results of fiscal 2009 (Prompt report )”, Agency for Natural Resources and Energy


Energy Situation in Japan 1

Sources: “Energy supply and demand results of fiscal 2009 (Prompt report )”, Agency for Natural Resources and Energy

Trend of Primary Energy Supply Dependence on Imported Energy

Source: “Energy Balances of OECD Countries 2010 Edition”, IEA

*IEA defines nuclear power as indigenous energy.

Import Import ::83%83%

22%

13% 15%

46%

Oil (imported)

Coal (imported)

Natural gas(imported)Nuclear

Others (e.g. indigenous fossil fuel, renewable energy)

4%


0

100

200

300

400

500

600

700

'90 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

0%

5%

10%

15%

20%

25%

19.4%

Contribution of Natural Gas(%)Unit: million oil equivalent kL

Natural gas

Nuclear power

Hydro power Others (Renewable energy etc)

Petroleum

Coal



Source: “Energy-in-Japan Statistics”, Agency for Natural Resources and Energy


Trend of Final Energy Consumption

Power Source Composition Ration

Source: “2010 Annual Report on Energy”, ”Agency for Natural Resources and Energy

Use of Imported LNG (2008)

City Gas37%

Power Generation63%

Source: “Handbook of Energy & Economic Statistics in Japan 2010”, IEEJ/EDMC

9.8%

5.0%

0

50

100

150

200

250

300

350

400

450

'90 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

0%

2%

4%

6%

8%

10%

12%

Contribution of Natural gas (%)Unit: million oil-equivalent kL

Coal and coal products

Petroleum products

Natural gas

Electricity

Heat

Others

Hydropower8.1%

Coal

24.7%

LNG 29.4%

Nuclear power

29.2%

Oil7.6%

New energies and other1.1%



0

5

10

15

20

25

30

35

'70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 00 02 04 06 08

0

5

10

15

20

25

30

Source: Japan Gas Association

Billion m3 Million customers

City Gas Sales Volume and number of Customer

Residential

Sales volume (left axis)Number of customers

Commercial and other

Sales volume by Sectors

(2009)

Industrial :49.4%


Industrial

ü33.8 billion m3 (2009)ü28.8 million customers (2009)


1. Mid-term target for the reduction of GHG emissionsBy 2020: 25% reduction from 1990 (30% reduction from 2005)

2. Establishment of Emission trading system (cap and trade)3. Establishment of a global warming tax4. Introduction of new and renewable energies

By 2020: 10% share of primary energy supply5. Feed-in-tariff of the renewable energy

p Change in government to Democratic Party of Japan took place on September 2009.

1. Bill on Basic Law for Prevention of Global Warming 2. New Growth Strategy3. The Strategic Energy Plan 3. The Strategic Energy Plan (revised on June 2010)

2. The energy and environmental policies of Japan

Recent Events of Energy/Environmental Policies

Democratic Party’s Manifesto 2009

2010


New Strategic Energy Plan

- Maintain and enhance energy efficiency in the industrial sector at the world’s highest level- Halve CO2 emissions from the residential sector - Raise the next-generation vehicles’ share in new vehicle sales to up to 70% by 2030- Raise the zero-emission power source ratio from current 34% to about 70%0.5 billion tons of CO2 emission will be reduced from the current level until 2030.

Natural gas will be an important energy option for quickly building a low-carbon society.

- Non-fossil fuels: Maximizing the use of nuclear power and renewables- Fossil fuels: Contribute to a significant proportion of energy supply in the mid- to long-term- Natural gas is,● The least CO2-intensive of all fossil fuels● Large supply potential worldwide with the emergence of new sources such as shale gas● Cost-effectively reduces CO2 emissions thanks to Japan's readiness for advanced use

Need to promote “a shift to natural gas”


Targets and index for achievement by 2030

Ensuring the best mix of energy options


“Shift to Natural Gas”

1. Strengthening gas supply networks2. Expanding the use of renewable energy3. Developing hydrogen supply infrastructure

1. Industrial sector: - Switching to natural gas for meeting the heat demand:

Doubling the share of gas by 2030- Expanding the use of cogeneration systems:

Doubling the installed capacity by 2030 to 11 million kW2. Residential sector: Expanding the use of highly efficient water heating

systems; enabling self-sustained growth of the residential fuel cell market 3. Transport sector: Expanding the use of next-generation vehicles4. Cross-sectoral: Optimizing energy utilization in cities and urban areas by

district heating/cooling and the utilization of unused energy sources

p Towards achieving low-carbon growth, reform of energy demand-supply structure is promoted.


