Can Japan accelerate the introduction of renewable energy?

At last November’s COP26, many countries agreed to accelerate the phase-out of coal-fired power generation and inefficient fossil fuel subsidies to achieve carbon neutrality by 2050.

Despite agreeing on this mission, Japan declared to continue thermal power generation using coal and other fossil fuels, while assuming “zero-emission thermal power generation” using hydrogen and ammonia. That was why Japan received “the Fossil of the Day,” awarded to the country with the most negative contribution to the negotiations.

How will Japan’s introduction of renewable energy proceed in the future?

How far is Japan behind other countries in 2022?

Japan ranks 6th in the world in renewable energy capacity, but the percentage of renewable energy to total electricity generated in 2022 is 22.4%. It is rising by about 1% to 2% each year but will need to increase by at least 1.7% each year to achieve the government’s goal of increasing renewable energy to 36% to 38% by 2030.

On the other hand, in Europe, efforts toward renewable energy are progressing faster. The average share of electricity generated across 28 European countries, including the UK, has already reached about 38% in 2021, almost on par with the share of electricity generated from fossil fuels. In Austria in particular, the share of renewable energy has reached nearly 80%, while in Denmark the share of Variable Renewable Energy has reached 53%.

In addition, China accounted for 46% of the new generating capacity added in the world in 2021, subsidies have led to record growth in offshore wind, which has increased six times.

The future of renewable energy in Japan

As we’ve talked about in previous articles, the reasons for Japan’s lagging in renewable energy remain issues such as high initial costs, difficulty in controlling the amount of electricity generated in cooperation with other countries, a small amount of space for power generation, its impact on the landscape, and storage costs.

In addition, the reserve ratio of electricity supply in the winter of 2022 is expected to fall below the 3% reserve ratio required for a stable supply. The government has indicated a policy of supplementing the shortage with thermal and nuclear power generation. That could lead a long way to carbon neutrality.

On the other hand, following the Feed-in Tariff law for the market price of electricity (led to an 18% surge in the share of electricity generated from renewable energy sources over the past seven years,) a new Feed-in Premium law has been in effect since April 2022 (linked to the market price and adds a certain premium to it.) By incorporating the principle of competition, the law is expected to increase the number of renewable energy installations and the resulting stable electricity supply.

Research and development of renewable energy power generation are also progressing, with offshore wind, hydrogen, and ammonia energy thriving. Offshore wind power, in particular, is an area in which European companies are participating, and collaboration with major Japanese companies is expected.

In addition, the ministry of Economy, Trade and Industry has establish 2 trillion yen Green Innovation Fund for companies working on innovations toward carbon neutrality, encouraging the participation of small and medium-sized enterprises and venture companies.

The cost of renewable energy generation, while still high compared to the rest of the world, is decreasing, and the hurdle to adoption is steadily falling. To achieve the target by 2030, in addition to Japan’s challenges, such as cooperation with local communities to secure power generation space, the government will need to find an attractive system that overcomes the biggest challenge: encouraging companies and households to make the energy shift and to sustaining a stable supply.