Japan Releases Its Triennial Energy Plan—Something Old, Something New, Something Borrowed, and Something “Green"
July 13, 2018
- The Japanese government approved the nation’s fifth long-term energy plan on July 3, 2018.
- The latest version of the Basic Energy Plan, which the government is mandated to issue every three years, reviews Japan’s progress on meeting the energy and electricity supply targets for 2030 as laid out in the fourth plan and outlines how the nation plans to achieve those targets.
- The 5th Basic Energy Plan also presents the government’s thinking on the challenges of energy transitioning to a lower-carbon energy system for the purposes of addressing climate change out to 2050.
As the old adage goes: The Basic Energy Plan contains something “old”—long-held high priorities for the cabinet of Prime Minister Shinzo Abe; something “new,” reflecting energy-related developments in the last three years; at least one element “borrowed” straight from the previous plan; and rather than something “blue,” the plan highlights “green” or clean energy as a top priority.
First and foremost, nuclear energy continues to be viewed as an important base-load for the nation’s electricity supply. The government has essentially doubled down on its commitment to restart many of the reactors that await regulatory approval or technical upgrades necessary for restarting those facilities. Moreover, just like the previous plan, the new plan notably does not call for new plant construction or replacement of retiring plants. New builds remain highly contentious in Japan in the wake of a serious nuclear accident earlier this decade, the effects of which are still being felt by the 24,000 people who remain under an evacuation order even today.
Another key area of continuity is the strong recognition placed on the value of natural gas for Japan’s energy, economic, and climate security. The Japanese government reaffirms its interest to help enhance liquidity in the global market for liquefied natural gas (LNG) and facilitate competition, as well as provide capacity building to help grow LNG demand in developing economies.
In the “something new” bucket is the government commitment to reduce its 47 tonnes of plutonium stockpile—a recognition by Japanese policymakers of the international community’s concerns about the potential nonproliferation implications. Delayed nuclear restarts, especially those that can utilize mixed oxide (MOX) fuel, which recycles plutonium from reprocessed spent fuel, have caused the stockpile to grow in recent years. The pace of nuclear restarts is one key determinant as to whether Tokyo can deliver on the pledge by the next iteration of the energy plan.
Also in the “something new” bucket is the call for phasing out low-efficiency, high-emission coal-fired power generation technologies at home, and limiting Japan’s coal power technology exports to high-efficiency, low-emission advanced technologies only in response to request from countries that lack alternatives from energy security and economic feasibility perspectives. This is an issue where the world has recently witnessed a visible gap between Japan, which is a major backer of advanced coal technology, and many of its Organization for Economic Cooperation and Development (OECD) cohorts, whose national leaders are calling for coal phase-out. The language reflects Tokyo’s effort to balance its responsibility as a Paris Agreement signatory as well as its commitment to sustainable development, and the economic interest in meeting market demand. This development seems to go hand-in-hand with a series of recent announcements by Japanese insurance companies and major commercial banks that acknowledge the climate concern associated with coal-fired power generation and the risk of financing such projects. At least one has decided to limit financing to ultra-super-critical coal-fired power projects while another has decided to stop financing any new coal project overseas.
Japan’s priorities and strategies as outlined in the plan are a product of careful analysis of several developments in the global energy markets and on the energy technology frontier, as well as geopolitical and regional affairs, but the plan essentially “borrows” the nation’s 2030 electricity mix outlook from the previous plan: 56 percent from fossil fuel sources, 22–24 percent from renewables, and 20–22 percent from nuclear energy. As the mix stands today, however, 80 percent of Japan’s electricity generation comes from fossil fuel sources, 15 percent from renewables, and 2 percent from nuclear. How nuclear power generation may achieve the target remains to be seen in the absence of new builds or the extension of operational license beyond 40 years.
Then, there is something “green.” Setting the 2030 target for the share of zero-emission power sources at 44 percent in its total electricity generation, the Japanese government acknowledges the value of nuclear as a zero-carbon power source. Yet, the latest plan also sets maximizing renewable energy use as a key element in Japan’s effort to raise the share of non-carbon-emitting sources of electricity. Since a Feed-in-Tariff (FiT) was introduced in July 2012, renewable energy has expanded in the nation’s power generation mix. While the cost competitiveness of renewables has increased around the world, the cost of power generation from renewable sources has remained high in Japan. In particular, installation costs are notably higher in Japan than the global average. The fifth plan calls for continued leadership at the cabinet level and stronger interagency coordination as the nation undertakes necessary reform of the FiT system, review of the regulatory framework, and research and development for further cost reduction, among others. How much renewables may grow in Japan’s power mix will be another focus of the plan worth watching in the coming years.