Route designs and cost estimation for Japan-Russia and Japan-South Korea interconnections

1 Introduction

The Asia International Grid Connection Study Group has been established for conducting research on international electric power networks and recommending what to do in order to open up its possibilities in Asia in 2016.The Group is composed mainly of researchers of electric power systems and energy policy,experts in renewables,and people from related businesses.Renewable Energy Institute plays a role as secretariat.In the interim report which was published in Apr.2017 [1],the Group has reported overviews of the concept of international power grids,cases of application in Europe,and potentials it has in Asia and challenges to be addressed.

The Asia International Grid Connection Study Group 2nd Report (released in June 2018) examines the feasibility of developing an international grid connection between Japan and neighboring countries (Russia and South Korea) [2].Main purpose of this paper is to describe desirable cable route designs and cost estimation for Japan-Russia and Japan-south Korea interconnections,based on the Study group's 2nd report.

2 Construction routes for interconnectors

2.1 Principles for construction routes

Before examining possible interconnector routes between Japan and Russia on the one hand,and between Japan and South Korea on the other,the purposes of the construction must be understood.In other words,a scenario should be prepared to describe which country may deploy which of its power sources to supply electricity to where in the other country and deliver what benefits.The Study Group has prepared scenarios for Japan-Russia and Japan-South Korea interconnectors,shown below in Table1,for examining some possible routes.

Table1 Scenarios for Japan-Russia and Japan- South Korea interconnectors

JP-RU Power source Demand areas Russia● Sakhalin● Continental part of Far East● Kanto Area● Existing hydropower stations along Amur River● Newly-developed wind power in southern Sakhalin Japan ● Newly-developed wind power in Hokkaido JP-SK Power source Demand areas South Korea● Newly-developed renewable energy in South Korea● Assume renewable energy from Mongolia and China as future options● Mainly in southern part of South Korea and Seoul Metropolitan area Japan ● Solar PV in Kyushu,etc.● Kansai Area

Fig.1 Geographic location of key areas for interconnections

Interconnector between Japan and Russia is primarily intended to deploy rich renewable energy in the Russian Far East [3] to produce electricity and supply it to demand centers in Japan at reasonable prices.Specifically,existing hydropower stations along the Amur River will be used efficiently to supply clean electricity to the Kanto Area,a demand center located in Honshu,the main island of Japan (Fig.1).Another plan has been prepared to develop new wind power plants in the southern part of Sakhalin,presumably a suitable place for wind power generation.The interconnector could be used to export wind power electricity produced in Hokkaido to Russia.Once the line is extended through Hokkaido over to Honshu,it could serve as cross-regional connection and supply wind power electricity produced in the north to demand centers in Honshu.

For interconnector between Japan and South Korea,unlike Japan-Russia interconnector,the Study Group considers no specific existing power sources as a given in South Korea.In view of renewable power sources that may be explored in South Korea,and China-South Korea and China-Mongolia interconnector now under discussion,we also examine medium and long-term scenarios where Mongolia,China and South Korea may be connected through transmission lines which should enable Japan to import from South Korea renewable energy produced in China and/or Mongolia (primarily solar PV and wind power electricity generated in Mongolia).We see the export of electricity from Japan,especially solar PV electricity generated in Kyushu,to South Korea as one of the main purposes of the interconnector as well.South Korea has a rather large electricity market,as the IEA reports the country consumed 495 TWh of electricity in 2015 [4].Once Japan and South Korea are connected and further joined by China,they would form the largest electricity market in the world by far.That is another main purpose of Japan-South Korea interconnector.

The Study Group assumes capacity of the interconnector at the initial stage at 2 GW in direct current (DC) both for Japan-Russia and Japan-South Korea,mainly in view of their supply capacity of renewable energy and impact on the supply-demand balance in Japan.

