The Changing Energy Market in Japan

Transcription

1 1 Valmet Customers Days 2018 Energy Session 三菱 UFJ 信託銀行株式会社様 The Changing Energy Market in Japan 4 October 2018

2 JFE Group Est Est JFE Holdings (est. 2003) 45.93% 100% Net Sales (BillionJPY) Employees JFE Steel 391 9,300 Net Sales (BillionJPY) 2,715 Employees 44,500 Japan Marine United Net Sales (BillionJPY) 330 Employees 6,200 JFE Shoji Trade Net Sales (BillionJPY) 1,908 Employees 7,

3 JFE Engineering Business fields Others Industrial Machinery Water 6% 13% 14% 4% 6% Net Sales (billion JPY) 391 FY % 38% Environment Power Copyright 2017 JFE ENGINEERING Corporation. All Rights Reserved. Oil&Gas Steel Structure 3

4 Valmet and JFE s Cooperation Agreement Copyright 2017 JFE ENGINEERING Corporation. All Rights Reserved. 4 State of the art CFB and BFB technologies More than 250 references of fluidized bed boilers (up to 260MWe) Leading market position in Europe and North America JFE s presence in Japanese industry EPC capability of power plants (More than 100 plants references including WtE plants) Leading Industrial Boiler supplier in accordance with EBA (up to 50MWe for CFB) EBA: Electricity Business Act in Japan Cooperation Agreement (signed on March 2015) Right to sell in Japan given to JFE: CYMIC CFB Boiler HYBEX BFB Boiler

5 JFE s References of CFB Boilers On going Operated 100MWe Class 75MWe Class 50MWe Class 30MWe or below Projects to which CYMIC are to be applied Myojyo Cement 30MWe Taiheiyo Cement erex Ofunato 75MWe OJI Materia Nikko 70t/h IDI Kushiro 112MWe SANIX Energy Tomakomai 180t/hx2 Hachinohe Biomass 12.3MWe MPM OJI Hachinohe 75MWe Air Water Energia Onahama 75MWe EneVision Shimane12.7MWe erex Kyuden Mirai Buzen 75MWe Sigma Power Mikawa 50MWe Showa Shell 49MWe Mitsuuroko Green Energy Tsu 20MWe Iwakuni 10MWe Hokuetsu Kisyu Paper Kisyu 130 t/h erex Tosa 20MWe erex Saeki 50MWe erex Okinawa gas Uruma 50MWe 5

6 On-going Projects 6 IDI Kushiro 112MWe (2Q2020) MPM OJI Hachinohe 75MWe (3Q2019) Taiheiyo Cement erex Ofunato 75MWe (4Q2019) Air Water & Energia Onahama 75MWe (2Q2021) erex Kyuden Mirai Buzen 75MWe (4Q2019)

7 JFE s Market Shares in Japan 7 These shares are from Order Back-log as of September 2018, excluding the boilers smaller than 50MW: Number of Boilers SHI (FW) JFE & Valmet Andritz Doosan MWe SHI (FW) JFE & Valmet Andritz Doosan 6 % 6 % 18 % 41 % 12 % 45 % 35 % 37 %

8 Major Items Influencing Market 8 1 Items Causes Prospects FIT or Other scheme for Renewables Revision of FIT Auction for ordinary woody biomass introduced from FY2018. New scheme foreseen around FY Liberalization of Energy 3 Land Selection 4 Fuel New market system Division of Utility COs Grid connection availability Fuel supply sustainability Project sustainability in post-fit period New market system to be introduced base-load, capacity, carbon-free value until FY2020 Utility COs to be divided into power generation, grid, and retail company on FY2020 Grid connection rules to be revised for flexibility and fairness among potential power generators Bankable white pellets price to increase Demanding fuel to be utilized for cost reduction 5 Nuclear Power Restart of Nuclear Power Restarted reactors lower than government s target in FY2030 (Target: 20-25%, Prospects: less than 10%)

