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Japan: Prioritizing Renewables, Downplaying Nuclear

Copyright © 2021 Energy Intelligence Group

A newly unveiled revision of Japan's sixth “basic energy plan” gives renewables "top priority" in the drive to slice greenhouse gas emissions 46% by fiscal 2030 compared to 2013 levels. The nuclear target of 20%-22% remains unchanged with no mention of newbuilds or replacement plants. The draft released Jul. 21 nearly doubles the 2030 renewables target from 22%-24% in the fifth basic plan to 36%-38% but retains the same nuclear target (NIW Jul.6'18). The new renewables target falls short of the more than 40% share that environmental organizations, many local governments and even some ruling party politicians -- such as Environment Minister Shinjiro Koizumi -- believe is necessary and attainable to meet carbon reduction goals, considering renewables contributed 18% to Japan's electricity supply in fiscal 2019 and nearly 21% in calendar 2020. With nuclear contributing just 6% to the grid in fiscal 2019, the 20%-22% target is generally considered unrealistic. The plan aims for a sharp decline in fossil fuel power generation from 76% in 2019 to 41% in 2030 compared to the fifth plan's 56% target. LNG shares are expected to decline from 37% in 2019 to 20% in 2030, while coal drops from 32% to 19%, and petroleum and other fuels from 7% to 2%. The draft blueprint was released during a subcommittee meeting of the Advisory Committee for Natural Resources and Energy of the Ministry of Economy, Trade and Industry (Meti). After final adjustments by the advisory committee, Meti will submit the draft for public comment, but the Cabinet is not expected to finalize the sixth basic energy plan until after upcoming lower house Diet elections expected in October. Although the nuclear targets remain unchanged from the 2018 plan under former Liberal Democratic Party (LDP) Prime Minister Shinzo Abe, the clear tilt toward renewables basically transcends that plan's bipolar framework that promoted renewables as the "main force" in Japan's future energy picture alongside nuclear as a "main baseload" through 2050. This shift reflects intensifying international and domestic pressure on Tokyo for action on the global climate crisis. After announcing a commitment to net carbon neutrality by 2050, new LDP Prime Minister Yoshihide Suga hiked Japan's pledge to cut greenhouse gas emissions from 26% to 46% by 2030 in response to pressure from US President Joe Biden during an April climate crisis summit in Washington, DC. This pledge, and acknowledgment of nuclear's rising costs compared to renewables, may explain the shift even given the LDP's generally nuclear-friendly stance, analysts told Energy Intelligence. Citizens Nuclear Information Center (CNIC) Secretary-General Hajime Matsukubo told Energy Intelligence that the Japanese government “must meet the 2030 emissions target and the 2050 carbon neutral goal and cannot rely on nuclear or uncertain hopes for zero-emission thermal power. Hence, its only option is to put priority on renewables.” Despite Meti's recent push for “maximum utilization” of nuclear power, the draft plan cautiously describes nuclear as “a practical decarbonization option” the use of which is predicated on “prioritizing safety” (NIW Jun.11'21). The document also sets preconditions to utilizing nuclear power, including “restoring social trust” through “further improving safety and dealing with back-end problems such as decommissioning and waste treatment and disposition” and retained advocacy of the controversial “nuclear fuel cycle.” However, the omission of any mandate for new or replacement reactors is a major setback for the Federation of Electric Power Companies (FEPC) and other industry and commercial federations as well as for ruling LDP heavyweights such as Abe and LDP Secretary-General Toshihiro Nikai. (NIW May28'21). On the other hand, the draft blueprint declares the government will give "top priority" to renewables as "the main power source" and "promote maximum introduction while trying to reduce the burden on the people and coexist with localities." The draft also expresses a commitment to "reduce costs, overcome system restrictions, rationalize and promote research and development." Moreover, the draft emphasizes that the 36%-38% range for fiscal 2030 “is not a cap but rather a target that will be raised even higher in the future if initiatives that cannot be envisaged at this time are taken.” Tokyo-based Renewable Energy Institute (REI) REI Director Mika Ohbayashi said in a Jul. 21 statement that "many businesses and local governments called for a high target of 40%-50% for the renewables introduction.” Targets for solar and onshore wind power had already been upwardly adjusted in a Jul. 13 subcommittee meeting. Mixed Reactions Initial reactions varied widely. Yukio Asanuma, an analyst for Moody's Japan, told Energy Intelligence that the plan "will be a credit negative for the power industry over the next several years as electricity companies will be challenged to meet the plan's ambitious targets for a greener energy mix as well as lower power consumption and rates." Increased investments in renewables as well as in transmission and distribution "will entail funding that could add financial leverage, while power companies’ margins could be pressured by lower sales due to the impact from improving energy efficiency and conservation and lower rates, unless mitigated by earnings from new investments," she warned. Fukui Prefecture Governor Tatsuji Sugimoto, one of the subcommittee members, told reporters Jul. 21 that there was "a contradiction" between the approval of nuclear's use "while reducing dependence as much as possible” and remarked that the lack of mention of “replacements” was “strange,” Mainichi Shimbun reported. International University of Japan Vice President Takeo Kikkawa, also a member of the advisory panel, told the conservative Sankei Shimbun that said the revised “ambitious” targets were “unrealistic.” He warned that “it will be very difficult to achieve the energy mix in fiscal 2030,” citing the decision not to include the replacement of nuclear power plants. An editorial in Asahi Shimbun Jul. 22 lauded the decision to put “top priority” on renewable energy as the main power source for the future, but commented that “leaving the ratio of nuclear power unchanged at 20-22% is incomprehensible.” Tohoku University Environmental Economist Jusen Asuka told Energy Intelligence that “the share of renewable energy has risen a lot, but neither this or the level of power reduction through conservation and efficiency compared to the fifth plan are enough to meet carbon reduction goals.” Dennis Engbarth, Taipei City Japan's 2030 Fuel Mix Targets (%) Latest

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