Future impacts of Nuclear on the Asian Natural Gas Market

Transcription

1 Future impacts of Nuclear on the Asian Natural Gas Market - A Case Study in Japan- Feb 15th 216 5th IAEE Asian Conference Hisanori Nei Professor National Graduate Institute for Policy Studies Japan

2 Future Energy Market 5 Jul-215 Henry Hub Dec-215 Jun-213 Feb-215 Apr-214 Sep-214 Nov-213 Jan-213 Dec-21 Oct-211 Aug-212 Mar-212 May-211 Jul-21 Dry shale(bcfd) WTI Primary Energy Demand by Top 1 Countries Mtoe 45 (by Energy Balance of OECD Countries etc.) U.S. OECD Europe Japan year source: New Policy Scenario of WEO 215 by IEA China India Other Developing Asia China U.S.A India Rossia Japan Germany Brazil South Korea France Canada World OECD Feb-21 Jun-28 LTO(mbd) Primary Energy Demand by Region Mtoe Sep-29 Nov Apr-29 (source: EIA statistics) Jan-28 Under the low energy price condition, future market opportunity is still in Asia Crude and NG price and production in U.S.A.

3 Natural gas demand has increased steadily in these years. Nuclear supply has been stagnated in this century. Can NG push nuclear out from future energy market in Asia? Primary Energy Demand by Sources (Energy Balance of OECD countries etc.) Primary Energy Demand by Sources Mtoe 2 (New Policy Scenario of WEO 216 by IEA) Oil Coal Natural Gas 2 Nuclear Hydraurlc Renewable/Waste 16 Share of Energy Supply by Sources 14 (Energy Balance of OECD countries etc.) 12 1% 11.2% 9%1.9%.5% 8%16.2% 7% 1 8 6% 26.1% 5% 6 1.3% 2.1% 2.6% 16.% 17.1% 24.6% 24.8% 4% 4 3% 2%44.1% 46.2% 43.1% % % % 1.8%.9% 213 Coal 22 Oil Gas 225 Nulear year Hydro 23 Bioenergy 235 Renewables 24 Oil Coal 1.3% 2.1% 6.% 1.3% 2.2% 6.7% 9.9% 2.2% 6.3% 1.1% 2.3% 5.6% 1.1% 2.3% 5.2% 1.2% 2.4% 4.9% 19.1% 2.7% 2.6% 21.4% 21.5% 21.5% 25.5% 23.5% 26.% 28.2% 29.1% 29.3% 37.% 36.5% 35.% 32.3% 31.8% 31.8% Natural Gas Nuclear Hydraurlc Renewable/Waste

4 There are scenarios if Nuclear supply expands, share of natural gas should shrink. <Reasons> /Once nuclear capacity installed, the operation cost is rarely affected by fuel prices. /Nuclear supply is recognized as base load capacity. /Natural gas should compete with coal in the power market based on fuel cost % % % % % Total 213 Total Gas 23 Gas 45 Nulear 24.% Nuclear Total 45 Primary Energy Demand by Sources (New Policy Scenario VS 45 Scenario of WEO 215) by IEA Mtoe Primary Energy Demand in China Mtoe (total) Gas Nuclear Total Gas Primary Energy Demand by Sources in India Mtoe (total) Nulear Mtoe Total Gas Nuclear Total Gas Nulear

5 /There are 422 nuclear reactors with GW capacity in the world. (as of Feb. 216) /There are 66 reactors with 65 GW under construction. /Nuclear program is heavily rely on the energy policy of each countries. (ex. Share of nuclear in the power market differ country by country.) Nuclear Capacity by Countries PRIS by IAEA) Nuclear Power Generation by Countries Number (PRIS by IAEA) USA France Japan China Russia Korea India Canada Ukraine UK Sweden Germany Spain Belgium Taiwan Czeck Switzerland Finland Hungary Slovakia Argentina Pakistan Bulgaria Brazil South Africa Mexico Romania Iran Slovenia Netherlands Armenia 9 share generation Mw Capacity Under Construction Nuclear Capacity by Countries MW (PRIS by IAEA) Number Capacity