For this report,a connection point is selected one point in Russia and Korea respectively.On the other hand,three connection points are selected in Japan for Japan-Russia interconnector and Japan-South Korea interconnector respectively.The reason is that there are not so many alternative locations for the connection point in Russia and Korea.But there will be much deference for the connection point in Japan due to the balance of demand area and available capacity for the domestic grid in Japan.

2.2 Methodology and reference data for desk research for route design

Routes are designed under the scenarios described above by picking out connection points in both countries and determining a route connecting them with a submarine transmission line.

For this report,a Russian connection point for Japan-Russia interconnector is selected near the Korsakov Substation (Fig.2).There is no transmission line in place connecting Sakhalin and the Russian continental part of Far East.However,since the 1990s,discussions have been going on about construction of a transmission line connecting Japan and Russia through Sakhalin [5].

For Japan-South Korea interconnector,a candidate for a connection point in South Korea somewhere around Busan(Fig.3) has been defined.In the southern part of South Korea,some power stations,including the Samcheonpo coal and Kori nuclear power plants,are expected to be shut down in the future.A connection point in South Korea would be determined based in part on examination of whether and how transmission facilities and substations used for them could be efficiently converted for the interconnector.

Fig.2 Japan-Russia interconnector routes

Fig.3 Japan-South Korea interconnector routes

In principle,a transmission line should desirably go through the shortest route to hold down construction costs.However,connection points cannot always be linked with a straight route between them.For instance,with a Russian connection point set at the southernmost tip of Sakhalin,43 km away from Cape Soya,Japan-Russia interconnector could be built with a shorter submarine transmission line.However,this report assumes a connection point will be set around the Korsakov Substation in view of its location,as well as the fact the cape lying ahead is unsuitable for construction of a connection point due to rough waves and ice floes around it.The Study Group has,therefore,determined that some locations inside the bay,with weaker waves,should be chosen for a connection point.

As stated above,connection points should be chosen and routes between them should be designed based on multiple factors,including geographical conditions of surrounding areas,the depth of the sea where cables are laid,and any environmental reserves and/or fishing areas along the route.Reviewing data publicly available (Table2),this report considers the factors mentioned above as much as possible.For instance,data from offshore wind conditions maps(NeoWins) and Marine Cadastre,can be used to see whether there is any designated fishing area around a connection point,where any reserve is located,how deep the sea is around it,and whether any communication cables have already been laid nearby.

Table2 Reference data used for desk research

Research items Study of submarine routes Evaluation of connection points &landing places Fishery rights,reserves,etc.Marine Cadastre [6] Marine Cadastre [6]NEDO NeoWins [7]National Institute of Advanced Industrial Science and Technology (AIST)“GeomapNavi”.[8]Depth of sea Japan Oceanographic Data Center's data.[9] —Geology National Institute of Advanced Industrial Science and Technology(AIST) “GeomapNavi”.[8]Transmission grid capacity in Japan Power companies'grid maps.[10]

2.3 Selection of a connection point in Japan

Connection points in Russia and South Korea have been determined as stated above.The route of an interconnector would entirely differ depending on where in Japan the transmission line is connected.Connection points in Japan have been selected through much more detailed analysis than those in Russia (southern Sakhalin) and South Korea(somewhere around Busan).From the three criteria for designing the best route,shown below in Table3,this research has selected three possible connection points each for Japan-Russia and Japan-South Korea interconnector-Wakkanai (Hokkaido),Ishikari (Hokkaido) and Kashiwazaki (Niigata) for the former (Fig.2),and Maizuru(Kyoto),Matsue (Shimane),and Imari (Saga) for the latter(Fig.3).

None of the connecting points marked are rated the highest in all the three criteria in Table3.For instance,Imari,Wakkanai,and Ishikari are rated higher in criterion 1 while rated lower in criteria 2 and 3 because they are far away from the Kanto and Kansai areas,demand centers in Honshu.In contrast,Kashiwazaki and Maizuru are rated higher in Criteria 2 and 3 because they are near to demand centers and because a certain amount of available capacity is found in existing transmission lines linking them with demand centers.However,they have a disadvantage in longer transmission lines running underwater from their respective counterpart country.

