Analysis on Energy Cost of LCET-CN based on ERIA Energy Outlook Models 2024

The EAS Energy Outlook has been updated every 2 years, with the most recent update completed in 2021–22 and the next scheduled for 2023–24. Thus, in 2022–23, ERIA conducted the following analyses: a) Revision of the current LCET-CN (Low Carbon Energy Transition – Carbon Neutral) scenario, if possible, and b) Cost comparison analysis between BAU (Business as Usual) and LCET-CN scenarios to compare energy costs. The energy costs considered include: 1) Fuel costs, which encompass fossil fuels and hydrogen, 2) Power investment costs across all power sources, and 3) CCS (Carbon Capture and Storage) running costs. Data on energy consumption, power generation per each power source, and the amount of CO2 stored are derived from the EAS Energy Outlook 2022–23. In contrast, the prices of fossil fuels, unit capital costs of each power source, hydrogen prices, and CCS costs are based on other publications. It is assumed that the costs of power capital, hydrogen, and CCS will remain affordable until 2050 due to expected advancements in innovative technology. Consequently, the energy costs of the LCET-CN scenario are anticipated to be lower than those of the BAU scenario.