Japan - Country Commercial Guide
Renewable Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-07

Overview

Japan has become one of the world’s largest renewable energy markets, with considerable long-term growth potential.  The focus on renewables intensified after the March 2011 earthquake and tsunami that damaged the Fukushima Daiichi nuclear power plant and caused a re-think of Japan’s significant reliance on nuclear power.   Investment inducements, and the decision to shut down most of Japan’s nuclear reactors, have caused renewable energy development to grow steadily.

The Ministry of Economy, Trade and Industry (METI) is responsible for developing and enforcing Japan’s renewable energy laws and regulations, including the Feed-in Tariff system (FIT) that has been in place since July 2012 to encourage renewable energy deployment.  METI re-examines and revises FIT rates annually, applying varying levels, per renewable source. Ultimately, METI seeks to create a market that is FIT-independent and revision of regulations on renewable energy include the prospect of new wheeling charges for power generators, and reforming rules on using the power grid to increase renewable energy installation. In July 2021, METI presented the rough draft of its 6th Strategic Energy Plan. The Plan seeks to meet Japan’s goal of carbon neutrality by 2050 and reducing greenhouse gas emissions by 46% from 2013 level by 2030.  In the draft, the energy mix for 2030 would be 36-38% for renewable energy (up from 22-24 % in the current energy mix), 1% for hydrogen/ammonia (up from zero), 20-22% for nuclear (no change), 20% for LNG (down from 26%), and 2% for oil (down from 3%).  The 36-38% renewable energy share would be: 10% for hydro, 15% for Solar, 6% for wind, 5% for biomass and 1% for geothermal. The 6th Strategic Energy Plan is expected to be finalized and published before the end of 2021.

Market trends

Following is a short summary of current market updates related to renewable sources:

Offshore Wind: The promotion of development and introduction of offshore wind is one of the top priorities in Japan’s renewables.  Japan has substantial coastline and has enormous potential in offshore wind.  Despite having technological capability, Japan has remained behind many other advanced economies in installation of domestic offshore wind power generation.  The Government of Japan (GOJ) has introduced legislation to strengthen the regulatory environment for offshore wind and is committed to work together with the private sector to promote offshore wind power generation in both domestic and international markets.

Hydrogen: Japan aims at realization of a hydrogen society and hydrogen ranks as one of the key factors for decarbonization.  Japan seeks to commercialize hydrogen power generation as well as to establish international hydrogen supply chains and to cut the unit hydrogen power generation cost.  Hydrogen is listed as one of the 14 key sectors of Japan’s Green Growth Strategy, which is an industry-wide policy.  METI has developed a basic strategy for the development of a hydrogen society.

Carbon Recycling: To mitigate climate change, Japan is keen to promote carbon capture, storage and utilization technologies.  In 2109, METI established a Carbon Recycling Advancement Office, part of the Agency for Natural Resources and Energy (ANRE).  

Battery/storage: As a 10-year plan ends that required utilities to purchase surplus electricity from residential solar system owners, these half a million households may consider finding new ways to benefit from their existing soar system by adding battery storage.

FIP system: In addition to FIT, Japan introduces a Feed-in-Premium (FIP) system from April 2022.  For the first year, large solar, geothermal, hydro, and biomass projects will be transferred from FIT to FIP. 

Solar power:  FIT rates for solar projects have been decreasing year-by-year.  METI estimates solar power will become cheaper than nuclear in 2030, but they also mention that some additional costs such as battery or balancing system need to be considered for solar power.  From FY2022, a new rule on “Mandatory Decommissioning Cost Reserve” will be introduced for solar projects.

Biomass fuel (imported biomass wood): Japan plans to build several large-scale biomass power plants but relies heavily on imported biomass fuels.  GOJ agencies are currently assessing food-feed-fuel competition and lifecycle greenhouse gas (GHG) emissions.  New rules based on this lifecycle analysis are still pending and will affect the market.

Geothermal: Japan has the world third largest potential in geothermal after the United States and Indonesia, but the geothermal development is very limited, because of legal and social barriers.  GOJ considers reviewing the current legal system, such as the National Park Act, Forest Act and Hot Spring Law to promote geothermal development. 

Aggregation and balancing: To maximize the installation of renewable energy, industry has shown great interest in market proven aggregation, balancing and remote-control systems and grid-level energy storage. 

