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Hydrogen, ammonia to account for 10% of Japan 2050 energy mix: METI proposal

Highlights

Procuring 300,000 mt/year of hydrogen for power by 2030

Japan's 2020 hydrogen procurement costs at Yen 170/normal cu m

1 GW coal-fired unit would require 500,000 mt/year ammonia

Tokyo — Japan's Ministry of Economy, Trade and Industry unveiled Dec. 21 a proposal for the country's 2050 energy mix as the country gears up to achieve carbon neutrality by 2050, with hydrogen and ammonia accounting for about 10% of the power generation mix in 30 years, from zero currently.

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The proposal, presented during METI's strategic policy committee at its advisory committee for natural resources and energy, notes that a 10% share of hydrogen and ammonia in Japan's power generation mix would require annual hydrogen procurement volumes of about 5 million-10 million mt in 2050.

The proposal, which also includes METI's proposed share of other energy sources in Japan's 2050 energy mix, will be used as part of its policy discussions to review country's Strategic Energy Plan after the strategic policy committee finalizing its few scenarios by the end of March 2021, a METI source said.

Currently, Japan aims to procure 300,000 mt/year of hydrogen, amounting to 1 GW of power generation capacity, and reduce the cost of hydrogen to Yen 30 ($0.29)/normal cubic meters by around 2030 as part of its basic hydrogen strategy set in 2017.

Hydrogen costs

In 2020 Japan's hydrogen procurement cost estimates stand at about Yen 170 ($1.64)/normal cu m based on current technologies, METI said Dec. 21, aiming to bring it down to Yen 30/normal cu m in 2030 and Yen 20/normal cu m in 2050.

METI also noted Japan's current 100% hydrogen power generation costs are estimated at Yen 97.3/kWh and Yen 20.9/kWh for 10% blending of hydrogen with regasified LNG for power output.

Ammonia's power generation costs, meanwhile, were estimated in 2018 at Yen 23.5/kWh for 100% burning, with 20% blending of ammonia with coal at Yen 12.9/kWh, according to METI documents presented at the meeting.

In the event of burning 20% of ammonia with coal, Japan would need about 500,000 mt/year of ammonia per 1 GW coal-fired unit, according to the METI documents.

Japan's ammonia demand could become equivalent to the current global trade volume of 20 million mt/year if Japanese power utilities burn it for 20% of their 39 GW coal-fired power generation capacity, it noted.

Ammonia, a compound consisting of three parts hydrogen and one part nitrogen, contains about 18% hydrogen by weight and is already a widely traded chemical globally, and it releases zero CO2 emissions when combusted in a thermal power plant.

The 2017 hydrogen strategy noted that Japan should aim to procure 5 million-10 million mt/year of hydrogen, accounting for 15-30 GW of power generation capacity, in a future to boost to the competitiveness of the prospective fuel, without setting the timeline of the target at the time.

Energy mix review

The proposal to introduce hydrogen and ammonia in Japan's energy mix came to light as METI launched a series of policy discussions Oct. 13 to review the country's Strategic Energy Plan aimed at scrutinizing the progress toward the 2030 energy mix.

The idea also notes that renewable energy should account for about 50-60% of Japan's 2050 energy mix, with nuclear as a carbon-free source, together with fossil fuels, with carbon capture, utilization and storage (CCUS), and carbon recycling, accounting for 30-40% of the energy mix.

Under the current strategic energy plan, Japan aims to reduce its share of fossil fuels in the energy mix for power generation to 56% by fiscal 2030-31 (April-March), compared with 77% in fiscal 2018-19, in return for boosting its share of nuclear and renewable energy.

Nuclear energy accounts for 22-20% of the energy mix in fiscal 2030-31, up from 6% in fiscal 2018-19, while the 2030-2031 renewable energy will be up to 22-24% from 17% in the fiscal year to March 2019.

The 2030-31 fossil fuels share comprises 27% of LNG, 3% of oil and 26% of coal, compared with the 2018-19 share of 38% of LNG, 7% of oil and 32% of coal.

The Great East Japan Earthquake, which rocked offshore Fukushima in northeastern Japan in March 2011 and caused subsequent nuclear outages in the country, prompted Japan to undergo a major review of its energy mix for power generation.