Japanese opportunities and goals
Last year, the Japanese Government declared the goal of carbon neutrality by 2050. For the realisation of this target, the Ministry of Economy, Trade and Industry (METI) issued a “Green Growth Strategy Through Achieving Carbon Neutrality in 2050” last December in collaboration with related ministries and agencies. This Strategy is an industrial policy to achieve the challenging goal of carbon neutrality by 2050 and aims toward a positive cycle of both economic growth and environmental protection. In the Strategy, decarbonisation of the power sector is regarded as the major premise. Approximately 40% of CO2 emissions in Japan derive from the generation of electricity. Boosting the installed capacity of renewable electricity sources such as solar and wind is regarded to be the primary course of action for the decarbonisation of electricity. Hydrogen is positioned as decarbonised fuel for adjustable electricity generation and the source of high-temperature heat for industrial applications, as well as fuel for transportation. The Strategy emphasizes the need for the creation of new industries for boosting decarbonisation. The following industries are expected to grow between 2030 and 2050: offshore wind power generation, fuel ammonia (burners for power generation) and hydrogen (turbines for power generation, steel making using hydrogen, carrier vessel, mobility power by either fuel cells or hydrogen engine, and water electrolysers).
In order to boost the transition to decarbonised energy sources by fostering new industry, the Japanese Government created a fund in an unprecedented scale of two trillion yen, and continues to support enterprises that attempt ambitious innovation for the next ten years. Existing research and development funded by the Government will be expanded, such as the benchmark of hydrogen for fuel in thermal power plants, hydrogen carrier technology, and hydrogen production from renewable electricity using water electrolysers.
Shared interest 1: Scenario for carbon neutrality with renewables and hydrogen
Towards the carbon neutrality target, the electrical power demand in 2050 is expected to increase by 30-50% compared with the current demand level by facilitating electrification in the industrial, transportation and household sectors, resulting in an annual power generation of 1300~1500 TWh. 50 ~ 60% of this amount (650 ~ 900 TWh) is expected to be generated by renewables. In 2020, approximately 200 TWh was generated by renewables, however, drastic expansion of renewable power generation capacity is mandatory to meet the goal in 2050. Limitation of land area available for solar and wind power generation imposes a severe impediment to such massive penetration of renewables. Offshore wind power generation is therefore regarded as a key technology. The Japanese Government will continue to pursue a capacity of 10 GW by 2030 and 30-45GW, including floating offshore wind, by 2040. Another severe constraint for the penetration of renewable power generation is the intermittency of the stability of the power grid. Japan’s electricity grid is not connected to those of its neighbouring countries, and adjustable power generation sources are essential to keep the balance between the demand and supply of electricity. Decarbonisation of thermal power plants, which is almost the only adjustable power generation source with substantial power generation capacity, is therefore the key for the supply of CO2-free electricity. In the Green Growth Strategy, the major route for decarbonising thermal power generation is carbon capture and storage (CCS), which will be applied to 30 ~ 40% of the total power generation. Hydrogen (or ammonia) fuelling for thermal power generation is expected to provide 10% of the total power generation, which needs 6.6 ~ 7.6 million tons of hydrogen. However, the capacity of CCS, or annual CO2 disposal by CCS, is subject of debate in Japan. Japan’s 2017 Basic Hydrogen Strategy expected 10 million tons of hydrogen used in 2050, corresponding to a power generation of approximately 200 TWh using hydrogen as fuel. The technology for power generation fuelled by hydrogen and ammonia is still in the stage of development and demonstration. Their use will depend on the state of establishment of technology and industry, and a fraction in power generation much greater than 10% will be mandatory for successful decarbonisation of electricity in Japan.
Shared interest 2: Scaling up the production of CO2-free hydrogen
Other than the use in power generation, transportation with commercial vehicles such as long-haul trucks, the electrification of which is difficult, is one of the areas in transportation field where hydrogen utilisation is expected. A potential domestic hydrogen demand of ca 6 million tons per year is anticipated. In addition, there is great demand in the steel industry. If coal, currently used as reduction agent of iron ore, would be replaced by hydrogen as a reducing reagent in the steelmaking sector, a large amount of CO2-free hydrogen would be needed. The potential domestic hydrogen demand is ca 7 million tons per year, with 100% hydrogen reduction steelmaking still to be technically established.
The demand for hydrogen in the abovementioned sectors, thermal power generation, transportation and material manufacturing, is expected to amount to approximately 20 million tons/year by 2050, with a cost of 20 yen/Nm3 (approximately 0.20 USD/Nm3). If this amount of hydrogen is produced solely by water electrolysis, 1000 TWh of electricity is necessary, which approximately corresponds to the annual total power generation in Japan. This value exceeds the amount of total renewable power generation in Japan in 2050 (650 ~ 900 TWh) predicted by the Green Growth Strategy. To illustrate geographical constraints for hydrogen production by 20 million tons/year using renewable energy, let us simply assume 1000 TWh of power generation by solar panels. Considering solar irradiance in Japan, a solar generation capacity of 900 GW is necessary which is larger than the cumulative installation of solar panels in an entire world. The necessary land area is approximately 100 sq km, which is hardly available in Japan. This is in accordance with the preference of offshore wind power generation in Japan’s Green Growth Strategy, which puts less emphasis on the on-land renewable power generation in Japan. On the other hand, 1000 TWh is available and affordable in Australia with 85 sq km. The shortage in flat land area for renewable power generation in Japan requires the import of hydrogen from overseas countries. One alternative is to produce hydrogen powered by offshore wind in the sea area around Japan. However, this option needs consideration of hydrogen costs compared with the case of importing hydrogen from abroad.