Demand structure

Supply structure


Natural Gas Supply and Demand Forecast

Petroleum 244

Petroleum 141

LPG 18

LPG 18

Na tura l ga s

105

Natura l ga s81

Coal 88

Nuclear power 60

Nuclear power 122

Renewables, etc. 35

Renewables, etc. 67

Coal 130

0

100

200

300

400

500

600

2007 (actual) 2030 (outlook)

Unit: million oil-equivalent kL

12.7% down

22.9%down


Outlook for the Primary Energy Supply in 2030

0

10

20

30

40

50

2007 (actual) 2030 (outlook)

p According to the Government’s outlook, the supply of natural gas, as one of the primary energy supply options, will decline. Meanwhile, the outlook estimates that the demand for natural gas for City Gas will increase by 20% in 2030.

Natural Gas Demand for City Gas in 2030

Sources: Coordination Subcommittee of the Advisory Committee for Natural Resources and Energy (2nd Meeting) and Basic Planning Committee (4th Meeting) Joint Session; estimations based on METI’s reference material titled "Outlook on Supply and Demand in 2030"

Unit: million oil-equivalent kL

21.4% up

Accelerating the switching of fuel in industry


Establishment of Study Group and Working Groups

p In July 2010, the Study Group on Desirable Gas Utility Business in Low-Carbon Society, which has 2 Working Groups, resumed its activities.

WG1. Shift to and advanced use of natural gasi. Acceleration of switching from other fuelsii. Expanding the use of cogeneration systems (including

fuel cell systems)iii. Expanding the use of renewable energy sources

WG2. Development of gas distribution infrastructuresi. Present state of infrastructure development

・ Potential and commercial feasibility of wide-area pipelinesii. Pipeline development: challenges and corresponding measures

・ Infrastructure development in uncovered regions: sources ofinitiatives and schemes for development・ Consigned distribution system, pipeline interconnection, etc.・ Support schemes


The Study Group on Desirable Gas Utility Business in Low-Carbon Society

Agenda 2 Working Groups for detailed discussions

ü Measures for accelerating the shift to natural gas

ü Challenges that emerge from changes in the industrial structure

p Switching to natural gas from otherfuels; infrastructure development

p Advanced use of natural gas; district-based utilization of heat

p Introduction of renewable energysources

p Providing comprehensive energy servicesp inter-utility partnership, p global activities, p development of competitive environment,

etc.


R&D for City Gas Use3. Efforts to Support the Sustainable Development of Gas Industry and Build Trust with Customers

Gas burner with improved safety and energy economy

Fuel Cells (SOFC)Fuel Cells (PEFC) High efficient GHP

NGV for cargoHydrogen station

Regenerative

burner

High efficiency cogeneration systems with natural gas engineUsing Biogas

Examples of R&D by Japanese Gas Industry


Outlook of Japan’s Gas Industry

23 million 28 million

The number of users

LPG industryCity gas industry

Type of gas industry

21,654211

The number of gas utilities

3. Efforts to Support the Sustainable Development of Gas Industry and Build Trust with Customers

Areas covered by private city gas utilities

Areas covered by municipal city gas utilities

Areas covered by Gas Utilities

0 50 100 150 200 250

'09

'07

'05

'03

'01

'99

Low Pressure Middle Pressure High Pressure

4 Major Utilities account for 72%

Sales Volume Number of Customers

Tokyo Gas Tokyo Gas

Osaka GasOsaka GasToho Gas

Saibu Gas Saibu Gas

Toho Gas

33.8 bcm(FY2009)

28.8 millionCustomers

(FY2009)

Total Distance of City Gas Pipeline

Source: Japan Gas Association, Gas Energy News

Thousand km


Major Industrial Areas and Trunk Lines

Major industrial areasMajor Trunk lines

üThe development of trunk linesüShift to Natural Gas

Source: The Japan Gas Association

Important issues


p Many industrial areas have no natural gas supply due to the inadequate pipeline networks.


