Japan's Power Market News 2023/W10

OCCTO produces a revised transmission masterplan.

At the end of January, OCCTO released a draft of its 2023 masterplan for Japan’s transmission system. It builds on the 2021 version in which four scenarios were considered, two based on the development of 45GW of offshore wind by 2040 and the integration of 50-60% of #renewables into the Japanese energy mix by 2050 - in line with METI’s 6th #energy plan. In this previous iteration, the national average curtailment of renewable assets could reach up to 39% due to limits in the transmission system.?

In this year’s version, OCCTO focuses on defining scenarios that integrate power demand closer to the main renewable generation clusters. It has created three new scenarios that include #hydrogen production, direct air capture, CCS, and demand response capabilities at different distances from the main renewable generation centers. Based on these new scenarios, OCCTO has developed a new plan for reinforcing regional grid interconnections that is more expensive than the previous one. In its 2021 masterplan, the interconnection reinforcement costs totaled between 1.5 and 4.8 trillion JPY. The latest draft places the cost between 6.0 and 7.9 trillion JPY.?

The planned connection between Kyushu and Shikoku would be abandoned, while a new 2.8GW HVDC connection between Kyushu and Chugoku would be added.?Renewable power from Hokkaido would flow to the big consumption center of Tokyo, while renewables produced in sunny Kyushu would target consumers in Kansai and Chubu.?

OCCTO’s new draft plans also allow for a 50% increase in power demand compared to today.

This would come from an additional 260TWh of electrification, mainly in the form of EVs and heat pumps, as well as 180TWh for hydrogen production and direct air capture.?OCCTO’s exercise gives some insights into the potential future evolution of the Japanese grid but is limited by its top-down approach. It assumes that METI’s 2050 target energy mix is realized and adds additional power demand (Hydrogen and DAC) and demand response assumptions to minimize renewable power curtailment. It doesn’t approach the evolution of the grid and energy mix from a commercial perspective, nor does it consider any physical constraint on materials that could limit the deployment of assets.?

Sources: OCCTO’s update on its 2023 interconnection masterplan draft, OCCTO’s 2021 masterplan

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