Major power utilities face losses of over ¥1 trillion, the worst financial results since 2013
Wind farms are legal in Japan’s EEZ offshore area, says state panel while adding other key details for sector
METI to publish guidelines for supply chain carbon footprint measurements
ENERGY TRANSITION & POLICY
ANRE modifies bioethanol plan details following public feedback
Local govt asked to cooperate with search for nuclear waste site
Ministry outlines plan to create GX hub around Japan’s CCS site
Obayashi to forge carbon credits from NZ green hydrogen project
ENEOS to commercialize tech for shipping hydrogen in tankers
IHI introduces first use case for e-methane in Japan as bus fuel
METI to support R&D of turbine with high hydrogen blend ratio
Toyo Engineering trials green ammonia production in Chile
Suzuki to invest ¥2 trillion for 6 EV models
ELECTRICITY MARKETS
New FIT for rooftop solar for businesses to earn 20-30% more
Chubu Electric sees dramatic turnaround in financial results
FTC: unauthorized access to EPCO customer data potentially breaches antitrust law
Kansai Electric has unplanned reactor shutdown in western Japan
ANRE to allow retailers more flexibility over long-term contracts
No. of high-voltage contracts held by new power players shrinks
Sojitz plans major onshore wind plant in northern Japan
Tohoku Electric’s thermal plant sets Guinness record for efficiency
OIL, GAS & MINING
Toho Gas expects record profit after jump in LNG prices
LNG stockpiles decline 6% after a cold snap
INPEX exits from all tight oil business in Texas, U.S.
Global lithium titanium oxide battery market to surge to 2031
ANALYSIS
SYNTHETIC METHANE CAN HELP WITH STABLE ENERGY SUPPLY, BUT COSTS MUST FALL FURTHER
In November 2022, “e-methane” debuted at the Japan Gas Association with much fanfare. Amid all the excitement, the JGA even provided an “e-methane” logo to certify companies in the recycled carbon value chain, but that move was premature. No company has a timetable to commercialize synthetic methane. To understand its potential and challenges, Japan NRG spoke to leading companies in the industry.
A SMALL SOLUTION FOR A BIG PROBLEM: RESOLVING JAPAN’S GRID CONGESTION
As Japan plans more solar and wind capacity, attention is focusing on grid solutions to help accommodate the intermittency of some renewables. The big-picture vision in a recently released draft of the Power System Master Plan for 2050 calls for as much as ¥7 trillion in investments. There are solutions, however, that could bolster renewables without an entire system rebuild. One utilizes the same thing that generates solar and wind power in the first place: the weather.
New Energy and Industrial Technology Development Organization
kWh
Kilowatt hours (electricity generation volume)
TEPCO
Tokyo Electric Power Company
FIT
Feed-in Tariff
KEPCO
Kansai Electric Power Company
FIP
Feed-in Premium
EPCO
Electric Power Company
SAF
Sustainable Aviation Fuel
JCC
Japan Crude Cocktail
NPP
Nuclear power plant
JKM
Japan Korea Market, the Platt’s LNG benchmark
JOGMEC
Japan Organization for Metals and Energy Security
CCUS
Carbon Capture, Utilization and Storage
OCCTO
Organization for Cross-regional Coordination of Transmission Operators
NRA
Nuclear Regulation Authority
GX
Green Transformation
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NEWS:OIL, GAS & MINING
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ANALYSIS
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GLOBAL VIEW
BY JOHN VAROLI
Below are some of last week’s most important international energy developments monitored by the Japan NRG team because of their potential to impact energy supply and demand, as well as prices. We see the following as relevant to Japanese and international energy investors.
Commodities
High interest rates and prices, as well as changing trade patterns, have made the global flow of raw materials more costly to finance. The industry will have to come up with an extra $300 to $500 billion in financing to maintain current trade levels, says a report by McKinsey.
EU/ Wind power
This year will be difficult for the wind industry, as high costs and slow approvals for new projects will drag on profits. For example, Danish wind turbine maker Vestas said that the slow EU planning system and supply chain inflation is depressing profits.
Hydrogen power
ExxonMobil plans to invest $7 billion in hydrogen, carbon capture and biofuels through 2027. Its Texas facility is expected to produce 1 bcf of blue hydrogen daily. Exxon plans to bury 98% of the CO2 emitted, about 7 million metric tons annually.
Libya/ Natural gas
The National Oil Corporation and Italy’s Eni agreed to develop gas production for Libya’s domestic market and for export to the EU. The $8 billion “Structures A&E” is the country’s first major project in two decades, and consists of two offshore gas fields and a CCS facility.
Norway/ Oil and Gas
In 2022, a record-breaking 24 oil and gas projects were approved, reports Rystad Energy. This means a total pipeline of 35 projects were approved in the last 2.5 years, with investment totalling $43 billion. About 25 bcm of additional Norwegian gas will be online by 2028.
Oil profits
Shell reported a record $39.9 billion profit in 2022, double last year’s total and the highest in its 115-year history. ExxonMobil had a $56 billion profit in 2022, its largest ever. Chevron had a $36 billion profit. The White House condemned Big Oil’s profits as “outrageous”.
Oil rigs
In 2022, offshore rig activity rose in several key regions. Global marketed jack-up utilization increased from 87% in January to 91% in December. The Middle East garnered all the jack-up attention, with over 60 new contracts from Saudi Aramco and ADNOC Offshore.
Oil and gas exploration
Consulting firm Wood Mackenzie said worldwide fossil-fuel exploration in 2022 hit the highest levels in over a decade, and the discoveries include many “higher-quality hydrocarbons” that will require less new infrastructure and expenditures.
Philippines/ LNG
The Department of Energy approved a $67 million LNG import terminal, the country’s seventh such facility. The Philippines needs LNG imports to fuel its gas-fired power plants that have a combined capacity of more than 3 GW.
Saudi Arabia/ Hydrogen power
The government will invest up to $267 billion on “cleaner energy”, with the goal of becoming the world’s leading exporter of clean hydrogen. The funds will go to build production, transport lines and distribution networks to facilitate the export of clean hydrogen.
Türkiye/ LNG
Türkiye signed an agreement with Oman to buy 1.4 bcm of LNG annually for 10 years. Türkiye and Bulgaria also signed an agreement to transport up to 1.5 bcm of natural gas a year for a 13-year period.
2023 EVENTS CALENDAR
A selection of domestic and international events we believe will have an impact on Japanese energy
ASEAN-Japan summit to mark 50 years of cooperation
Last market trading day (December 30)
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NEWS
・Major power utilities face losses of over ¥1 trillion, the worst financial results since 2013
・Wind farms are legal in Japan’s EEZ offshore area, says state panel while adding other key details for sector
・METI to publish guidelines for supply chain carbon footprint measurements