6 Nuclear Development after the Fukushima Daiichi NPS Accident Nuclear Development Policy differ across countries. A. Phase out /Germany Phase out by the end of 222 /Belgium Phase out by 225 /Switzerland Phase out by 234 (no operation after designed life) /Taiwan Suspend to operate new capacity B. Maintain 1 /U.S.A. under severe competition with low cost NG 8 /France New energy law cap nuclear capacity C. Expansion 6 /Russia Increase to 5GW by /Korea Increase capacity to 29% of installed one by /China Increase capacity to 58GW by 22 /UK Introduce contract-for-difference D. New Comer -2 /UAE, Vietnam, Turkey Worldwide Barometer of Views on Nuclear (Source:Gallup Survey) Favor Unfavor

7 /Low Natural Gas price suffer nuclear economy in U.S.A. /It forces some aged NPS s retired. /NG price in U.S.A keep low for next couple of years. /NG winner, Nuclear loser in U.S.A. market. How about in Asia? /In Asia, Natural Gas price has maintained higher than the other region. /It allows nuclear development rather profitable. /Once a NPS reactor connect in the grid, natural gas producers lost potential market at least 4 years. /5 years after the Fukushima, Nuclear Industry has overcomed almost all issues to be solved. /Situation about nuclear development has changed very little. Natural Gas Price Differenc by Regions (source:imf commodity price data base) Shale Produntion(ｂｃｆｄ Russian Natural Gas in Germany Indonesian LNG in Japan Henry Hub LTO(mbd) Dry shale(bcfd) Henry Hub Nov-215 Sep-215 Jul-215 May-215 Mar-215 Jan-215 Nov-214 Sep-214 Jul May Mar Jan-214 2M1 2M9 21M5 22M1 22M9 23M5 24M1 24M9 25M5 26M1 26M9 27M5 28M1 28M9 29M5 21M1 21M9 211M5 212M1 212M9 213M5 214M1 214M9 215M Nov Sep Jul May Mar Crude and NG price and production in U.S.A (source:eia statistics) Jan-213 ドル/MMbtu WEO 214 WTI

8 Japan is the 3rd largest Economy and consuming 5th largest volume of energy After Fukushima(211), energy consumption has decline 4 consecutive years. Last 3 years, Japanese economy has recovered by the Abenomics In 214, House sector shows most rate of reduction in energy demand mtoe Primary Energy Supply by country 35. Final Energy Consumption & GDP Industry Business Home Transpot GDP(Real25)TY GDP(Nominal) 4 China US Russia India Japan Canada Germany Brazil

9 In 214, we had no nuclear power supply. It s the first time since It result in constant increase of electricity tariff. Primary Energy Supply by Sources EJ Oil Coal Natural Gas Nuclear Hydro Renewable PRIMARY ENERGY SUPPLY BY SOURCES 1% 8% 6% 4% Nuclear Hydro Renewable Natural Gas 25 Coal 24 Oil % %

10 Natural Gas (LNG) has been major alternative power sources. Thanks producers especially Qatar for the generous increase of LNG export to Japan. We lost about 3Gkwh by nuclear and import about 15Mt LNG additionally. LNG import by country in Japan (source: Trade Statistics) U.S.A Brunei UAE Indonesia Malaysia Australia Qatar Oman Nygeria Equatorial Guinea Russia Others Total

11 Japan is still heavily depending on imported crude from ME WTI,brent spread 3 Bre 2 1 Sprea -1-2 Crude Oil Import by countries (source: oil products statistics) -3 WTI Oil Production by Countries and OPEC quata May 2, 1987 Jul 26, 1988 Sep 25, 1989 Nov 26, 199 Jan 28, 1992 Apr 1, 1993 Jun 21, 1994 Sep 1, 1995 Nov 13, 1996 Feb 5, 1998 Apr 23, 1999 Jul 13, 2 Sep 2, 21 Dec 9, 22 Feb 24, 24 May 5, 25 Jul 19, 26 Sep 28, 27 Dec 5, 28 Feb 16, 21 Apr 21, 211 Jul 1, 212 Sep 16, 213 Nov 2, Saudi 7 Iran 75 UAE 8 other ME 85 9 China 95 Indonesia 2 Rossua 5 1 Others 13 ME% OPEC Canada Russia United States Saudi Arabia World OPEC quata

