Notably, a recent study has shown that Japan can create 67,000 new jobs by investing in domestic renewable energy projects by 2030. This would be a positive step as countries seek to rebuild their economies in the wake of COVID-19—and potentially catalyze a movement toward investment-led growth.
In the aftermath of the devastating March 2011 East Japan Earthquake and resulting nuclear crisis, the Japanese government was forced to radically overhaul its long-term energy strategy. Following the crisis, Japan made the unavoidable decision to shut down all of its 54 nuclear power plants (which prior to the Fukushima Daiichi meltdowns accounted for more than 30% of its power supply) and drag dozens of thermal plants out of mothballs to compensate. This sudden jump back to a dependence on fossil fuels may have been a big boost for “Big Energy” companies, but it represented a pronounced about-face from where Japan aspired to be in terms of clean energy. Fortunately, it also triggered a grassroots movement strongly in favor of safer, renewable energy technologies and vehemently opposed to any return to a reliance on nuclear power. It has taken nearly a decade for the government to come around, however it looks like 2021 could very well be the year that Japan truly earns its spot at number 12 on the 2019 “Environmental Performance Index,” right behind The Netherlands.
While considered to be “on the greener side of green” when it comes to environmental policies, Japan’s long-term relationship with nuclear power has come with a considerable amount of risk, both from accidents and also considering the environmental impact of storing high-level radioactive waste in a country with very little space for storing anything. Enter the power of wind, which in parts of Europe has become one of the largest sources of clean energy. Wind power features none of the dangerous by-products of nuclear power, no flooding of villages or damming of rivers like needed for hydro, and better overall efficiency than solar. With the passing of the Marine Renewable Energy Utilization Act two years ago, Japan now has 120 offshore wind farm sites that are under development, with four locations in Akita, Aomori, Chiba, and Nagasaki prefectures fast-tracked for local approval and implementation.
At the vanguard of the wind projects are two Danish multinationals: Vestas and Orsted, each at the top of the charts globally in the production of wind turbines and offshore development. Leading the charge in Japan is the nacelle innovator Vestas, whose joint venture with Mitsubishi Heavy Industries (MHI) on the Akita-Noshiro project is currently powering the delivery of a total of 33 Vestas V117 turbines to the project site off of the Japan Sea coast. The expected combined output of 139 MW will be enough to power 130,000 homes, putting the project well ahead of any other offshore wind farm in Japan. Yokohama-machi in neighboring Aomori
The prefecture will soon be the host of a similar project, with nine V117 turbines and three of the less powerful V105 units on the delivery slate. But it is the massive Yurihonjo project (located just south of the Akita-Noshiro site) that is expected to dwarf all of the competition, with the installation of up to 90 turbines generating an output of more than 700 MW. And in the not-so-distant future is the rollout of a powerful new “supersized” turbine by MHI-Vestas. The next-gen turbine is said to be even more powerful than the V164/174, currently, the highest-capacity wind turbine ever made, and its deployment in the field is expected by the middle of this decade.
It will be an uphill battle to make renewable energy in Japan a larger piece of the country’s power puzzle. Under current initiatives, the government expects to be able to source just 1.7% of its electricity from wind farms by 2030, and so any real impact must be linked to an equal or larger investment in hydro and solar and a much deeper look into the potential for harnessing geothermal energy sources in one of the most seismically active regions in the world. But clean energy proponents are hoping that the momentum generated by offshore wind projects will be the wind in Japan’s sails as the country charts a course for a new, non-nuclear energy future.
As the world’s third-largest economy, Japan’s energy needs remain substantial. Nevertheless, the relative undersaturation of the market presents a clear long-term opportunity for private investors seeking to gain exposure not only to the growing capacity of domestic projects, but also to innovations across the cleantech, grid, and storage space. Building this exposure in Japan also enables foreign investors to potentially gain access to benefit from the lucrative links which Japanese corporate, financial, investment, government, and non-governmental bodies have cemented across the Asia-Pacific region.
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Partner Contribution – ReloJapan
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