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METI to raise target for independent development ratio of oil and natural gas

  • March 12, 2021
  • , Nikkei , p. 5
  • JMH Translation

A sub-committee of the Advisory Committee for Natural Resources (an advisory committee of the Minister of Economy, Trade and Industry (METI)) was held on March 11 to discuss measures to ensure a stable energy supply. METI presented its policy to raise Japan’s independent development ratio of oil and natural gas and discussed the development of a society in which decarbonization can coexist with a stable power supply. Details of these issues will be further discussed for inclusion in the next Strategic Energy Plan, to be formulated in  the summer of 2021.

 

The independent development ratio is calculated based on the amount imported from oil and natural gas fields whose interests are owned by Japanese companies. The target for the independent development ratio in the current energy plan is a minimum of 40% by 2030. A ratio of 35% has already been achieved due to progress in natural resource development by both private and public sectors. From the standpoint of ensuring a more stable energy supply, METI prioritized the issues of raising the independent development ratio and boosting acquisition of overseas energy rights. 

 

METI raised the promotion of new investment in power sources as an issue to help ensure a stable power supply. The Japanese government intends to expand the use of renewable energy to achieve a decarbonized society. The importance of such stable energy sources as coal-fired power will increase to augment fluctuations in power generation due to weather. The market value of power has fallen due to deregulation. There is a danger that there will be no return on investment on new power plant construction. Details of designing a system that covers initial costs will be discussed later.

 

The sub-committee also discussed the three basic pillars of Japan’s energy policy: Stable supply, economic efficiency, and environment-friendliness. Based on the premise that stable energy supply is a precondition to maintain the economy and society, the meeting proposed that a stable power supply was of upmost importance, acknowledging the electricity shortage this past winter. Many sub-committee members agreed.

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