Analysis of Renewable Energy Installationwith Modelling of Electricity Supply System in Japan

Sammanfattning: The Great East Japan Earthquake and tremendous tsunami caused the accident of the Fukushima Daiichi Nuclear Power Plant in 2011. In response to this accident, the Japanese government stopped almost all nuclear power plants and shifted to an electricity supply system with slight nuclear power genration and mainly with renewable energies. As the result, the ratio of the electricity generation of fossil fuel power increased larger than 25 % to compensate the nuclear power genration although Japan almost totally depends on imports for fossil fuels. Nevertheless, renewable energy technologies have been slowly installed. Those energy conditions have required to immediately create a well-planned electricity supply system to construct an energy-secure and sustainable society. Therefore, the energy best mix with renewable energy technologies must be built to solve the problems. The process to realize the best mix is urgently required to propose with concrete policies. Policies should effectively give the electricity market incentive of enhancing renewable energy technologies, because private companies manage the electricity supply in the free market in Japan. The current carbon tax policy rules that the tax revenue from carbon tax is spent in the energy-oriented CO2 emissions restraint measures. However, the effects of this for the sustainable society are unclear for civilians. Some subsidies are currently provided to the renewable energy installation by both the government and private funds. However, the current installation capacity of renewable energy technologies indicates that they are not enough. Therefore, effects of the circulation of carbon tax and the subsidy for renewable energy technologies (tax-subsidy circulation) are analysed with actual and simple assumptions in this study.The amount of the subsidy depends on the carbon tax rate in this assumption. Therefore, six scenarios are assumed depending on tax rates and provision of the subsidy. The subsidy is assumed to be spent in capital costs and operation and management costs of renewable energy technologies. The electricity supply systems in each scenario are simulated using OSeMOSYS (Open Source Energy Modeling System). Changes in the electricity production, CO2 emission, cost, tax and the subsidy are analysed based on the simulation results.Although the policies without the subsidy can enhance the installation of renewable energy technologies, it costs the market expensive. On the other hand, spending the tax revenue in the subsidy for the renewable energies can make less monetary impacts on the market. Moreover, the renewable energy production is 10 % higher in HTS (High Tax and Subsidy)-Scenario than in LT (Low Tax)-Scenario. HTS-Scenario can restrict the cost less than LT-Scenario despite double increase of the tax rate, so that the impact on the industry and the impression for the customers seems relatively restricted. However, the tax-subsidy circulation does not suppose the CO2 emissions reduction. Furthermore, the intermittency risk tends to be high in the scenarios of high renewable energy ratio. Therefore, several scenarios are created to solve the problems. The first is to achieve the target of Paris Agreement. Although the simulation can be implemented to achieve the Paris agreement with slightly high cost, the policy is difficult to enforce to only limit the emission. The results of the scenarios above show that renewableenergy technologies in stalled in the beginning are not subsidised. Therefore, HPS (High Predicted Subsidy)-scenario assumes providing the subsidy beforehand as an advance investment. In addition that the renewable energy installation is promoted actively, the target of Paris Agreement can be achieved with slightly high costs. However, the decision of the price can lead economic problems such as the lack of financial resources. Therefore, the government should simultaneously promote to develop the storage technology to smooth the renewable energy generation. It also should promote to decrease the emission from the other sector like a transportation. Even if HPS-Scenario is too drastic to implement due to the extremely high tax, the tax-subsidy circulation with the advance investment is worth discussing as one option to create the sustainable society.