Renewable Energy Outlook in Japan

Renewable Energy Outlook in Japan

Renewable Energy Outlook in Japan

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Japan Energy mix trend and forecast

During the 25th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP) in Madrid, Spain, Japan was awarded “Fossil of the Day” as a non-cooperative country for global warming countermeasures from the international environmental NGO Climate Action Network.

This was because Japan has to rely on fossil fuel power generation since nuclear power plants have been almost inoperable due to the damage caused by the Great East Japan Earthquake of March 2011, however, Japan has been trying to overcome this situation with renewable energy.

Before the earthquake, the energy mix was 65% for fossil fuels, 25% for nuclear power, and 10% for renewables. In 2016, these ratios changed significantly to 83% for thermal power, 2% for nuclear power, and 15% for renewables.

The government and industry are working to balance this by 56% for thermal power, 20-22% for nuclear power, and 22-24% for renewable power in 2030, and renewable energy will greatly erode the share of thermal power compared to before the earthquake

Renewable energy will increase by approximately 40% in 2030 compared to 2017, and if we look at the status of each power generation facility, solar plans to increase by approximately 25 GW from 39.1 GW of 2017 to 64 GW of 2030, and further expanding the market size is expected. The growth rate is about 200% for Wind and about 130% for Biomass, and renewable energy is expected to expand in various fields.

Issues and business Opportunities

Storage of power:

The development of battery facility is necessary to solve the issue of power transmission efficiency as well as to be used in a blackout situation. Among the renewable energy sources, solar power and wind power have the disadvantage that the amount of power generation depends on the weather and is difficult to control. “Battery storage” is expected as a device that solves the problem of renewable energy instability. “Batteries for power grids” are used by connecting to the power grid (the entire power system from power plants to transmission and distribution). If this large-scale storage battery is connected to a renewable energy power plant or mains system, it can stabilize grid power by charging electricity when power is enough and discharging when power is insufficient. The Japanese government is supporting the experiment to prove the efficiency of this battery storage system.

Japan renewable energy 2020 outlook
Solar Panel Farm in Japan

Reduction of generation cost:

Power generation cost in renewable energy in Japan is double of most of European countries and the method of facility procurement needs to be changed. Since the introduction of the feed-in tariff (FIT) in July 2012, the introduction of renewable energy has been rapidly progressing, but the cost of power generation is high compared to international standards. Japan needs to generate renewable energy as a cost-competitive power source through significant cost reductions and innovation.

Promotion of biomass power generation:

Japan has enormous forest stocks which were not utilized effectively due to low marketability.  Construction of many new plants is on-going and expected to be increased. Biomass power generation needs to be promoted in conjunction with agriculture and forestry in the region. Japan needs to resolve the issues such as how to reduce the fuel costs which account for 70% of generation cost, how to deal with the situation that the facilities based on the imported fuels and how to stably procure the biomass.

Promotion of VPP:

To effectively handle the power demand and the supply in the region of renewable plants, technologies of virtual power plants must be implemented.  The virtual power plant (VPP) refers to a virtual configuration of a power generation/regulation function such as a power plant by remotely controlling energy resources scattered on a grid, such as (1) renewable energy power generation facilities like solar power generation, (2) energy equipment such as storage batteries, and (3) consumer-side efforts such as demand response (DR). To realize these functions, the technologies to enable the energy to provide the adjusted power within the required response time and to ensure the cybersecurity measures in VPP.

Off-shore wind power

To secure new power plant sites, offshore sites must be developed as well as the development of technologies and competitive facilities sources. “Act on Promotion of Utilization of Sea Areas Related to Development of Marine Renewable Energy Power Generation Facilities (Renewable Energy Sea Use Law)” was enforced in April 2019. This new Act will open a way to resolve the issues regarding the occupation of the sea area and needs to coordinate the interests with people who use the sea area such as fishery operators and ship operators. The size of the market is estimated to become 125 billion euro and it is expected that the business will be able to proceed with appropriate adjustments in the future.

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