Japan confirms role of renewables and nuclear as the 5th Strategic Energy Plan is approved by the Japanese Cabinet.
On July 3, the Cabinet of the Japanese government approved the country’s 5th Strategic Energy Plan after receiving the final draft the Ministry of Economy, Trade and Industry (METI). The plan is significant as it sets forth the government’s approach to energy policy for the future and is considered one of the key documents indicating the government’s direction with respect to national energy supply and energy markets. It is closely watched by the corporate and civil sectors alike both home and abroad.
The Japanese government is required by law to reevaluate and issue a strategic energy plan at least every three years and, while it is not a binding legal instrument, it has become a de facto policy tool that has been followed by the various government agencies and departments in each of its iterations. It also serves as a market signaler and seeks to provide long-term certainty to energy market participants and allay any fears of a sudden policy shift.
Future Energy Mix
A key element of the strategic energy plan is the government’s future energy mix predictions, with the current benchmark date being 2030. In the plan, METI maintained the same energy source ratio for 2030 as it had outlined in the previous strategic energy plan in 2013 and in its long-term energy supply and demand outlook issued in 2015. The desired energy ratios set forth a balanced approach to the full range of power generation options, including both renewables (22 to 24 percent) and nuclear (20 to 22 percent).
While the ratios have remained the same, what is new is that renewable energy sources were designated as a “main source of power generation” for the first time. Some see this as a major shift in government policy that recognizes that in the future renewable energy has a role to play as a baseload power source and not only as auxiliary power. As it currently stands, renewable energy in Japan accounted for 15 percent of the energy mix in 2017, up from 10.7 percent in 2010. Renewable energy proponents are encouraged by the upward trend in market penetration but also consider that Japan could do more to extend the 20-22 percent target for 2030, especially as the renewable energy target is significantly lower than similar targets set by other G7 countries.
The Future Challenge of Nuclear and Coal Power
The plan makes it abundantly clear that the Japanese government still sees nuclear power as playing a significant role in the energy market as well as being an important method of meeting its environmental commitments.
