*2.4. Annual Generation Cost and CO*<sup>2</sup> *Emission Analysis*

In 2015, Japan's Ministry of Economy, Trade, and Industry (METI) [34] reported and modeled the cost of electricity generation for 2014 and 2030. An Advisory Panel to the Foreign Minister on Climate Change (MOFA) [35] citing BloombergNEF presented their estimates on the cost of generation in 2018. Table 7 consolidates these reports along with the values used for the annual cost calculations. Generally, the cost in 2014 was used in the calculations except for wind and solar power, where it was averaged between the 2014 report and the 2030 model. Except for coal, the values are near the estimated values of BloombergNEF.


**Table 7.** Cost of electricity generation (JPY/kWh).

\* Values in parentheses are the average values; \*\* used in the calculation; as of April 2021: 100 JPY = 0.92 USD = 0.77 EUR.

For the CO2 emission analysis, the study mainly focuses on the CO2 emission from fuel consumption, which does not cover the CO2 emission during construction, maintenance, and disposal of the system. Therefore, the calculation assumes that, during generation, nuclear, geothermal, hydro, solar, and wind power do not generate CO2 and biomass has net-zero CO2 emissions. According to Japan's Ministry of Environment [36], depending on the technology, coal and LNG has a CO2 emission of 0.95 kgCO2/kWh to 0.83 kgCO2/kWh and 0.51 kgCO2/kWh to 0.36 kgCO2/kWh, respectively. The average emission for coal (0.89 kgCO2/kWh) and LNG (0.44 kgCO2/kWh) were used in the analysis.

Since temperature leads to higher or lower demands, by calculating the levelized cost of generation and levelized CO2 emissions, the relationship between cost and CO2 becomes clearer. Although weather variations still have an impact, this impact is less when seen from a levelized perspective. The annual levelized cost of generation was calculated using Equation (1). The hourly simulation provides the annual generation per technology (*GenerationkWh tech* ). By multiplying the generation per technology to the corresponding cost of electricity generation (*CostJPY*/*kWh tech* ), the total cost per year could be calculated. The levelized cost of generation on that particular year can then be calculated by dividing the total annual cost by the total annual generation. Similarly, the levelized CO2 emission was calculated Equation using (2) and the CO2 emission per technology (*EmissionkG*−*CO*22/*kWh tech* ).

$$\text{levelized cost of generation} = \frac{\sum \text{(Generation}\_{\text{tech}}^{\text{kWh}}) (\text{Cost}\_{\text{tech}}^{\text{lPY}/\text{kWh}})}{\sum \text{Generator}\_{\text{tech}}^{\text{kWh}}} \tag{1}$$

$$\text{levelized CO}\_2 \text{ emissions} = \frac{\sum \left( \text{Generator}\_{\text{tech}}^{\text{kWh}} \right) \left( \text{Emission}\_{\text{tech}}^{\text{kG}-\text{CO}2} / \text{kWh} \right)}{\sum \text{Generator}\_{\text{tech}}^{\text{kWh}}} \tag{2}$$

#### **3. Results**