For each of the connection points,their “landing points”are reviewed and evaluated under several criteria,including whether they satisfy geographical conditions enabling cables to make landfall there,whether any site is available for installing AC/DC converters,and whether they avoid being located in any national park or reserve.

Table3 Criteria for selecting a connection point in Japan

Criteria Evaluation Reference data 1)Proximity to the connection point in Russia/South Korea Whether the submarine transmission line linking the two connecting points is the shortest.Google Earth.[11]2)Proximity to demand centers in Japan (Tokyo Metropolitan/Kansai areas)Power can be transported to demand centers through the shortest transmission lines Maps of the Geospatial Information Authority of Japan.[12]3)Transmission capacity availability to demand centers in Japan Sufficient grid capacity can be secured to transport electricity to demand centers in Japan Data of transmission capacity held by General Electricity Transmission and Distribution Utilities.[10]

2.4 Construction routes for Japan-Russia interconnectors

After desk research is performed to select connection points in both Japan and the two other countries,routes are designed to link them.When designing a route,several factors are considered.For instance,the Study Group referred to bathymetric charts to go around areas where submarine cables are difficult to lay,such as rocky or deep seabed and fishing grounds,whenever possible.

For Japan-Russia interconnector,three possible routes have been selected (Fig.2).The longest,① Sakhalin-Kashiwazaki route,is 1,255 kilometers in length.The route needs the longest submarine transmission lines,while it has an advantage in being connected to a location quite near demand centers in Honshu.Off the coast of Hokkaido,the sea is more than 1,000 meters deep in some places.For this research,routes less than 400 meters deep are examined.

Marine Cadastre shows that in Hokkaido,fishery rights are established for broad swathes of the sea along the coast.The Study Group looked for routes going around these areas in the shortest possible length.(Along Honshu,fishery rights are established for smaller areas.) Through these examinations,all the routes designed are less than 300 meters deep.

② Sakhalin-Ishikari and ③ Sakhalin-Wakkanai routes are shorter,455 kilometers and 161 kilometers,respectively.However,they need additional transmission lines in Japan,going from a place they come ashore in Hokkaido throughout the prefecture all the way to Honshu.

For Japan-Russia interconnector,the Study Group examined possible routes to reach the Kanto area after cables make landfall in Hokkaido.The Wakkanai-connected route (Fig.2③) is the shortest in the interconnector section.But it requires to build a transmission line from the connection point throughout the prefecture all the way to Kashiwazaki.From Wakkanai through Ishikari,cables may be installed overhead,with two AC/DC converters set up on the way to transport electricity generated from wind farms in Northern Hokkaido.Beyond Ishikari,cables will be laid underwater to Kashiwazaki (Fig.4 R3).

For the Ishikari-connected route (Fig.2②),two options for a line from Ishikari are examined,with one going to Fukushima (Fig.4 R4) and the other to Kashiwazaki (Fig.4 R2).For the former,underground cables are laid through Hokkaido to somewhere around Tomakomai,with AC/DC converters installed on the way to connect them with the high-voltage transmission system for the prefecture.At Tomakomai,they are connected with submarine transmission lines going to Fukushima.

What is characteristic of this design is that it requires only a short land section in Hokkaido and allows the cables to be connected with a high-voltage transmission system covering the area between Fukushima and Tokyo.The latter almost traces the route going from Sakhalin directly to Kashiwazaki (Fig.2①),except that it comes ashore at Ishikari to be connected with a high-voltage transmission system for Hokkaido,before going back underwater to reach Kashiwazaki.

Fig.4 Routes between Russia and demand centers in Japan

2.5 Construction routes for Japan-South Korea interconnectors

For Japan-South Korea interconnector,three possible routes have also been selected (Fig.3).None of these has to go as deep undersea as any of the Japan-Russia routes.The greatest depth is about 200 meters.Therefore,routes between connection points are designed to avoid areas with established fishery rights and rocky seabed on priority,rather than deep waters.

