Japan’s power sector needs regulatory reforms and the ability to integrate non-hydro renewables into a central grid to overcome the multiple challenges the sector faces, GlobalData said in a statement on Friday.
The report entitled Japan Power Market Outlook to 2030, Update 2018 – Market Trends, Regulations, and Competitive Landscape, revealed that among the many challenges the power market has, one of the key issues is the trade-off between importing costly fossil fuels to generate power and continuing with its reliance on nuclear power.
The Fukushima disaster triggered the temporary closure of nuclear power plants after 2011, forcing the country to rely on plants running on costly and imported fossil fuels. Chiradeep Chatterjee, a power industry analyst at GlobalData, surmised that the extent to which nuclear power would retain its importance in the power mix in the future is dependent on the government's ability to assure the public of the safety of nuclear reactors and the success of the power sector's reforms.
Another challenge is in boosting the share of non-hydro renewables and the ability to integrate these into the grid by reforming the electricity system.
"The grid integration of non-hydro renewables, in fact, is dependent on the success of the reforms, which are essentially aimed to bring the entire grid under a central command. The integration of non-hydro renewables allows a play-off between varying generation and demand patterns among regions," Chatterjee underlined.
The power sector in Japan has grown in different regions of the country in an isolated manner, with some regions having their own independent grids. This, in turn, would make it more difficult to administer a centrally integrated grid network. Chatterjee explained the country was prompted to resort to energy efficiency measures to counter energy security risks, which had a knock-on effect of stifling electricity consumption growth.
"Growth in electricity consumption in the country has been dampened by a flat population trend in the past decade," the report said.
"Mirroring this, annual generation too declined in 2017 compared to levels prior to 2011. Immediately after the Fukushima disaster, the world had thought that nuclear power was on its way out in Japan. However, as economic pragmatism forced the government to re-endorse the industry, Japan continued to walk the nuclear tightrope," Chatterjee stated. He affirmed the challenges that confront Japan’s power sector would take time but recommended system restructure to introduce more renewables into the mix.
"Reforms will take time for their effect to be felt. It appears that Japan will continue to have to depend on fuel imports whose volumes should decrease with time. Electricity consumption will therefore continue to decline. The establishment of a deregulated power system and the government’s assertion that it would bring down regulatory hurdles should help boost the growth of the renewable power sector," Chatterjee concluded.
(Anadolu Agency)