The condition of isolated islands prevents Japan from importing hydrogen from overseas countries through pipelines. Therefore, the Government has been supporting technology development and verification of marine transportation technology and infrastructure using liquefied hydrogen and MCH (Methylcyclohexane). As a result, Japan has the world-leading technology for hydrogen carriers, highlighted by the world’s first liquefied hydrogen carrier ship.
Japan’s Hydrogen Strategy has put lower priority on the source of hydrogen than the expansion of hydrogen utilisation and carrier technologies. So far, greater emphasis has been on the volume and cost of hydrogen, irrespectively of the origin of hydrogen. Needless to mention that there is concern about the impact of hydrogen on the reduction of total CO2 emission, and both blue hydrogen and blue ammonia from fossil resources coupled with CCS have been expected to serve as the initial tool to facilitate transition from infrastructures to the ones using CO2-free fuel. This is based on the belief that green hydrogen is far more expensive and the lead-time for its commercialisation is long. However, there is a fundamental concern about (1) the supply capacity of blue hydrogen: how much major CCS sites can absorb CO2 annually, and (2) the CO2 footprint associated with CCS. Unless there is a clear answer to these concerns, green hydrogen will be the only choice for the massive supply of hydrogen to meet the demand in Japan and the rest of the world. This fundamental discussion is still at a very early stage.
Shared interest 3: Further technological development for CO2-free fuel (ammonia and hydrogen)
Ammonia fuelling for thermal power generation
CO2 emission is reduced by 20% by co-firing of 20% ammonia (calorie-based) at one thermal power plant, therefore, if 20% co-firing is implemented at all coal-fired thermal power plants in Japanese major power companies, CO2 emissions by domestic electric power sector will be reduced by about 10%. Annual global production of ammonia is about 200 million tons worldwide, most of which is used as fertiliser and locally consumed. In the future, if 20% co-firing with ammonia is implemented for thermal power, ca 0.5 million tons of ammonia will be required annually for one plant (1 GW). To implement 20% co-firing at every thermal power plant in Japan, approximately 20 million tons of ammonia will be required, which is comparable to the current world trade volume. Formation of fuel ammonia supply chains separate from the one for conventional ammonia becomes an issue. It is of crucial importance for the decarbonisation of electricity that such ammonia for fuelling thermal power generation is CO2 free, because the existing ammonia production uses natural gas as a source of hydrogen and is never CO2 free. Therefore, this issue is related the production of hydrogen.
Hydrogen carriers: liquefaction and Methylcyclohexane (MCH)
Although liquefied hydrogen, Methylcyclohexane (MCH) and ammonia have been intensively developed by public funding, gas carrier’s transportation and receiving systems have not yet been widely established. Furthermore, importing low cost next-generation energy in large quantities would require securing resources overseas and developing ports of shipment, in addition to developing domestic infrastructure. Furthermore, there is a concern for inconsistency of regulations between countries, which needs to be overcome through international collaboration.
Hydrogen production by water electrolysis with renewable power
Owing to cost reduction of renewable energy and water electrolysers, it is anticipated that, in 2050, the costs of hydrogen from renewable sources will be lower than those from fossil fuel coupled with CCS. To meet the intermittency of renewable electricity, adjustability in the power input to electrolysers is of primary importance. Furthermore, the capacity of renewable power generation for hydrogen production will far exceed the existing grid capacity for the electricity supply to local communities when a large amount of hydrogen production, in the order of 10 million tons annually, is implemented, especially in areas with very small populations and abundant land area. Local electricity grids with gigawatt-scale capacity will be necessary which simply connect intermittent power sources with electrolysers. In such a situation, an issue will be how to keep the baseload electricity required to maintain electrolysers. In order to reduce hydrogen costs, the use of batteries needs to be minimised. Another fundamental concern is the use of rare metals in conventional electrolysers. The use of platinum and iridium needs to be minimised while accepting water in nearly neutral pH conditions. There is a huge demand for technological development which encourages international collaboration for research and development.
Certification of CO2 footprint on hydrogen
Although Japan has given green hydrogen less priority than the European countries and Australia, there emerges an increasing concern about the CO2 footprint of hydrogen. Quantification and certification of this value is an issue which needs an international framework. Pioneers of hydrogen in Japan are always watching the relevant momentum in the world and are eager to participate in the discussion.
- Japan’s Green Growth Strategy Through Achieving Carbon Neutrality in 2050, December 2020, METI, Japan (www.meti.go.jp/english/press/2020/pdf/1225_001b.pdf)
- Japan’s Basic Hydrogen Strategy, December 2017, METI, Japan (www.meti.go.jp/english/press/2017/pdf/1226_003b.pdf)