Wider Range of Responsibilities for Safety3. Efforts to Support the Sustainable Development of Gas Industry and Build Trust with Customers

M

Gas appliance

House pipe (excluding gas meter) Gas appliances and ventilation facilities

Public roads, etc. Customer premises

Meter valve

Gas meter

Service pipe

Gas valve

Gas utility

Gas utility

Gas utility (in part)Responsibility division

Customer (installer)Construction division

CustomerProperty division

Responsibility division

Construction division

Property division

Customer (installer)Gas utility

Customer (installer)Gas utility

CustomerGas utility

District main

Gas utility

üResponsibility range in Japan

üResponsibility range in US


Efforts to Reduce Gas-Related Accidents

63

21

13 1

0

97

89

75

71

61

30

43

20

31

18

44

5

6

3

2

4

4 3

0010

34

03

10 1

00

20

40

60

80

100

120

'76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '07 '08 '09

Consumption stage

Distribution stage

Production stage


The number of victims of fatal gas accidents

NoteTarget

Stage

2.8

0.20.2

3.2

‘05-’09 average (accidents per year)

Gap from the target

○

○

―

Almost zero

0.3-0.5Consumption

0.3-0.5Distribution0.1-0.2Production

1Close to zeroAll

Target number of accidents per year

Safety enhancement targets

To Increase safety in using city gas;

<Safety Guide for Foreigners>

*Partly excerpted

The challenge is to prevent accidents in the consumption stage.


Earthquake Countermeasures of Gas Industry3. Efforts to Support the Sustainable Development of Gas Industry and Build Trust with Customers

1. Preventive measures

2. Emergency measures

3. Recovery measures

- Use of polyethylene pipes and gas meters with safety features

-The Japan Gas Association dispatches disaster relief personnel and equipment.

The Convergence of Four Plates

Eurasian Plate

North AmericanPlate

Philippine Sea Plate

Pacific Plate


LNG Supply Chain3. Efforts to Support the Sustainable Development of Gas Industry and Build Trust with Customers

Qatar8%

Malaysia18%

Australia19%

Indonesia24%

Sakhalin12%

Brune i8%

Abu Dhabi6%

Oman3%

Alaska

LNG ImportingGas Liquefaction

Gas WellMajor gas utilities in Japan

LNG Long-term contract by Countries/Regions

About 74 million ton/year

Source: Japan Gas Association

<Examples>ØDevelopment of small and medium size gas fields with floating LNG plants (FLNG):- Sunrise Project (Australia)ØDevelopment of unconventional gas:- Curtis CBM-LNG Project (Australia)- Development of the Sanga Sanga CBM Mining

Area (Indonesia)

New LNG & Unconventional Gas Project

Other gas utilities


Progress of Regulatory Reform in Gas Market

*Ratio of total sales volume

1999

2004

1 million m3 (*49%) or more1 million m3 (*49%) or more

0.5 million m3 (*53%) or more0.5 million m3 (*53%) or more

Large-volume customers

Medium-volume customers

Small-volume customers

1995 2 million m3 (*45%) or more *per annum2 million m3 (*45%) or more *per annum

2007 0.1 million m3 (*59%) or more0.1 million m3 (*59%) or more


Liberalization of City Gas Retail Market

Gas Rate System (partly excerpted)

ØGas rate is decided by the agreement between the parties.Wholesale (to other gas utilities)

ØGas rate set in the General Supply Provisions or the Selected Provisions is applicable.ØIn case of gas rate revision, the following procedure is need；

- Gas rate increase：Approval by the Minister of Economy, Trade and Industry- Gas rate reduction：Report to METIØMaterial Cost Adjustment system

Under 0.1 million m3 / year (residential use, small commercial use etc)

Regulated Market

ØGas rate is decided by the agreement between the parties.0.1 million m3 / year or more

De-regulated Market

Retail


Gas Rate System3. Efforts to Support the Sustainable Development of Gas Industry and Build Trust with Customers

Gas Rate System (regulated rate)

Gas RateMinimumCharge＝＋

Gas consumption (m3)×

Standard Unit Charge±

Material CostAdjustment Amount

Unit Charge (JPY/m3)

Commodity charge

Gas Rate Adjustment System

May Jun. Jul.Apr.Mar.Feb.‘11/Jan.’10/Dec.

AA (Dec.-Feb.) AA (May)

BB (Jan.-Mar.) BB (Jun.)

CC (Feb.-Apr.)3 month moving average

CC (Jul.)JPY/t

Unit ChargeAverage gas resource cost (LNG, LPG)

ⅠⅠ)) Standard average gas

resource cost

Upper limit(Ⅰ×Ⅰ×160%160%)

The Japan Gas Association

Thank you for your attention.

경청해주셔서감사합니다

感謝聆聽

YoshiteruNakagawa General Manager ... - gas.or.jp · üThe development of trunk lines üShift to...

Documents

Transcript of YoshiteruNakagawa General Manager ... - gas.or.jp · üThe development of trunk lines üShift to...