Japan's economic and energy supply/demand outlook by FY2020. Domestic situation affected by international situation where uncertainty is growing

The impact of the consumption tax hike on the Japanese economy is small compared with the previous tax hike in FY2014 due to various measures. In FY2020, the production will expand slightly (+ 0.3%) due to the recovery of world economy, and trade balance will show a significant shrinkage in deficit due to the fall of energy prices. Domestic primary energy supply in FY2019 will decrease for the first time since FY2014 when nuclear power became zero, and CO₂ emissions will increase for the first time since FY2013. As for electric power sales in FY2020, electric light use will decrease slightly due to the spread of energy-saving equipment, and electric power use will increase due to the recovery of production in the manufacturing industry. The town gas sales volume in FY2020 will reach a record high with a significant increase in power generation and a slight increase in general industrial use. In FY2019, the first year of FIT system change, the businesses related to third-party transactions and the promotion of self-consumption of residential surplus solar power will expand. However, it is important to keep renewable energy to be long-term main power sources by means of the system design complying with the features of individual power source and current situation. Nuclear power contributes to 3E (energy security, environmental compatibility, economic efficiency). In preparation for the impact of oil price hike due to the Middle East geopolitical risks, it is important to prepare for risks through lowering the cost of renewable energy and facilitating the restart of nuclear power plants. (A.O.)