12 GOJ concluded its energy mix at 23 (July 215) Primary energy supply Energy demand 489 million kl 361 mi kl Electric power 25% Heat, gasoline, town gas, etc. 75% 213 (Actual result) Renewable energy 13 to 14% Economic growth 1.7%/year 5.3mkl 15%(13%) Final energy consumption 326 m kl Electric power 28% Heat, gasoline, town gas, etc. 72% 23 (After energy conservation measures) Nuclear power 1 to 11% Selfsufficiency rate 24.3% Natural gas 18% Coal 25% LPG 3% Petroleum 3% 23 values are approximate 12

13 Power demand Economic growth 1.7%/year Electric power billion kwh 213 Power source composition 1,278 billion kwh billion kwh 2%(17%) 4%. Electric power 98.8 billion kwh 23 Energy conservation 17% (Total generated energy) 1,65 billion kwh Geothermal 1. to 1.1% Biomass 3.7 to 4.6% Renewable energy 19 to 2% Renewable energy 22 to 24% Wind power 1.7% Nuclear power 17 to 18% Nuclear power Approx. 2 to 22% Hydroelectric 8.8 to 9.2% LNG 22% LNG 27% Coal 22% Coal 26% Petroleum 2% Petroleum 3% Solar power 7.% Base load ratio: 56% 23 values are approximate 13

14 /Historically, between 196 and 198, actual energy consumption had been lower than planed energy outlook. /From late 8s, it had been difficult to lower energy demand than planned outlook by 28. Primary Energy Supply Feb-67 Jul-7 Aug-75 Jun-77 Jun-77 Aug-79 Apr-82 Nov-83 Oct-87 Oct-9 Jun-94 Jun-94 Jun-97 Jun-97 Jul-1 Jul-1 Mar-5 Mar-5 Mar-5 May-8 May-8 May-8 Aug-9 Aug-9 Aug-9 Jul-15 actual

15 Supply Share of Natural Gas is varied by countries. Japan maintain the largest volume of Import. After the Fukushima Nuclear Accident, Japan increase its NG import from 75Mt to 9Mt/year If NPS resume as expected, import volume will decrease to previous level. Supply Share by Sources - Gas Production 1% mtoe 9% % 6. 7% 5. 6% 4. 5% 4% 3. 3% 2. 2% 1. 1% % Natural Gas Import by countries BCM Oil Natural Gas Coal Nuclear Energy Hydro electric Renew- ables Gas Production Pipelin Import LNG import

16 /Fuel Price difference make difficult to increase Natural Gas Power Units /Utilities consider to build new NG Power Unit as well as Coal ones. /Under the future liberalized power market, many smaller (less than 112.5Mw) coal power plants are planned to build Import Fuel Price Changes in Japan (CIF) Yen/tkcal Coal Mkw 214 New Add Hydro Normal Pumped-Strage Thermal Coal LNG Oil Nuclear Renewable Wind.9.2 Photovoltaic Others Total Abolish LNG Crude COMPOSION OF POWER PLANT BY UTILITIES Hydro Coal LNG Oil Nuclear Renewable 2.3% 17.2% 2.2% 15.8% 17.3% 15.8% 28.9% 31.2% 15.7% 16.8% 18.7% 18.2%

17 After Fukushima, new regulatory system and severer safety standards are implemented. Reform of Nuclear Regulatory Organization /Independence Separate the functions for nuclear regulation and nuclear promotion Establish the Nuclear Regulation Authority(NRA) as an independent commission body Amendments to the Nuclear Regulation Act /New regulation on severe accidents /Regulation based on the state-of-the art information (backfiting) /4-years operational limit for NPPs (exceptional less-than-2 years extension) New Regulatory Requirement Principle of Regulation /Strengthening of Design Basis /Place emphasis of Defense-in-Depth /Severe Accident Measures /Eliminate common cause failure /Enhanced Measures for Earthquake/Tsunami /Protective measures for extreme natural hazards

