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Future of clean energy in Japan remains uncertain amidst crosswinds

By Hannah Levitt

The future of large-scale renewable energy generation and distribution in Japan remains unclear due to industry complexities six years after the Fukushima plant accident.

Although Japan committed to a 26 percent greenhouse gas emission reduction by 2030 as part of the 2015 Paris Agreement on climate change, fossil fuels made up 92 percent of Japan’s total energy consumption in 2015, according to a U.S. Energy Information Administration report.

By contrast, nuclear energy made up less than 1 percent of Japan’s total energy consumption in 2015. In 2010, prior to the Fukushima nuclear accident that resulted from an earthquake, nuclear power accounted for 13 percent of Japan’s total energy consumption, according to the same report.

Although the current government has said it intends to resume using nuclear energy, just three of Japan’s 54 nuclear reactors were in operation as of August 2016, according to the EIA.

The Japan External Trade Organization, called JETRO, identifies Electricity and Renewable Energy as one of three attractive sectors for overseas companies to invest in; however, JETRO’s promotion of foreign direct investment in this sector is limited to merely providing information, due to industry complexities and technical issues.

“We do not specifically promote FDI regarding electricity from other parts of the world,” said Yutaro Ono of the JETRO Invest Japan Coordination Division.

“Some research reports about Japanese markets or Japanese regulation regarding electricity have been published in English so maybe we provide some sort of information to foreign companies, but that is all at this point,” Ono said.

Energy Mix Japan
Japan’s energy mix in 2015 and projected energy mix for 2030. Japan committed to a 26 percent reduction in greenhouse gas emissions by 2030 as part of the Paris Agreement. (Hannah Levitt/MEDILL)

In 2013, JETRO helped French solar power plant company Ciel & Terre establish a business in Japan by providing office space, consultation with experts, legal advice and market information to the company.

In the same year, Ciel Terre Japan KK installed and connected a floating solar power plant with a generation capacity of 1.18 megawatt peak, or the consumption of approximately 400 households, according to a JETRO report on the project.

According to the same report, one of the reasons that the company decided to enter the Japanese market is a tariff scheme guaranteeing fixed prices for renewable energy-generated electricity purchases for an extended period of time, greatly reducing the energy operators’ risk of entering the business.

Steve Kux, climate change and energy policy analyst at the David Suzuki Foundation, in Canada, said that he is optimistic about the future for renewables in Japan.

“In terms of renewables there are a lot of things working in their favor,” Kux said. “The costs are continuing to come down and the efficiency is going up.” He said that policy options, such as the favorable tax structure that led Ciel & Terre to invest in Japan, are favorable to growing the clean energy sector.

Kux said that Japan’s greatest challenge lies in education and awareness because a lot of the population is currently hesitant to welcome new forms of energy after Fukushima. People need more information about these new forms of energy to feel safe, he said.

Photo at top: View of Kamakura, a coastal city in Japan. Like Fukushima, Kamakura was affected by the 2011 earthquake and tsunami, although considerably less due to its distance from the epicenter. (Hannah Levitt/MEDILL)