The Japanese government is currently preparing its 7th Strategic Energy Plan and released its draft plan for public comments in December last year. Reflecting on the war in Ukraine and the growing tension in the Middle East, from which Japan imports the majority of its crude oil, the draft plan emphasizes the importance of a stable energy supply and of close cooperation with industries to achieve decarbonization and energy transition. As the draft plan also states, renewable energy plays a key role in advancing Japan’s green transition. However, the path to replacing fossil fuels with renewable energy does not look so straightforward.
The Japanese government is currently preparing its 7th Strategic Energy Plan (the English translation is available only up to the sixth plan) and released its draft plan for public comments in December last year. Reflecting on the war in Ukraine and the growing tension in the Middle East, from which Japan imports 90% of its crude oil supply, the draft plan emphasizes the importance of a stable energy supply and of close cooperation with industries to achieve decarbonization and energy transition.
Renewable energy plays a key role in advancing Japan’s energy transition. Supplemental data to the draft plan elaborate on the projected energy mix to be achieved by 2040. According to this data, the provisional mix will consist of renewable energy (approximately 20-50%), thermal energy (approximately 30-40%), and nuclear energy (approximately 20%). Out of renewable energy, approximately 23-29 % accounts for solar energy, followed by wind (approximately 4-8%), hydraulic (approximately 8-10%), geothermal (approximately 1-2%) and biomass (approximately 5-6%). Solar energy, in particular, is expected to become the primary source of energy as its share is projected to grow twice from that of 2022 (21.8%) by 2040. The accelerating deployment of renewable energy is essential for Japan from the stand point of energy security as the country’s energy supply has long depended heavily on imports of natural resources, such as coal, natural gas, and crude oil. This heavy reliance on imports makes Japan vulnerable to external factors, such as shipment disruptions, which is rather ironic, considering that Japan is one of the major exporters of clean energy technologies, as characterized by the production of electric cars. To put it differently, Japan is not able to power its own eco-friendly technologies through its own green energy.
Promotion or Caution—a Complex Policy Landscape
Considering the vulnerabilities within the existing energy system and the technological advantage Japan holds, one might imagine the country is keen on deploying all of its know-how to accelerate energy transition and diversify energy sources. However, the path to renewable energy in Japan geared for the 2040 goals does not look so straightforward.
In the draft energy plan, there is a section dedicated for the topic of “coexistence (of renewable energy) with local communities”. The plan emphasizes that renewable energy needs to be accepted by regions and local communities as a long-term, stable energy source. Such acceptance is vital, according to the plan, because the introduction of the Feed-in-Tariff System in 2012 and the rapid expansion of renewable energy market in the following years brought skepticism regarding the safety of renewable energy facilities as well and their potential impact on disaster prevention measures, landscape, and the natural environment. Indeed, Japanese media outlets frequently report disputes with solar companies in particular. To list a few examples, one of the national newspapers reported that a solar farm constructed on a slope was alleged to have caused landslides and damaged houses and rice fields in the surrounding areas. Another article reported disputes between local authorities and solar companies that led to the cancellation of solar projects. In Nara Prefecture, the governor’s decision to develop a large solar farm on publicly owned land sparked strong opposition in local communities. Lastly, Japan Times published an article with a telling title, ‘Megasolar’ is a dirty word in Japan. Where do solar projects go from here?
The draft energy plan’s rather polite approach to promoting renewable energy also coincides with the 2024 amendment of the Renewable Energy Act and well over 200 of local ordinances with regard to the construction of renewable energy facilities. The Renewable Energy Act was initially established to promote renewable energy. The amendment, however, added new rules and penalties for renewable energy providers to ensure their facilities would not harm local communities. According to the Tokyo-based Research Institute for Local Government, as of November 2024, in addition to the national policy there are 290 municipalities and 8 prefectures that have introduced ordinances regarding renewable energy facilities. Many of these ordinances are intended to restrict the establishment of renewable energy facilities.
Corporate and consumer interests complicate the picture further. In a public comment on the draft energy plan, the Federation of Electric Power Companies of Japan—composed of ten major electric companies that own the power grid, nuclear power plants and many of the existing thermal power plants—expressed reservations about the possibility of a hasty decommissioning of the existing power plants without securing alternative sources of energy. These major electricity companies used to enjoy a regional market monopoly in Japan until retail electricity became fully deregulated in 2016. While deregulation opened doors to the new generation of electricity providers, some newer providers failed to stay in business. As a result, major companies continue to be regarded as reliable choices for consumers.
Communal Energy Production and Consumption to Navigate the Challenges
Transition to renewable energy in Japan is confronted with growing local skepticism, conflicting corporate and consumer interests, and restrictive regulations at the national, regional and municipal levels. Therefore, the question of how to accelerate the transition remains critical. In this regard, it is worth noting local movements toward communal production and consumption of electricity. These ‘place-based’ approaches may hold the key to a stable provision of electricity by renewable energy that is accepted by local communities.
Multiple municipalities across Japan are working toward generating and consuming energy locally. For example, Hamamatsu—a city located approximately 250km West of Tokyo—is one of the pioneers of communal production and consumption of electricity. Hamamatsu Energy Co., Ltd was founded in 2015 and began its operation in 2016. Focusing on solar and biomass, the company powers homes and businesses using energy produced at multiple facilities, including large solar farms, that are located throughout the city.
In Kagoshima Prefecture in the southwestern island of Kyushu, the municipality of Kimotsuki is aiming to form its own “Stadtwerke”—a form of communal utility company common in Germany and Austria. The municipality enjoys a topographical advantage ideal for hydraulic, wind, and solar energy. The existing renewable energy facilities, however, have been operated by companies located outside of the area, and the municipality has not been able to profit from them beyond tax revenues. To change this situation, the municipality established two business entities: a communal retail energy provider in 2017 and a company focusing on installing renewable energy facilities and generating electricity in 2024. The generated electricity will be purchased by the communal provider to establish a self-sustaining and self-reliant system.
Periphery as the New Center of Energy Transition?
Tokyo has long been known as the center of national politics, core governmental functions, and of business and commerce in Japan. Over 30% of the country’s population now resides in Tokyo. According to the Cabinet Office of the Government of Japan, Tokyo has been marked by a constant inflow of a young labor force over the past decades. As a result, the population and economy in the peripheral regions steadily shrank. Self-reliant energy production and consumption not only creates green jobs, but also provides an impetus to redefine the periphery as the new center of renewable energy, especially if more municipalities across the country follow suit. In other words, communal energy can help give peripheral regions more agency and autonomy. The draft Strategic Energy Plan does indeed mention the potential of communal production and consumption of energy, though it occupies only a small role in the overall plan. The revised plan will hopefully lean into this emerging trend and link its role with the country’s energy transition with more confidence.
Fumie Nakamura
