Business Monitor International


Japan Power Report

Published 29 April 2014

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Japan Power Report

BMI View: Japan will ultimately restart 40-50% of its nuclear reactors so as to reduce the cost of fuel imports, which have been exacerbated by the weak yen and pushed Japan to register a record trade deficit in 2013 . We anticipate LNG imports will remain elevated - as gas-fired generation fills the void left by nuclear facilities that are closed permanently. Coal has also been championed by the government in i ts April 2014 Basic Energy Plan a nd looks set to play a role as an important source of baseload capacity.

At the time of writing all 50 of Japan's nuclear reactors are offline. This gaping hole in Japan's electricity generation is being filled by thermal sources (oil, natural gas and coal) and this has led to soaring electricity prices, which in turn are placing significant cost pressures on Japan's consumers, manufacturers and exporters, and risk undermining the effects of 'Abe-nomics'. With the country recording a record trade deficit in 2013 as utilities continued to rely on expensive imported fuels at a time when aggressive quantitative easing had weakened the yen, Prime Minister Shenzo Abe is extremely keen to restart nuclear reactors.

In spite of strong popular opposition, we anticipate the financial burden will prompt two nuclear re-starts in 2014, assuming that: a) reactors pass the NRA safety inspections, b) the Fukushima clean-up proceeds without complications that would encourage further public opposition, c) pressurised water reactors (assumed to be safer) are prioritised for re-start over boiling water reactors.

The outlook post-2016 is purely speculative at this point as the 2016 election will be a wildcard for energy/nuclear policy. However, in terms of our base-case scenario, we are operating under the assumption that two to three reactors will come online per year from 2015. Not all reactors will restart; we forecast about 40-50% of total capacity will eventually come back online. This will taper demand for oil-fired electricity...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
12
Japan Snapshot
12
Table: Country Snapshot: Economic and Demographic Data (Japan 2013-2018)
12
Table: Country Snapshot: Economic and Demographic Data (Japan 2018-2023)
12
Table: Country Snapshot: Power Sector
12
Japan Power Forecast Scenario
13
Electricity Generation And Power Generating Capacity
13
Table: Total Electricity Generation Data And Forecasts (Japan 2012-2017)
13
Table: Total Electricity Generation Data And Forecasts (Japan 2018-2023)
14
Table: Electricity Generating Capacity Data And Forecasts (Japan 2012-2017)
16
Table: Electricity Generating Capacity Data And Forecasts (Japan 2018-2023)
16
Table: Energy Policy: The Fourth Basic Energy Plan
19
Table: Reactor Restart Applications
24
Electricity Consumption
29
Table: Total Electricity Consumption Data And Forecasts (Japan 2012-2017)
29
Table: Total Electricity Consumption Data And Forecasts (Japan 2018-2023)
29
Table: Fact Box: Proposed Smart Meter Rollout Deadlines
30
Transmission & Distribution, Imports & Exports
32
Table: Electric Power T&D Losses Data And Forecasts (Japan 2012-2017)
32
Table: Electric Power T&D Losses Data And Forecasts (Japan 2018-2023)
32
Industry Risk Reward Ratings
33
Asia Power Risk/Reward Ratings
33
Table: FACT BOX: VIETNAM'S POWER DEVELOPMENT ROADMAP
36
Table: ASIA POWER RISK/REWARD RATINGS
39
Japan Power Risk/Reward Ratings
39
Rewards
39
Risks
40
Market Overview
42
Key Policies And Market Structure
42
Regulation And Competition
42
Sustainable Energy Policies
43
Pricing
45
Japan Power Projects Database
46
Table: Major Projects - Power
46
Competitive Landscape
52
Tokyo Electric Power
53
Hokkaido Electric Power
54
Kyushu Electric Power
54
Tohoku Electric Power
54
Chubu Electric Power
55
Hokuriku Electric Power
55
Kansai Electric Power
55
Shikoku Electric Power
55
Okinawa Electric Power
55
Chugoko Electric Power
56
Regional Overview
57
Asia Regional Overview
57
Table: REGIONAL ELECTRICITY GENERATION GROWTH, % CHG Y-O-Y
65
Glossary
67
Table: Glossary Of Terms
67
Methodology
68
Industry Forecast Methodology
68
Sources
71
Risk/Reward Ratings Methodology
71
Table: Power Risk/Reward Rating Indicators
72
Table: Weighting Of Indicators
74

The Japan Power Report features Business Monitor International (BMI)'s market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.

The Japan Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.

Key Benefits

  • Use BMI's independent industry forecasts for Japan to test other views - a key input for successful budgeting and strategic planning in the power market.
  • Target business opportunities and risks Japan's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Japan
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector, and within the broader political, economic and business environment.

Regional Overview

The Regional Overview provides a comparative context from within which one can assess the relative profitability of the power industry in a given country, incorporating BMI's country risk macro forecasts into our regional analysis. They also detail any relevant issues or events that might cause market fluctuations, as well as evaluate the impact of existing power infrastructure and fresh investments on the regional market.

BMI Industry Forecasts

The Industry Forecasts provide historic data series and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual power segment present in the country. These forecasts are in turn supported by explicit assumptions, in conjunction with analysis of the key risks to the main forecast. These in turn are broken down into:

Electricity Generation forecasts for Thermal, Coal, Gas, Oil, Nuclear, Hydro and Non-Hydro Renewables. For this section, we provide information on electricity generation (TWh), % growth year-on-year, KWh per capita, and the % of total electricity generation. The thermal fuels (coal, gas and oil) also have figures for their % of total thermal electricity generation.

Electricity Generating Capacity offers forecasts for the potential net capacity and net capacity growth % change year-on-year for the whole power industry. It also includes individual forecasts for capacity (MW), capacity growth % change year-on-year, and % of total capacity for Thermal, Nuclear, Hydro and Non-Hydro Renewables.

The section also includes historic data series and forecasts to end-2018 for:

Electricity Consumption, encompassing information on net consumption (TWh), net consumption growth % change year-on-year, and net consumption per capita (KWh).

Transmission And Distribution Losses, comprising predictions on Electric Power Transmission And Distribution Losses, (TWh), and Electric Power Transmission And Distribution Losses, % of Output.

Electricity Trade, offering historical figures for imports and exports and forecasts for net imports (TWh).

Market Overview

This section provides an overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.

Risk/Reward Ratings

BMI's Power Risk/reward Ratings provide fully comparable ratings aimed at investors (power companies, services companies and equity investors) in the regional power market. The ratings methodology makes sophisticated use of various industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings products.

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