|21 July 2011
Institute for Global Environmental Strategies (IGES)
Institute for Sustainable Energy Policies (ISEP)
Objective of the study
This analysis employs projections of the future GDP, population and energy source prices provided by the International Energy Agency (IEA). Based on these projections, the study evaluates the economic effects of the above four scenarios assuming final energy demands in Japan do not change, and no concrete energy and emission policies such as feed-in tariff (FIT) system for the renewable energy and emission trading system are introduced.
We obtained the following four results from the provisional analysis of the model.
1. Effects on energy supply portfolio: If no concrete policies to promote renewable energy are introduced, fossil fuels such as liquid natural gas, natural gas and petroleum will remain as the major Japanese energy source.
2. Effects on the energy supply system: Figure 2 presents the net present value of the total cost of each scenario. If nuclear power is abolished, additional costs will evolve compared with the reference scenario. However, in the nuclear phase-out and renewable energy promotion scenario, the effects on Japanese economy can become smaller because variable costs such as fuel costs can be reduced.
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Considering the effects on domestic employment and economic impact, the nuclear phase-out and renewable energy promotion scenario will be more effective for mitigating the negative impact on Japanese economy.
3. Energy producing cost and energy retail price in the market: In the short-run, the energy retail price is likely to rise in all nuclear phase-out scenarios including the nuclear phase-out and renewable energy promotion scenario. However, the nuclear phase-out and renewable energy promotion scenario can mitigate the energy retail price hike by 2050 at a lower level.
4. Greenhouse gas (GHG) emissions: The level of CO2 emissions will not be significantly reduced unless renewable energy promoting and/or energy saving policies are introduced. However, after the year 2040 when ratio of renewable energy supply exceeds a certain value, the amount of emission reductions will become larger in the nuclear phase-out and renewable energy promotion scenario compared to the reference scenario.