Absolutely. Thanks for outpointing. There’s much of interest from the ICEF conference, including the well-worth-watching response to Smil by Rystad Energy CEO Jarand Rystad, later in the same session I linked to.
Thanks Walter, and happy new year. I’m interested in your thoughts on this, actually: If and when Japan discovers that green hydrogen is going to be too expensive as a pathway to decarbonizing the power sector, what do you figure will the response be? Simply continue as generating electricity as is and fall (further) behind on decarbonization? Up the imports of LNG? Build wind, solar, geothermal at a faster pace? Somehow speed up the use of nuclear, primarily with new build? What think?
Yeah these are excellent questions. As it stands now, METI's 7th Strategic Energy Plan (now in public comment until 1/26) maintains the same hydrogen price & consumption targets for 2030, 2040 and 2050. So at least on the outside, that signals a refusal to acknowledge the difficulty of bringing the cost of green H2 down.
But as you suggest, reality isn't on the government's side, especially with many Japanese companies losing hope in a key Japan-Australia hydrogen project (https://thediplomat.com/2024/12/the-end-of-japans-hydrogen-rush-in-australia/). These same companies are turning to domestic production instead, so I think that'll be part of the response.
The other response would be to continue partnering with hydrogen producers in other markets in the Middle East and Asia. I think some of these will be green H2, most will be gray H2 with semi-credible promises to become blue H2 in the future.
The key to all of the above will be the contract-for-difference scheme that officially began accepting applications late last year -- it'll be interesting to see how well that subsidy will work in bringing H2 projects (domestic and overseas) to fruition.
While I am dubious that hydrogen (imported as ammonia) will be a major component of Japan’s future energy system, it will be essential for reducing emissions from steel production (DRI) and for producing replacing fossil fuel based ammonia in the agricultural system. You’re probably right that Japan will muddle forward….
Agree those are two of the use cases that make the most sense for green hydrogen. Seems like the question is whether the market can get large enough to get costs down sufficiently to deploy in these smaller niche cases without the volumes the other use cases would bring…
Thanks for the link to Vaclav Smil's presentation. Looking through the conference agenda, I stumbled on a keynote address by Johan Rockstrom called Science and Planetary Health Check Update. Well worth watching.
Absolutely. Thanks for outpointing. There’s much of interest from the ICEF conference, including the well-worth-watching response to Smil by Rystad Energy CEO Jarand Rystad, later in the same session I linked to.
Thank you for this post, Bill. As always, you beautifully describe the big picture of Japan's approach to the energy transition.
Thanks Walter, and happy new year. I’m interested in your thoughts on this, actually: If and when Japan discovers that green hydrogen is going to be too expensive as a pathway to decarbonizing the power sector, what do you figure will the response be? Simply continue as generating electricity as is and fall (further) behind on decarbonization? Up the imports of LNG? Build wind, solar, geothermal at a faster pace? Somehow speed up the use of nuclear, primarily with new build? What think?
Yeah these are excellent questions. As it stands now, METI's 7th Strategic Energy Plan (now in public comment until 1/26) maintains the same hydrogen price & consumption targets for 2030, 2040 and 2050. So at least on the outside, that signals a refusal to acknowledge the difficulty of bringing the cost of green H2 down.
But as you suggest, reality isn't on the government's side, especially with many Japanese companies losing hope in a key Japan-Australia hydrogen project (https://thediplomat.com/2024/12/the-end-of-japans-hydrogen-rush-in-australia/). These same companies are turning to domestic production instead, so I think that'll be part of the response.
The other response would be to continue partnering with hydrogen producers in other markets in the Middle East and Asia. I think some of these will be green H2, most will be gray H2 with semi-credible promises to become blue H2 in the future.
The key to all of the above will be the contract-for-difference scheme that officially began accepting applications late last year -- it'll be interesting to see how well that subsidy will work in bringing H2 projects (domestic and overseas) to fruition.
Happy to chat about this more!
While I am dubious that hydrogen (imported as ammonia) will be a major component of Japan’s future energy system, it will be essential for reducing emissions from steel production (DRI) and for producing replacing fossil fuel based ammonia in the agricultural system. You’re probably right that Japan will muddle forward….
Agree those are two of the use cases that make the most sense for green hydrogen. Seems like the question is whether the market can get large enough to get costs down sufficiently to deploy in these smaller niche cases without the volumes the other use cases would bring…
Thanks for the link to Vaclav Smil's presentation. Looking through the conference agenda, I stumbled on a keynote address by Johan Rockstrom called Science and Planetary Health Check Update. Well worth watching.