Japan Aims for 40-50% Renewable Energy by 2040, Doubles Down on Nuclear Power
Sign up for Global Macro Playbook: Stay ahead of the curve on global macro trends.
Japan is significantly increasing its ambitions for renewable energy, aiming for a 40% to 50% share of its electricity mix by fiscal year 2040, according to a draft revision of its basic energy policy, reports Reuters. This ambitious clean energy push comes as the country also seeks to enhance its energy security amidst global geopolitical uncertainty.
The draft policy, unveiled on Tuesday, also confirms a 20% target for nuclear power in the 2040 mix, reaffirming the technology's role despite the challenges following the 2011 Fukushima disaster. This target is consistent with the current 2030 goal of 20% to 22% for nuclear power.
"It is necessary to utilise LNG-fired power as a realistic means of transition, and the government and the private sector must jointly secure the necessary long-term LNG contracts in preparation for risks such as price hikes and supply disruptions," the draft policy states.
Thermal power, particularly from less efficient coal-fired plants, is projected to decline to 30% to 40% by 2040, down from 68.6% in 2023. The policy does not specify the future breakdown of coal, gas, and oil within the thermal power sector.
The revised energy plan significantly increases the 2030 renewable energy target of 36% to 38%, demonstrating Japan's commitment to clean energy. The 2040 nuclear power target is also maintained despite the challenges faced by the industry post-Fukushima, with the draft policy outlining plans to construct innovative next-generation reactors at existing sites.
The new energy policy emphasizes energy security in addition to decarbonization, reflecting the heightened geopolitical risks of recent years. The 2040 forecasts assume an increase in electricity demand of 12% to 22% from 2023 levels.
While the current energy plan to 2030 includes targets for new fuels like hydrogen and ammonia, the updated plan omits specific targets for these technologies.
The finalized version of the energy plan is expected to be submitted to the United Nations in February.