18 Strengthening of Design Basis /Comprehensive consideration of natural hazards including volcano, tornado and forest fire in addition to earthquake and tsunami, etc /Reinforcement of fire protection measures /Enhanced reliability of SSCs important to safety (e.g. Redundancy of piping) /Reinforcement of off-site power supply (connection to different substations through multiple lines) /Protection of systems for Ultimate Heat Sink

19 There are 1s of mobile equipment provided in NPSs Resilience for AC power supply

20 Strengthen Requirement of Counter Measures for Severe Accident (SA) Prevention of Core Damage (ATWS, Loss of RCF RDF UHF etc.) Prevention of Containment Failure (CV spray, Filtered venting etc.) Prevention of hydrogen explosion at reactor building etc. Cooling at SFP Prevention of fuel damages during shutdown Emergency Response Center

21 Resilience for CV cooling

22 Enhanced Measures for Earthquake/Tsunami Tsunami More Stringent Standards on Tsunami /Define Design Basis Tsunami Exceeds the largest in the historical records Enlarged Application of Higher Seismic Resistance /SSCs for Tsunami protective measures such as Tsunami Gate are classified as Class S equivalent to RPV etc. Earthquake More Stringent Criteria for active faults /Active faults with activities later than the Late Pleistocene be considered for seismic design /Active in the Middle Pleistocene be investigated if needed More Precise methods to define seismic ground motion /3D observation of geological structure on the site Displacement and Deformation Class S buildings should not be constructed on the exposure of active faults

23 Resilience for Water Injection & Tsunami Motor driven pump Mobile Water Injection Pump Water Proof Door

24 Resilience for H2 Accumulation Hydrogen Passive Autocatalystic Recombiner Heated Igniter

25 Process of Resuming Nuclear Power Plant in Japan NRA Licensee Permit Assessment of Change in Reactor Installation Request Local Government Approval Approval Permission Submit Tech-Spec Construction Reactor Installation Approval Safety Agreement with Licensee Submit Approve Change of Construction Plan Submit Approve Change of Tech-Spec Construction Inspection Approve Operation

26 POLL FOR NUCLEAR Yes Probably Yes Yes or NO Probably No No Others

27 Shutdown Period in Major NPS troubles shows little difference between Fukushima and the others /Fukushima Daiichi(211) Sendai NPS Unit 1 resuming 25 months after new regulation guideline set, 36 months after NRA establishment, 36 month /Kashiwazaki Kariwa(27) 25 month to 45 month more after the earthquake (Unit 6-7, Unit1, Unit5) *Unit 2-4 never operated since then /Shika Criticality event hiding (27) 25months after stopping for inspection /Hamaoka & Shika Turbine Missile(26) 8 month to 2 month after the accident /Onagawa Earthquake(25) 7 month to 21 month after the scram /Mihama Unit 3 accident (24) 32 month after the accident /Fukushima Daiichi Falsification (22) 4 month after stopping for inspection /Monju (FBR) (1995) 178 month after the accident

28 There are 43 Units with Mkw NPS registered in Japan NPS total Capacity at the Accident 54 units 48.96Mkw Fukushima-Daiich 6 units 4.696Mkw in decommission process 5 first generation NPS with) 2.216Mkw in decommission process 25 NPSs in 15 sites submit TA report to NRA Mkw Sendai Unit1, 2 resumed 1.78Mkw Takahama Unit3,4 approved and be resumed quite soon 1.74 Mkw Ikata Unit 3 approved and be resumed soon.89 Mkw Kashiwazaki Kariwa Unit 6, 7 final process of approval Tomari Unit 3 enter the final process of approval.912 Mkw Shimane Unit 2 enter the final process of approval.82 Mkw Genkai Unit 3,4 enter the final process soon 2.36 Mkw Ohma Unit 3, 4 midst of the process and see others 2.36 Mkw Hamaoka Unit3, 4 midst of the process and under construction Mkw Onagawa Unit2 midst of the process and under construction.825 Mkw Tokai Daini midst of the process and under construction 1.1 Mkw Tomari Unit1.2 reviewed after Unit Mkw Tsuruga Unit 2, Higashi dori Unit1, Sika Unit 2 fault line issues 3.466Mkw Takahama Unit1,2 4years review by July Mkw Mihama Unit 3 4years review by Nov Mkw Tomari Higashidori Tsuruga Takahama Mihama Kashiwazaki-Kariwa Onagawa Shika Fukushima-Daiichi Ooi Fukushima-Daini Shimane Tokai-Daini Genkai Sendai Ikata Hamaoka

