Cost-profit analysis for Japan-Russia and Japan-South Korea interconnectors

This paper describes the results of cost-profit analysis related to interconnectors for Japan-Russia and JapanSouth Korea based on the Asia International Grid Connection Study Group 2^(nd) report. The Group has been established in 2016 for conducting research on international electric power networks in Asia from the viewpoint of technology, investment and legal framework. 2^(nd) report of the Group was published in June 2018, examining the profitability of an interconnectors between Japan and neighboring countries. The Group has calculated expected profit from operation of these interconnectors.The Group has categorized interconnector business into four models from the survey of preceding and current business on grids and interconnectors. To clarify profitability, expected internal rate of return(IRR) was calculated for each business model based on estimated investment cost for each route. When interconnector is dedicated to specific power plants or suppliers and electricity can be sold at Japan wholesale market at 2016-2017 price level, positive IRR levels are expected in case that Free on Board(FOB) price lower than 7 JPY/kWh. When the investment will be covered by electricity tariff by final consumers, tariff for consumers will just slightly increase by approximately 0.1 JPY/kWh.

Route designs and cost estimation for Japan-Russia and Japan-South Korea interconnections

This paper describes route designs and cost estimation for possible interconnections between Japan-Russia and between Japan-South Korea based on the Asia International Grid Connection Study Group 2^(nd) report. The Group has conducted a desktop study to design several cable routes as possible options. To optimize the route, the group studied a wide range of open data, regarding sea depth, fishery zones, geographic condition, available transmission capacity in connecting points inside Japan and so on. The result of desktop study shows that it is possible to keep sea depth for planned routes less than 300 m and length for most of designed routes is less than 600 km. Compare to existing undersea cables in Europe, proposed routes are not challenging from technical and geological viewpoints.The study shows that investment cost range, including cost for grid enhancement inside Japan, is from around 200 bn JPY to 600 bn JPY, depending on the routes. Annualized cost range is from around 8 to 24 bn JPY(for 25-year operation), which is not so large compare to 1800 bn JPY-average annual investment in transmission infrastructure by 10 power utilities in the past 23 years.

Present status of pumped hydro storage operations to mitigate renewable energy fluctuations in Japan

This paper focuses on pumped hydro energy storage(PHES)plants’current operations after electricity system reforms and variable renewable energy(VRE)installations in Japan.PHES plants have historically been developed to create electricity demand at night in order to operate base load power plants,such as nuclear power plants,in stable conditions.Therefore,many PHES plants are located midway between nuclear power plants and large demand areas.However,all nuclear power plants had to–at least temporarily–shut down after the Great East Japan Earthquake followed by a nuclear accident at Fukushima Daiichi in 2011,and renewable energy power plants have been deployed rapidly after the introduction of a feed-in-tariff(FIT)scheme.Therefore,PHES plants are being used to mitigate fluctuations of VRE,especially in areas where renewable energy has been significantly installed.The daily highest capacity ratio of PHES plants in Kyushu area has recorded three times higher than it in the other areas where the past operating mode is still conducted.But those operations on PHES plants are simply followed as a dispatch rule of the Organization for Crossregional Coordination of Transmission Operators(OCCTO),market-based operations have not been conducted enough yet.The market design shall be changed to harmonize VRE installation and PHES plants’operations are necessary to make the transition from the past operating mode of PHES plants across Japan.

Utilization of cross-regional interconnector and pumped hydro energy storage for further introduction of solar PV in Japan

The amount of solar PV installed capacity has steadily increased to 44.5 GW at the end of FY2017,since the introduction of the Feed in Tariff(FiT)to Japan in 2012.On the other hand,since the first curtailment of solar PV was conducted on October 13th,2018 in the Kyushu area,the curtailment has been frequently executed including wind power after that.In this study,cross-regional interconnector and pumped hydro energy storage(PHES)are focused on mitigating curtailment.In Japan,there are 9 electric power areas which connected each other by cross-regional interconnectors.According to the historical operation,cross-regional interconnectors were secured as emergency flexible measures,but after the implicit auction was started from October 2018,it is used on merit order.Regarding a PHES in Japan,they have been built with nuclear power plants for several decades.Because the output of nuclear power generation is constant,so the PHES is used to absorb the surplus at nighttime when the demand declines.All nuclear power plants in Japan have been shut down after the accident at the Fukushima Daiichi Nuclear Power Plant following the Great East Japan Earthquake that occurred on March 11th,2011.There are several nuclear power plants that have been restarted(9 reactors,as of August 2019).In this study,the amount of curtailment for solar PV in the Kyushu area is sent to the Chugoku area using the cross-regional interconnector(Kanmon line).Then,the PHES in the Chugoku area is pumping with low price.Because the spot price in the market is low when the curtailment is executed.After that,the PHES is generating at night with high price when the solar PV is not generating.It makes a profit by the deference for the cost of pumping and the revenue of generating by the PHES.As a calculation result,for one week from May 2nd to 8th,2019,a profit becomes 152.2 million JPY(about 1.22 million EUR).For this purpose,it is necessary to raise the operation capacity of the cross-regional interconnector up to the rated capacity with the frequency control function of solar PV instead of the capacity to keep frequency in the event of an accident.This will allow the further introduction of solar PV in Japan.