The Busan-Maizuru route is the longest; 627 kilometers.It has,however,an advantage in that the cable can be connected to a point near demand centers in Kansai.② The Busan-Matsue route goes undersea over a shorter distance; 372 kilometers,and makes landfall at a point with good access to demand centers in Kansai,as well.③The Busan-Imari route is the shortest; 226 kilometers.For the route,however,access to demand centers in Kansai is a challenge.

The Study Group examined possible routes in Japan as well to supply electricity from the Kyushu or Chugoku area,where international cables are connected,to the Kansai area,a demand center.Routes are designed in a manner such that transfer capacity available in each area will be used most efficiently and that grids will be enhanced in principle only in sections without sufficient capacity available.For crossregional connections,transfer capacity is assumed to be secured under an implicit auction scheme.

There would,however,be a problem with a route in Japan for transporting electricity from Kyushu to Kansai after cables with a capacity of 2 GW coming from South Korea are connected in Kyushu (Fig.3③).This route has a bottleneck in interconnector capacity between the Kyushu and Chugoku areas.The Study Group assumed that the cross-regional connections between the areas (about 2.7 GW) would be operated under an implicit auction scheme,and that at least 1 GW of the power imported from South Korea through Kyushu could be transported to Chugoku,a neighboring area.Based on the transmission capacity confirmed at present in the Chugoku area,transfer capacity available in the region for electricity coming from Kyushu would be around 1 GW at most.For 2 GW of power imported from South Korea through Kyushu,another 1 GW of transmission capacity would be needed.

For that purpose,the Study Group suggests another route with cross-regional connections built between the Kyushu and Shikoku areas to supply 1 GW of power through Shikoku to the Kansai area.Confirmed transmission capacity in the Shikoku area and capacity of cross-regional connections between the Shikoku and Kansai areas allow us to conclude that we need nothing but cross-regional connections to be built between the Kyushu and Shikoku areas to supply 1 GW of power from Kyushu through Shikoku to Kansai (Fig.5 K3).

For the Chugoku-connected route (Fig.3②),electricity could not be supplied to the Kansai area from cables that come ashore at Matsue without some enhancement for some sections with a shortage of available transfer capacity.

Japan-South Korea interconnector routes designed based on the studies stated above,which include capacity enhancement within Japan,are shown on Fig.5 as K1,K2,and K3.With efficient use of existing cross-regional connections in the design of a route in Japan,even the Kyushu-connected route (K3) might not need more than several tens kilometers of transmission line enhancement.

Fig.5 Routes between South Korea and demand centers in Kansai

2.6 Summary of Japan-Russia and Japan-South Korea routes design

length and depth for each route,including domestic routes in Japan are given in Table4 and 5.

The shortest routes for Japan-Russia and Japan-South Korea interconnectors are 161 kilometers and 226 kilometers,respectively,and each goes less than 300 meters undersea at their deepest point.In Europe,for instance,NorNed,a more than 500 kilometers long submarine transmission line going more than 400 meters undersea at its deepest point,has been in service for ten years.In this report,the longest route,Sakhalin-Kashiwazaki,is 1,255 kilometers.Europe has a plan to construct a 1,070 km submarine transmission line connecting Iceland and Scotland (IceLink).For SAPEI,a Mediterranean project for submarine transmission lines to connect the mainland of Italy and Sardinia,cables are laid 1,500 meters undersea at the deepest point.With reference to these precedents,The Study Group has concluded that the Japan-Russia and Japan-South Korea interconnector routes discussed here have no physical conditions that may make their construction particularly difficult.

