Japan Faces Stiff Challenges to Meet Targets in New Energy Plan; Rising Electricity Demand Fuels Difficulties

By Kazuma Nagahara and Miho Naganuma / Yomiuri Shimbun Staff Writers

21:00 JST, February 19, 2025

The government faces some stiff challenges in achieving its basic medium- to long-term energy policy of doubling the share of renewable energy in the nation’s total energy supply mix.

The government approved a revised Strategic Energy Plan at a Cabinet meeting on Tuesday, marking the first update of the policy in three years.

The policy clearly states that renewable energy and nuclear power — energy sources that do not emit carbon dioxide while operating — will be used “to the maximum extent possible.” Under the updated plan, the government aims to have up to 70% of the country’s electricity come from such sources by fiscal 2040.

However, the limitations of renewable energy expansion make achieving the targets challenging.

At a press conference following the Cabinet meeting, Economy, Trade and Industry Minister Yoji Muto emphasized the urgent need to increase the share of low-carbon energy sources.

“As the world continues to invest heavily in [low-carbon] energy sources and supply chains, Japan must steadily promote green transformation or it will lose its industrial competitiveness,” he said.

Electricity demand is expected to increase as the global spread of artificial intelligence is spurring the construction of more data centers and semiconductor factories. U.S. tech giants and others are demanding low-carbon energy sources throughout their supply chains.

Japan’s share of low-carbon energy sources in the total energy supply mix was 27% in fiscal 2021, the lowest among major countries.

“If we do not decarbonize electricity, we will be unable to attract global companies and there will be an exodus of domestic companies overseas,” a senior official at the Economy, Trade and Industry Ministry said.

Targets for fiscal 2040

The Strategic Energy Plan sets the following targets for Japan’s power source mix in fiscal 2040: increase renewables to 40%-50% and nuclear power to 20% and reduce thermal power generation to 30%-40%, mainly from coal, which emits large amounts of CO2.

The amount of electricity generated from renewable sources has doubled over the past 10 years. Solar power has increased 22-fold, but the share of renewable energy was still only just over 20% in fiscal 2023. To meet the 40%-50% target for renewables, power generation using them will have to more than double, as electricity demand is expected to grow.

Under development

The government has positioned next-generation perovskite solar cells as the game changer for the future expansion of renewable energy.

Perovskite solar cells are lightweight, thin and bendable, allowing them to be installed in many places, including on the walls of buildings.

The government in November set a target to install about 20 gigawatts’ worth of perovskite solar cells by 2040 — enough to power 6 million households.

Production of perovskite solar cells has begun in Japan with the aim of putting them on the market in fiscal 2025. However, it remains to be seen whether these cells will be widely adopted, as the technology is still under development and there are hurdles to overcome such as manufacturing costs and power generation efficiency.

Progress in offshore wind power projects is also slow.

Surrounded by the sea, Japan has plenty of room to expand offshore wind power. The government aims to have 30 to 45 gigawatts of offshore wind capacity by 2040, equivalent to the energy produced by more than 30 nuclear reactors.

However, soaring prices of materials have caused companies to rethink their projects, with Mitsubishi Corp. posting a ¥52.2 billion loss on its offshore wind power generation business and postponing the start of construction in some areas.

“The composition of the total power generation target in the plan is a high hurdle to clear,” said Takaharu Niimi, a senior research fellow at the Japan Research Institute Ltd. “The government needs to review its priorities for renewable energy to achieve the targets through regular monitoring.”

N-plants essential

With the difficulties in expanding the use of renewable energy sources, nuclear power is essential for a stable energy supply and decarbonization.

In the latest Strategic Energy Plan, the phrase “reduce the dependence on nuclear power as much as possible” was not included for the first time since the Great East Japan Earthquake in 2011. As electricity prices are lower in areas where nuclear power plants have been restarted, the plan stipulates that the government will accelerate such restarts, saying, “Nuclear power plants are highly important because they contribute to people’s lives and economic activities.”

Before the earthquake, there were 54 operational nuclear reactors in Japan. In the aftermath of the quake, it was decided that 21 would be decommissioned.

The operators of 26 reactors, including those under construction, have applied for safety reviews by the Nuclear Regulation Authority. However, due to delays in the review process, only 17 reactors have passed safety reviews and 14 have been brought online to date.

The plan sets a target of increasing the proportion of nuclear power in the total energy mix to 20% by fiscal 2040. However, the figure in fiscal 2023 was only 8.5%. In order to achieve the target, all 26 reactors for which safety review applications have been made must be brought online.

Ken Kobayashi, chairman of the Japan Chamber of Commerce and Industry, issued a written statement on the plan: “Promoting the nuclear energy policy is the key [for a stable energy supply.] In addition to the early restart of nuclear power plants whose safety has been confirmed, government-led efforts are needed, such as the construction of new and replacement reactors.”