Japan sets out ambitious energy investment plans in move towards sustainability

Karah Howard, energy and infrastructure expert at Pinsent Masons was commenting following publication of the plan (85 pages/1.6 MB), which sets out Japan’s ambitious energy investment goals for 2040 and beyond.

Howard said: “Japan’s 7^th Strategic Energy Plan places weight on the transition to renewable energy to achieve carbon neutrality by 2050 – particularly on offshore wind energy, ammonia and hydrogen – whilst acknowledging the vital role that nuclear and natural gas will play during the period of transition.”

Japan aims to significantly increase its renewable energy capacity, focusing on wind and solar power. The government plans to expand offshore wind power generation to 45 gigawatts (GW) by 2040, a substantial increase from the current 4.6 GW. This expansion is expected to position Japan as a global leader in offshore wind energy. Solar power is also a critical component of Japan’s renewable energy strategy. The government is targeting an increase in solar power capacity to 150 GW by 2040, up from the existing 74 GW. To support the integration of these renewable sources, Japan is investing heavily in battery storage systems. The government aims to deploy 30 GW of battery storage by 2040, enhancing grid stability and ensuring a reliable supply of renewable energy.

In addition to wind and solar, Japan is focusing on innovative technologies such as carbon capture and storage (CCS), hydrogen, and ammonia. The government plans to capture and store 120 tonnes of CO2 annually by 2040, leveraging CCS technology to mitigate emissions from industrial processes and power generation.

Hydrogen is set to play a pivotal role in Japan’s energy transition, with the government setting out to establish a hydrogen supply chain capable of delivering 20 million tonnes of hydrogen annually across the next 15 years. This includes the development of hydrogen production facilities, storage infrastructure, and distribution networks.

Ammonia is another important element of the strategy and will be used as a carbon-free fuel for power generation and industrial applications. The annual target is set at 10 million tonnes.

While Japan is committed to reducing its reliance on fossil fuels, the government plan also recognises the need for a ‘balance approach’ during the transition period in the coming years. Natural gas, particularly liquified natural gas (LNG), will continue to play a crucial role in Japan’s energy mix. However, Japan is also focusing on reducing the carbon intensity of fossil fuel consumption. The government aims to phase out coal-fired power plants and promote the use of cleaner natural gas technologies. By 2040, Japan plans to reduce its coal consumption by 50% from current levels.

While nuclear power remains a contentious issue in Japan, the government acknowledges the role of the power source in achieving carbon neutrality. The plan includes the same operation of existing nuclear reactors and the development of the next generation nuclear technologies. By 2040, nuclear power is expected to contribute around 10% of Japan’s energy mix.

The new plan aims to increase Japan’s overall renewable energy sources to 50%, up from the 20% statistics in 2024. Fossil fuels, which currently make up about 70% of Japan’s energy mix, is expected to be reduced to 40% by 2040.

Howard said: “The plan is ambitious and will require significant government and industry support to establish infrastructure and supply chains necessary to ensure these developing renewable technologies are economically sustainable.”