Table4 Japan-Russia routes

Route Total km Russia-Japan Japan onshore Japan offshore Max.depth R1 Sakhalin-Kashiwazaki 1,2551,255 — — 300 m R2 Sakhalin-Ishikari-Kashiwazaki 1,255 455— 800300 m R3 Sakhalin-Wakkanai-Ishikari-Kashiwazaki 1258 161 297 800 300 m R4 Sakhalin- Ishikari--Tomakomai-Fukushima 1246 455 108 683 ≤100 m

Table5 Japan-South Korea routes

Max.depth K1 Busan-Maizuru627 627— —200 m K2 Busan-Matsue-(→Kansai)Route Total km SKJapan Japan onshore Japan offshore 41337241—150 m K3 Busan-Imari-(→Kansai)296226— 70120 m

3 Estimated construction costs

Based on the findings from the analysis in the previous section,construction costs for Japan-Russia and Japan-South Korea interconnectors are estimated.Some of the possible routes may require enhancement of capacity in Japan between a landing point and demand centers.The costs for such enhancement are also estimated.Then,an overall picture of the interconnector,which covers transmission lines in Japan,is presented.The Study Group also reviews additional cost items to be examined.

3.1 Estimation of construction unit cost

Before estimating the total cost,The Study Group first calculates how much the construction of interconnector will cost per kilometer.The basic assumption is that the interconnector,including transmission lines in Japan,has a capacity to transport 2 GW of DC power.DC power is adopted because,unlike AC power,it has a lower transmission loss rate and enables the frequency to be controlled in individual areas.Together with the unit cost for submarine cables and AC/DC converters,which account for most of the construction expenses,the cost for overhead lines and underground cables per kilometer is also calculated,so that they will be compared with the construction cost for transmission lines in Japan.Conditions under which calculations are performed,sources of reference data are summarized below in Table6.

Table6 Calculation of construction cost

Item Cost Reference Note Submarine cables 293 mn.JPY/km DC submarine transmission line projects in Europe(SAPEI [13],MON.ITA [14],NordLink[15],North Sea Link[16])DC ±500 kV;transmission capacity:2 GW;MI cable; 3 cables;calculated assuming that cables are laid separately AC/DC converter JPY/unitENTSO-E2011.[17]15.7 bn.VSC 1,250 MW;Lowest value at 500 kV Overhead lines 664 mn.JPY/km Data from Tohmatsu on construction cost for transmission lines(2012).[18]Estimated cost for DC 500 kV Underground cables 915 mn.JPY/km Standard cost estimated by OCCTO (March 29,2016).[19]Estimated cost for DC 500 kV

The overall composition of interconnector is defined by the configuration of its main circuit and types of AC/DC converters adopted for it.Information about such factors was also collected from experts and service operators.

For submarine cables,the Study Group assumes its main circuit configuration adopts the bipole/one circuit,metallic return method,with three cables of the same specifications,including the metallic return.Per-kilometer construction expenses for submarine cables are calculated based on cost data obtained from several DC submarine cable projects in Europe designed to transfer electricity at a similar voltage,after adjusting differences in transmission capacities and the number of cables,which depends on whether the metallic return method is adopted or not.Construction of submarine cables reportedly costs 293 million JPY/km.For AC/DC converters,VSC models are adopted,and that a 1 GW-class converter costs 15.7 billion JPY [17].Construction of overhead lines,DC transmission lines of ±500 kV,costs 664 million JPY/km [18],and that of underground cables requires 915 million JPY/km [19].

As seen in the table 6,construction of submarine cables costs the least per kilometer,less than half the cost for overhead lines and one-third of the expenses for construction of underground cables.The difference seems to partly reflect the price competition induced by recent rapid development of long-distance DC submarine cables in Europe.In Japan,construction of overhead lines costs more than double that it does in Europe [20] and the United States [21],presumably a consequence of some unique conditions in the country.It should be considered with the cost recovery mechanism in Japan.

For this report,the unit currency is set in Japanese Yen(JPY).This is as a result of consideration to use this cost with the market price in Japan for the next study.

3.2 Estimated cost for Japan-Russia interconnector

For Japan-Russia interconnector,The Study Group examined three possible cross-border routes in the previous section (Fig.2).