9 FY2017 Amendment of FiT Law (Biomass) (MWe) 16,000 14,000 12,000 10,000 8,000 FIT applications for biomass power plants is overheated because of the change of the tariff from 24 to 21 JPY/kWh for ordinary wood from FY2017. FIT-certified plants has been almost doubled against FY 2030 target. Woody Biomass Only, 1,950 MWe PKS with Woody Biomass, 5,160 MWe Diesel with Palm Oil, 4,360 MWe 14,730MWe 11,470MWe 20MWe or above MWe (363) 12,420MWe * Fiscal Year: April to March Ordinary Woody Biomass Unused wood, waste wood Waste, Methane fermentation (Number of Units) 6,020-7,280 MWe 6,000 4,000 2, ,010MWe 2,950MWe 20MWe or above 2,650MWe (104) 460MWe(72) Before Introduction of FIT 2,310MWe March 31, ,700MWe 290MWe(242) 590MWe(128) Before Introduction of FIT 2,310MWe March 31, MWe(354) Source: METI, Agency for Natural Resources and Energy 2,740-4,000MWe 610 MWe 1,400MWe RPS 1,270 MWe FY2030 Target 9

10 FY2018 Amendment of FiT Law (Biomass) 10 * Fiscal Year: April to March Auction (Tariff Competition) required for general wood-based biomass (e.g. PKS, imported pellets) with Gross Output of 10MWe; Capacity limit for FY2018: 200MWe (180MWe for solid biomass fuel) (JPY/kWh) Category Gross Output Wood Lumber General Wood-based biomass Construction Waste Municipal Waste etc 10MWe <10MWe 32 <2,000kWe 40 Auction

11 JFE s View of Future Market Nuclear and coal are expected to expand their share after But anti-nuclear and anti-coal movement will affect on this expansion Only gas and Biomass/WtE can substitute for them Generated power by fuel, Japan Uncertainty for Future Mix of Energy Nuclear Able to restart? Coal 15GWe to be developed until 2025 How anti-coal movement affect? Source: Bloomberg New Energy Finance 11

12 Cost Target of Biomass Power Generation Biomass Power Association (BPA) aims to reduce the cost of biomass power generation to 10JPY/kWh by FY Target cost of biomass power generation is less than cost of CCGT in FY $/MWeh real 250 Estimated Levelized cost of energy by fuel Present cost of 112MWe plant Onshore wind CCGT Target Cost Coal How to reduce cost of generation Fuel cost reduction Diversification of source of supply Utilization of demanding fuels (e.g., Waste-based fuel) Enhancements of thermal efficiency Scale Merit Utility-scale PV Source: Bloomberg New Energy Finance 12

13 Potential Demanding Fuels Cl (dry-wt%) 0,50 Municipal Solid Waste 0,45 0,40 0,35 Oil Palm Trunk Rice Straw Annual Recoverable Amount (est. Mt/yr) 300 0,30 OPT 100 0,25 0,20 0,15 0,10 0,05 0,00 Hinoki Cypress Acacia Pine PKS Eucalyptus Bamboo Bark Sugi Cedar Sugarcane Bagasse 0,0 0,1 1,0 10,0 EFB Rubber Tree Trunk Coconut Shell Fuel Source Orange: Domestic Blue: Overseas 50 Na+K (dry-wt%) 13

14 Pretreated EFB Pellets Testing Processing Empty Fruit Bunch Pretreated EFB Pelleted (Developed by Taiheiyo Cement Corp.) Combustion in pilot fluidized bed reactor to check: Fluidized bed behavior Primary emission High temperature corrosion risk Slagging and fouling Ash composition Valmet R&D Center Tampere Maximum mix of EFB pellets to be revealed for CFB boiler 14

15 JFE-Valmet Joint Development Program for Demanding Fuels 15 Co-development of technologies for demanding fuels with Valmet Multi-approach for chlorine and alkali-metal management in fuels Corrosive Material Monitoring Sootblowing Fuel Pre-treatment Boiler Additive Loop Seal Bed Material

16 Conclusion 16 The biomass power generation has emerged and boomed in Japan since the introduction of FIT scheme in FY However, the boom will fall within coming couple of years because of the revision of FIT scheme. Japan is at lost in energy mix after the nuclear disaster in Fukushima. Regardless of FIT, biomass/wte will take an important role to mitigate global warming effect as a realistic option in the future. Usage of domestic fuels are also considered as a benefit from biomass/wte.