29 18 NPSs with Mkw not submitted TA to NRA yet / Fukushima Daini Unit1-4 with 4.4 Mkw difficult to get local government approval /Kashiwazaki Unit 1-5 with 5.5 Mkw submitted after Unit 6,7 approved (Unit 2-4 never operated since 27) /Hamaoka Unit 5 with 1.38 Mkw submit soon after fixing sea water contamination /Onagawa Unit 1, 3 with 1.348Mkw submit after Unit 2 approved /Shika Unit 1 with.54 Mkw submit after Unit 2 approved /Ikata Unit 1,2 with Mkw submit after Unit 3 resumed /Ooi Unit 1.2 with 2.35 Mkw submit and challenge 4 years review after the others /Genkai Unit 2 with.559 might submit after Unit3.4 resumed 2 NPS under construction /Ohma NPS with submitted TA to NRA /Shimane Unit 3 with Mkw (93% completed) submitted after Unit 2 resumed

30 Estimation for NPS supply recovery /NPS supply will recover by 22 exceeding the target of the outlook in 218 /If NRA reject the proposed TA related with fault line assessment, it still exceed the target. /If NRA agreed the fault line assessment, It will exceed the lever of before the accident /It reduce LNG demand about 15 to 2 Mt/year Nuclear Capacity & Electricity Generation Capacity Approved 214 Case Case3 217 Electricity Case2 22 Case3 221 target low target high 224

31 Under the New Regulatory System, after 4 years from now, NPs in Japan have capability to produce more electricity than before the Accident. Capacity & Power Generation in Japan Capacity Ratio Capacity Electricity Capacity & Power Generation in Japan (Faultline Severe Case) Capacity & Power Generation in Japan (Faultline&4years Severe Case) Capacity Electricity Capacity Electricity 212

32 After years, power supply by NPS in Japan will recover. /NRA develops standard review process. -Sendai Unit1,2 133 days, 67 public meetings, 593 discussion meetings -Takahama Unit 3,4 15days, 62 PM, 413 DM -For BWR, Kashiwazaki is the model of standard review process /Major Reason of low capacity ratio in Japan since 2 -Earth quake ground motion exceed design base 4 times(24,26,27,29) - Falsification issues(22,26), Material troubles (25,26, 27-8) We need to consider next issue challenged by the industry. /NRA s permission for over 4 Years Operation NPS in 216 Takahama Unit 1,2 need to get approval by July 216 Mihama Unit 3 by Nov. 216 There is no fundamental technical issues to get approved. Kansai PC should prioritize /EDMG facility by 218 /Longer Post-Outage Period after 217 /New NPS development

33 Longer operation cycle can be implemented some time soon. NPS Operation and Inspection in Japan 2-3 month Normal Operation within 13 month 2-3month Normal Operation within 13 month Outage Regular Outage Inspection Ajustment Operation(25days) Periodic Retest ECCS ECCS pump Emergency Emergency DG Regular Outage Inspecti on Periodic Safety Inspection Safety Surveilla nce Regular Outage Periodic Retest Inspecti ECCS ECCS pump on Emergency Emergency DG New NPS construction at Sanmen China(Nov. 215) How about in Japan. 33

34 Conclusion /Almost 5 Years has passed after the Fukushima-Daiichi Nuclear Accident /Right after the accident, it caused delay of new nuclear development or phase-out movement in some countries. /Lately there are several new positive outcome observed. -Shin Kori-3 Connected to the Grid -Cold function tests have been completed at unit 1 of the Taishan nuclear power plant in China -Main AP1 pumps (RCP) pass qualification tests -Sendai NPS resumed in Japan. Takahama 1,2 enter the final process of 2 Years extension approval. /In U.S.A, NPSs struggle to compete with cheaper Natural Gas. /In Asia, higher Natural Gas price allows nuclear development much easier. /If Natural Gas producers expect to maintain higher price formula for next couple of years, they lose potential market for at least another 4 years.