Table7 Construction cost for Japan-Russia interconnector(cross-border routes)

Kashiwazaki 1,255 km 367.7 bn.JPY Sakhalin-62.8 bn.JPY(4 units)430.5 bn.JPY Sakhalin-Ishikari 455 km 133.3 bn.JPY 62.8 bn.JPY(4 units)196.1 bn.JPY Sakhalin-Wakkanai 161 km 47.2 bn.JPY 62.8 bn.JPY(4 units)110.0 bn.JPY

Table8 Estimated cost for Japan-Russia interconnector(Enhancement of routes in Japan)

Wakkanai-Kashiwazaki(Onshore;Overhead lines)197.2 bn.JPY 234.4 bn.JPY 297 km 800 km 31.4 bn.JPY(2 units)463.0 bn.JPY Ishikari-Fukushima(Onshore;Underground cables)108 km 683 km 98.8 bn.JPY 200.1 bn.JPY 31.4 bn.JPY(2 units)330.3 bn.JPY

Estimated expenses for submarine cables and AC/DC converters,along with the total construction cost are summarized below in Table7.Table8 summarizes expenses needed to enhance possible routes in Japan.For onshore sections,transmission lines may be constructed either overhead or underground.This report assumes that,between Wakkanai and Ishikari,mountainous regions,lines are constructed overhead,and that between Ishikari and Tomakomai,mostly urban areas,cables are laid underground.

Based on the two tables above,Table9 presents an overall picture of R1 - R4 (Fig.4),which covers cross-border lines as well as enhancement of routes in Japan.Compared with what links Sakhalin directly with Kashiwazaki,the routes going through Hokkaido cost 10%to 30% more for construction due mainly to higher expenses for onshore transmission lines.Meanwhile,they,as mentioned in the previous section,may be used efficiently to transport electricity generated from wind power in Northern Hokkaido.

Table9 Overall picture of construction cost for Japan-Russia interconnector

R1 Sakhalinbn.JPY— 430.5 bn.JPY Kashiwazaki 4 units 430.5 R2 Sakhalin-Ishikari-461.9 bn.JPY R3 Sakhalin-Wakkanai-Kashiwazaki 6 units 196.1 bn.JPY 265.8 bn.JPY Ishikari-Kashiwazaki 6 units 110.0 bn.JPY 463.0 bn.JPY 573.0 bn.JPY R4 Sakhalin-Ishikari-Tomakomai-Fukushima 6 units 196.1 bn.JPY 330.3 bn.JPY 526.4 bn.JPY

3.3 Estimated cost for Japan-South Korea interconnector

For Japan-South Korea interconnector,three possible cross-border routes are examined in the previous section(Fig.3).Estimated expenses for submarine cables and AC/DC converters,along with the total construction cost are summarized below in Table10.

Table10 Construction cost for Japan-South Korea interconnector (cross-border part)

Section Length Submarine cables AC/DC converter Total Busan-Maizuru 627 km 183.7 bn.JPY 246.5 bn.JPY Busan-Matsue 372 km 109.0 bn.JPY 62.8 bn.JPY(4 units)171.8 bn.JPY Busan-Imari 226 km 66.2 bn.JPY 62.8 bn.JPY(4 units)62.8 bn.JPY(4 units)129.0 bn.JPY

Table11 Construction cost for Japan-South Korea interconnector (Enhancement of routes in Japan)

Section Length Submarine cables/Overhead lines AC/DC converter TotalOita-Ikata(Submarine cables)70 km 20.5 bn.JPY 62.8 bn.JPY(4 units)83.3 bn.JPY(Overhead lines)41 km30.6 bn.JPY—30.6 bn.JPY Matsue-Hino

Table11 summarizes expenses needed to enhance possible routes in Japan.

