Population decline and electricity demand in Japan: myth and facts

摘要

We often hear a view that "Japanese electricity consumption is decreasing due to the population decline." Compared to the frequency with which this is repeated, quantitative analysis of the relationship between population decline and electricity demand has been quite rare. This paper is an attempt at a concise analysis of this relationship based on historical data. Increases in population and electricity consumption in Japan seem to have occurred simultaneously. Furthermore, it can be seen that electricity consumption moved into a declining curve from FY2008 alongside population, which recorded a historical high in 2008 and then began to decrease. However, concluding that "population decline results in decreases in electricity consumption" based only on this impression would be somewhat premature. Populations in the areas of seven general electric utilities other than Tokyo, Chubu and Kansai Electric Power Companies - namely Hokkaido, Tohoku, Hokuriku, Chugoku, Shikoku, Kyushu and Okinawa Electric Power Companies - have already declined over more than 15 years since 1998. Electricity consumption, however, had increased almost consistently before the global financial crisis. Whilst the populations in the seven electric utilities' areas declined by 3% from the peak of 1997 to 2010 before the Great East Japan Earthquake, electricity consumption increased by 22% over the same period. Viewed until 2013, the population has declined by 4% whereas electricity consumption has increased by 16%, despite progress in saving electricity after the Earthquake. The decomposition analysis results of changes in electricity consumption in Japan clearly show that contribution by demographic is not so large and major factors are energy conservation, electrification and economic growth. Acceleration of the population decline is expected in the future, but still, for example, the rate of decline in the next decade (2013-2023) is expected to be about 0.4% per annum. The connotations of the term "population decline" may give us the impression that a serious impact on various fields in the society is occurring. However, in reality, contribution by the population decline to decreases in electricity consumption is limited. Meanwhile, with respect to economy, for instance, growth of 0.8% p.a. in real GDP per capita is expected even in the "Baseline Case," a modest case from the Cabinet Office's "Medium- and Long-Term Economic and Fiscal Estimates." Final energy consumption decreases by 1.2% p.a. in the next decade under these population and economic assumptions combined with energy conservation and electrification progress equivalent to the trend in the period after FY2000. Electricity consumption, however, does increase by 0.6% p.a. Energy and electricity have the nature of being goods to support the supply of other goods and services as well as being consumer goods themselves. Decreases in the labour force must be compensated by other production factors, etc. in order to keep a certain production level when a declining productive population causes a labour shortage problem. Such factors are greater technological advances, more capital and more energy. In the future, population decline may induce increases in electricity demand, not decreases.