Coal phase-out: Japan has traditionally relied heavily on coal-fired power generation, even more so as nuclear power generation came offline after 2011.  But METI announced a roadmap to ultimately phase out coal-fired generation, to reduce carbon emissions and shift toward using more renewable energy.

Opportunities

The 10th Revival of Fukushima Renewable Energy Industrial Fair 2021 (REIF Fukushima 2021)
Date: February 2-3, 2022 (postponed from the original date of October 2021 due to COVID-19)
Venue: Big Palette Fukushima, Fukushima
Organizer: Fukushima Prefectural Government and Fukushima Center for Industrial Promotion
Description: REIF is a renewable energy industrial fair organized by Fukushima Prefectural Government annually.  Fields of exhibition are solar, hydro, geothermal, hydrogen, fuel cells, storage batteries, biomass, smart community, EMS, energy saving and other.

SDGs Week EXPO
 - EcoPro2021
 - SDGs Week Expo for Business 2021 (Japanese)
 - SDGs Week Expo Online (Japanese)
Date: December 8-10, 2021 (November 25-December 17, 2021 for the online)
Venue: Tokyo Big Sight
Organizer: Sustainable Management Promotion Organization (SuMPO) and Nikkei Inc.
Description: SDGs week Expo and EcoPro are for all stakeholders to solve environmental and social issues. Energy saving technologies, natural and renewable energy, hydrogen technology, and smart grid are major foci. 

The Renewable Energy 2022 Exhibition
Venue: Tokyo Big Sight, Tokyo
Organizer: Japan Council for Renewable Energy (JCRE)
Description: The event aims at enhancing renewable energy usage and targets all fields of renewable energy.  Exhibitors promote latest products, technologies and services at the event.    

Japan Utility Week —Decarbonized society accelerated by energy mix—
 - ENEX 2022 (Energy and Environment Exhibition)
 - DER Microgrid Japan 2022 (Distributed Energy Resources Microgrid Japan)
Venue: Tokyo Big Sight, Tokyo
Organizer: Energy Conservation Center Japan (ENEX) and JTB Communication Design (DER)
Description: In 2022, EXEX and DER Microgrid Japan will be held concurrently with The Renewable Energy 2022 Exhibition.  ENEX and DER Microgrid Japan mainly focuses on business of energy saving/conservation and energy usage management.  

World Smart Energy Week 2022 (WSEW Tokyo Spring)
 - FC Expo (Int’l Hydrogen & Fuel Cell Expo)
 - PV EXPO (Int’l Photovoltaic Power Generation Expo)
 - BATTERY JAPAN (Int’l Rechargeable Battery Expo)
 - INT’L SMART GRID EXPO
 - WIND EXPO (Int’l Wind Energy Expo)
 - INT’L BIOMASS EXPO
 - ZET (Zero Emission Thermal Power Generation Expo)  
 - RESOURCE CIRCULATION EXPO (Anti-Ocean Plastic, Waste Treatment, Recycling Technology)
 - DECARBONIZATION EXPO

Date: March 16-18, 2022
Venue: Tokyo Big Sight, Tokyo
Organizer: Reed Exhibitions Japan
Description: WSEW launched in 2005 and has been one of the largest renewable energy trade shows in the world.  WSEW are planned to be held three times in 2022, March 16-18 at Tokyo Big Sight (Tokyo), August 31-September 2 at Makuhari Messe (Chiba) and November 16-18 at INTEX Osaka (Osaka), and the WSEW Tokyo Spring is the largest and most substantial one. 

The 31st New Environment Exposition 2022 (N-EXPO 2022)
The 14th Global Worming Prevention Exhibition 2022 (GWPE 2022)
Date: March 25-27, 2022
Venue: Tokyo Big Sight, Tokyo
Organizer: Nippo Business Co., Ltd.
Description: Together with N-EXPO and GWPE is the largest environmental exhibition in Asia.  N-EXPO is focused on deployment and expansion of environmental business and GWPE is on promotion of business for CO2 reduction, new and renewable energy utilization and energy efficiency and conservation. 

Resources

CS Japan Contact

Ms. Minae Suzuki
Commercial Assistant
Minae.Suzuki@trade.gov