The Study Group estimates the construction cost for enhancing the two sections mentioned in the previous section - a submarine cable that links the Kyushu area,where cables make landfall,with the Shikoku area,and an overhead line (Matsue-Hino) that goes onshore once cables make landfall in the Chugoku area.As stated in the previous section,the submarine cable would have a transmission capacity of 1 GW.Here,for ease of calculation,its capacity is assumed to be 2 GW,just as the other routes.For the perkilometer construction cost needed to enhance overhead lines,an estimate presented by Tohmatsu [18],746 million JPY/km,is wholly adopted,as it is for AC 500 kV.

Table12 then presents an overall picture of K1 - K3 (Fig.5),which covers enhancement of routes in Japan.The route for interconnector cables that make landfall in the Kyushu area could also be used efficiently to transport renewable electricity generated in Kyushu.It could also make the best of existing electrical grids in the Shikoku and Chugoku areas.

Table12 Overall picture of construction cost for Japan-South Korea interconnector

Route AC/DC Converter Crossborder In Japan Total K1 Busan-Maizuru 4 units 246.5 bn.JPY—246.5 bn.JPY K2 Busan-Matsue-Hino 4 units 171.8 bn.JPY 30.6 bn.JPY 202.4 bn.JPY K3 Busan-Imari/Oita-Ikata 8 units 129.0 bn.JPY 83.3 bn.JPY 212.3 bn.JPY

Both of Japan-Russia interconnector and Japan South Korea interconnector,there are positive points and additional costs in each route.Therefore,the desirable route will be considered after a cost-profit analysis.

The capacity factor is also to be considered at a stage of cost-profit analysis.

3.4 List of additional cost items

In the sections above,the construction costs have been examined in terms of expenses for laying cables,including materials for cables,and installing AC/DC converters.Here,The Study Group reviews some additional cost items that should be examined despite the limited impact they would have on the total construction cost.It might be only a few percentages for the construction cost except for the O&M cost.The O&M cost is to be considered at a stage of costprofit analysis.

(1) Other expenses for laying cables:

Cable laying vessels must be mobilized and demobilized.Other items that will also be needed include,depending on conditions; horizontal directional drilling (HDD) around landing points; protection work around any intersection with existing pipelines or cables; dredging work; and barges for laying cables in shallow waters.

(2) Operation and maintenance (O&M):

Generally,operation and maintenance costs 1% to 3% of the total construction expenses each year.

(3) Route survey:

Before designing a route,some survey must be performed.It may cost more than billions of JPY,depending on the survey items and length of a route.

(4) Fluctuation of material prices:

Prices of copper,conductor for cables,and other materi-als may change along with market fluctuations.

(5) Compensation for fishing industry:

When there is an active fishing industry around a landing point,fishermen's associations and other stakeholders may be compensated.

(6) Environmental impact assessment:

The Ministry of Environment is studying environmental assessments of submarine cables for off-shore wind power plants and other facilities.Environmental impact assessment may also be required for interconnectors.

4 Summary of estimated construction cost

Construction of interconnectors with a transmission capacity of 2 GW,including enhancement of sections in Japan,between Japan and Russia and between Japan and South Korea costs 430.5 - 573.0 billion JPY and 202.4 -246.5 billion JPY,respectively.According to data from the ten power companies in Japan for the 23 years between FY1993 and FY2015[22],their annual capital expenditure for transmission and distribution facilities and substations stood around three trillion JPY in the 1990s,before falling down gradually,and staying around one trillion JPY from FY2004 onwards.During these 23 years,they have an annual capital expenditure of 1.8 trillion JPY on average.It turns out that the ratio of the construction cost for Japan-Russia and Japan-South Korea interconnectors mentioned above,divided by 25,the number of years for recovering capital expenditure,against the average annual capital expenditure of the ten Japanese power companies is 1.3%and 0.5%,respectively,at the maximum.

Among the possible Japan-Russia routes,the construction cost turns out to be the lowest for one that is connected at a location near a demand center through a long-distance submarine transmission line.On the other hand,when a cable makes landfall in Hokkaido to be connected with renewable energy sources available there,transmission lines in Japan can also be used as a crossregional interconnector,one of the multiple benefits expected.