Proposal for Issue-driven Research and Development I Future energy demand and supply landscape envisaged through a framework of cities/CRDS-FY2014-SP-01
Executive Summary

This proposal describes critical areas for research and development that were designed based on a framework of cities and which are expected to be effective at reducing energy consumption and improving the efficiency of energy use in Japan.

Japan is a resource-poor country that imports most of its energy feedstock, so its energy security is strongly affected by international political and economic trends. As a result, the outlook for energy in Japan is inherently uncertain. Additionally, since the 2011 Great East Japan Earthquake and the resulting nuclear accident at Fukushima Daiichi Nuclear Power Plant, thermal power generation has accounted for a higher proportion of primary energy supply to meet domestic energy demands. This resulted in an increase in greenhouse gas emissions in 2011 compared with that in 1990, the reference year of the Kyoto Protocol. These circumstances increase the urgency of reducing energy consumption and meeting greenhouse gas emissions targets for a sustainable society while seeking for the economic growth and social welfare simultaneously.

The Japanese government approved the Fourth Basic Energy Plan in 2014. This plan describes the broad aim of energy policy: to construct a system of multilayered, diverse, and flexible structures at national level to satisfy energy demands. Although the Plan addresses supply-side factors, such as the balance of power generation methods, it also notes the importance of the demand-side changes that are necessary to deal with social, systematic, and technical changes relevant to energy. In its discussion of demand-side issues, the plan puts a particular emphasis on the promotion of energy conservation generally and points out the need for different sectors to strengthen their specific conservation efforts for the efficient (i.e., not wasteful) use of energy resources. So far, however, most discussions on demand-side energy policies have taken a national-level perspective and more specific plans according to local characteristics have not been provided yet. To encourage more efficient energy use, it would be helpful to establish a framework for examining energy issues in detail, taking a finer-grained perspective. This would also allow bolder and more specific goals for constructing an energy system for the future.

In this context, cities can be regarded as critical targets for reducing energy consumption and improving energy efficiency. Cities, by their nature, are places where great numbers of people live and engage in economic and social activities. Collectively, this leads to energy demand being strongly concentrated within cities. This is true not only in Japan but in other countries also, including both developing and developed countries. Historically, cities developed as a structure to protect the lives of residents from external enemies and natural disasters and to provide opportunities to efficiently utilize the collective intelligence and resources of the city for various social and economic activities. Yet, to maintain and strengthen the functions of cities, their energy needs have continually increased over time. As a result, the system for meeting energy demands has become too complicated to understand in its entirety, and concerns about resource depletion and environmental impact have become more serious. There is a need to examine cities in more detail, especially in terms of energy infrastructure, and explore how science and technology can improve the energy infrastructure and functionality of cities. In other words, science, technology, and innovation policies should be promoted that aim to drastically lower energy consumption and strengthen energy conservation, while at the same time contribute to improving socio-economic activities, health, and quality of life in cities.

Japan has 111 cities with a population of more than 200,000.1 There are around 1,700 municipalities, so although these 111 cities account for only a small proportion of municipalities, nearly half of the 128 million residents of Japan live in these cities and they consume nearly half of all the energy used in Japan2. A study of the energy consumption patterns and infrastructure of these cities should identify ways in which a future energy system could contribute to reducing energy consumption at national level. Therefore, in this proposal, energy problems of cities were examined with a forward-looking approach based particularly on the following three perspectives aimed at identifying and organizing future energy use in cities: the movement of population among cities, the progress of energy-related technologies and social change, and the energy consumption trends in individual cities.

The 111 cities with more than 200,000 residents can be roughly categorized by size into two types: metropolitan areas such as Tokyo, Nagoya, and Osaka, which attract migrants from surrounding areas; and mid-sized cities, where the population is expected to be either stable or slowly decreasing. In metropolitan areas, many people commute to central districts during the day, but this is not common in mid-sized cities. In mid-sized cities, households are distributed mainly in the suburbs and population distribution has been becoming sparse. These characteristics of cities are already known and are expected to persist in the future [2].

Several trends in energy-relevant technological and social changes are seen in Japanese society. As examples, renewable energy is being promoted on a large scale, smart meters and dynamic pricing systems are being investigated, and energy system reform is being discussed by the government. Any of these would bring about major changes to the energy system of future cities. However, effecting such changes would be difficult because establishing a more sophisticated and highly controlled energy system requires simultaneous scale up of the energy system from local scale and integration of various technologies. Demonstration experiments of an energy management system (EMS) conducted at several sites in Japan have been mostly done at local level, and scaling up experiments have not been conducted yet. Moreover, the viability of proposed technological solutions and systems to utilize the massive amounts of energy-related information provided by the EMS and its network, which covers large areas in cities, is not yet clear.

