April/21/2012 Towards Long-term Sustainability: In Response to the Fukushima Nuclear Disaster Center for Japanese Studies University of California Berkeley Emerging Smart Grid Community in Japan after the March Disaster Takanori Ida ida@econ.kyoto-u.ac.jp Professor of Graduate School of Economics, Kyoto University, Japan Fulbright Scholar of Goldman School of Public Policy, UC Berkeley, USA Fulbright Scholar of Demand Response Research Center, Lawrence Berkeley National Lab., USA 1
Short Self Introduction Takanori IDA, Male, b.1965 Professor of Kyoto University, Graduate School of Economics, Japan Ph.D in Economics (Kyoto U) Some experiences of living abroad: 1997 U of Illinois at Urbana-Champaign, U.S.A 2001 U of Cambridge, U.K 2011 Fulbright Grantee (UCB and LBNL, USA) Research Areas: Telecommunications Economics (Broadband and 3G Mobile) Behavioral Economics (Addiction and Smoking) 2
Starting point is March 11. Fukushima crisis Tsunami disaster 3
What Japan s Energy Policy Will Be After the March 11 Disaster? The Current Discussions: Decrease the nuclear power share from 30% at present to 0% (possibly) in the long-run. Increase the renewable energy share from 10% at present to 20% in 2020. Speedup the smart meter deployment among 80% households within 5 years. Reconsider the structure of electricity industry including the vertical separation. Proceed the smart grid pilots to cut and shift demand peaks. 4
How Are the Japanese Feeling Now? Evidence from the Kyoto U UC Berkeley Joint Survey (On-line, N=4000 for Japanese & 4000 for American, Feb 2012) Q1 The government should aggressively work on reducing the emission of greenhouse gases to mitigate climate change. Totally Agree Somewhat Agree Neither Somewhat Disagree Totally Disagree Japanese 20% 44% 28% 5% 3% American 30% 34% 22% 6% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 5
How Are the Japanese Feeling Now? Q2 My perception toward nuclear power has changed since the nuclear accident at the Fukushima nuclear power plants in Japan on March 11, 2011. Totally Agree Somewhat Agree Neither Somewhat Disagree Totally Disagree Japanese 30% 38% 24% 5% 3% American 15% 22% 36% 13% 14% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 6
How Are the Japanese Feeling Now? Q3 What is your view on the future of nuclear power? 1: New plants should be built as part of an aggressive program of expansion. 2: New plants should be built, but cautiously. 3: The current situation should be maintained. 4: Current nuclear power plants should be demolished in the future. 5: Current nuclear power plants should be immediately demolished. Japanese 2% 11% 15% 46% 16% American 13% 38% 18% 7% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 7
The Disaster and Smart Grid Policy In light of the March 11 earthquake and the Fukushima crisis, a radical reconsideration of Japanese energy policy is now being discussed. The smart grid (the next generation power network) consists of home appliances equipped with IT technology connected to the power grid and can achieve energy saving and cost reduction. 8
Smart Grid Policy in Japan Originally, Japan required a smart grid to promote the introduction of renewable energy as the measures against global warming. This is because the power grid is connected to solar and wind power generators whose energy supply tends to be unstable depending on the weather. In response to the power shortage that suddenly occurred after the March 11th earthquake, the social expectations to the smart grid have been growing. 9
Smart Grid Policy in US On the other hand, the introduction of a smart grid in the United States was discussed as part of measures to address the electricity demand in response to a serious power shortage of California 10years ago. The objective consisted on reducing the gap between demand and supply during peak hours by the use of smart meters that can assign dynamic electricity pricing. Now the Obama administration intends to promote the development of a smart grid under the slogan of a Green New Deal. 10
Smart Grid Converging between US and Japan While the United States and Japan began to consider the smart grid differently, nowadays both countries are converging toward the same direction: promoting energy conservation and renewable energy deployment. From April 2010, the Ministry of Economy of Japan launched four-city smart-community pilot projects. Each project pursuits specific goals with different scale for each region. 11
Kyoto Osaka Nara High-tech HEMS Electric power virtual coloring technology that actualizes total home energy management system Yokohama Large-scale Smart Homes Energy management system which integrates HEMS, BEMS, CEMS Kyushu Dynamic Pricing Real-time pricing management in 70 companies and 200 houses Toyota Plugin HEV cars (next Plius) EV/PHEV deployment with V2H and V2G 12
Goal of Smart Grid My advice: Japanese manufacturers should cooperate without delay with overseas players and participate in the creation of international standards. My concern: All Japan type of ideas have unnecessarily created a counterattack from overseas markets and can lead to a Galapagos effect (isolation) of Japan s technologies. My task: TEPCO will deploy smart meters across 17 million customers (corresponding to 80% of the total demand) until 2018. We must next consider how to migrate from the present flat rate to dynamic pricing systems. 13