Problems specific to different cities have also become apparent by examining trends in the energy consumption patterns of the abovementioned 111 cities. Energy consumption per capita in the household sector tended to vary in cities with a relatively lower population density. This indicates that different cities have different possibilities for reducing energy consumption although other aspects including social, economic, geographic, and climate-related conditions would have a role in household energy use as well. Differences among cities were seen in the commercial sector across all population densities, indicating that the commercial sector, too, has different possibilities for reducing energy consumption. In the transportation sector, the energy consumption per capita was negatively correlated with population density, and few differences were seen among cities of similar size.

These findings and perspectives on energy-related issues for cities lead us to recommend basic policies for energy in cities that focus on improvement in efficiency, reduction of CO2 emissions, and load leveling. Here the first area, improvement in efficiency, includes comprehensive improvement in efficiency, by connecting improvements in various city functions and convenience with improvements in energy efficiency. To achieve this, it is necessary to manage the energy system at city level by designing cities around more efficient energy uses. For metropolitan areas, distributing the energy demand more evenly will be essential for making the energy infrastructure more stable and reliable, because energy demand in such areas tends to be excessively concentrated in central districts during the day. For mid-sized cities, on the other hand, concentrating and making compact scattered energy demands within a city and raising efficiency will be essential for improving the energy supply system.

Different cities may well adopt different policies in the future to realize their individual vision. Yet, in terms of energy-related technological aspects, there are several measures that should be widely adopted by cities and can be expected to improve energy systems. The following is a list of the technological measures identified. These were explored with a view to reducing energy losses, expanding the use of renewable and unexploited energy sources, and smoothing out energy balance within cities. The nine identified measures are as follows.

1. Regulation of the demand and supply system in an energy network
2. Promotion of energy conservation and the use of renewable energy in homes
3. Promotion of energy conservation and the use of renewable energy in other buildings
4. Promotion of the use of unexploited energy sources in a district
5. Spatial planning and management of land use and city buildings
6. Improvement of the energy efficiency of internal combustion engines and promotion of next-generation vehicles
7. Improvement of traffic flows in cities
8. Appropriate use of various means of transportation
9. Reduction of power losses during distribution and transformation

To put these nine measures into practice in a city and significantly improve its energy system, innovative materials, technologies, systems, and implementation methods will be most effective, although conventional technologies, systems, and methods will also be helpful. Consequently, research and development is needed to foster various ideas and possibilities. For the mid- to longer term looking toward 2030, the following five areas of research and development were identified. Progress in these areas will have broad impacts, both quantitatively and qualitatively, on cities.

A Development of an advanced and multi-layered energy management system
B Improvement of the energy-related efficiency of automobile traffic in cities
C Promotion of the use of renewable and unexploited energy sources and of energy conservation in cities
D Urban planning that incorporates the perspectives of efficient energy use and its attendant benefits
E Use of big data to address the problem of energy consumption in cities

The potential reduction in energy consumption was estimated assuming that, by 2030, these nine measures would be implemented in all 111 cities of Japan: in comparison with the energy consumption of these 111 cities in 2010, a reduction of 36% could be achieved for the household, commercial, and transportation sectors, which would result in a reduction of 21% in the total amount of final energy consumption. This reduction is equivalent to 10% of the final energy consumption of all of Japan in 2010. However, these estimates are based on a rough hypothesis and a simplified model of calculation that uses the limited amount of available data and resources, as shown in the attachments. More detailed examinations are needed.

The aim of this proposal is to encourage action on social issues by various entities, including the government, by approaching problems through the framework of cities?where the most population lives?and by presenting visions and goals that are specific and challenging. The national government and local governments need to take the initiative in this and support the organization of systems for cooperation among universities, research institutions, and the private sector.

In a research and development program, establishing a collaboration platform is critical for enabling participants to share their individual vision, maintain motivation, and cooperate with those from different academic fields and at different research and development phases. A site for testing scientific theories and prototype models should also be considered before starting a program. Simulations of an energy system that may be applied to a city can be carried out at the site dedicated to this research purpose, and the effectiveness of proposed systems can be evaluated there. Alternatively, prototype models and methods may be implemented in actual regions within cities. It might also be practical to use already available systems for research and development and policy frameworks (e.g., specialized wards) in this program.