Cornwall Insight: Japan not on track to meet decarbonisation targets
Published by Poppy Clements,
Assistant Editor
Hydrocarbon Engineering,
The Japanese government have ambitious targets of 18 GW of onshore wind, 10 GW of offshore wind and 108 GW of solar PV by the end of the decade. However, Cornwall Insight’s Japanese Benchmark Power Curve Report, in partnership with Shulman Advisory, highlights major challenges in Japan’s decarbonisation journey, including mixed results from auctions, grid infrastructure issues and local opposition to developments, alongside other barriers.
Cornwall Insight’s analysis is based on the Organisation for Cross-regional Coordination of Transmission Operators (OCCTO) 2023 “Aggregation of Electricity Supply Plans”. The report evaluates installed capacity and projections for 2028 and 2033, using data submitted by developers and the regional transmission system operators. Adjusting the scenario for 2030, Cornwall Insight’s report shows Japan’s renewable capacity is set to fall short, underscoring the need for accelerated action to overcome hurdles in renewable deployment.
While METI and OCCTO differ regarding the share of low carbon generation in the capacity mix by 2030, technologies such as wind (particularly offshore wind), solar, hydrogen, and battery storage are forecast to see growth in both scenarios.
There are various mechanisms that the country has put in place to increase low carbon capacity, including: the Feed-in Premium (FiP); the Green Transformation (GX) Promotion Act; GX Economic Transition Bonds; wind power auctions; the single year capacity market; and most recently the Long-Term Decarbonisation Auction (LTDA), with an aim to gradually increase the proportion of renewable assets on the system.
The results of the inaugural LTDA saw out of the 9.8 GW awarded, 5.7 GW was LNG supply and 4 GW was non-LNG 'clean power sources' supply contracted for 2027 - 47. While LTDA did exceed expectations with Battery Energy Storage Systems, no bids for wind or solar were submitted as developers increasingly favour private bilateral agreements over the LTDA’s revenue-sharing structure.
Japan has implemented several changes for the next LTDA auction to promote the construction and replacement of decarbonised power sources and accelerate nuclear rollout. However, no significant changes are expected to help incentivise more renewable technology assets such as wind and solar, therefore the next LTDA auction is likely to see a similar basket of results.
Other barriers to the renewable’s rollout include challenges on the grid, with grid infrastructure gaps, including insufficient connectivity. As well as coordination challenges with Japan’s unique dual-frequency grid system (50 Hz in the east and 60 Hz in the west) adding complexity to integrating nationwide renewable capacity.
On top of these concerns, significant obstacles, including limited land availability, and local opposition to renewable projects, are also thwarting Japan’s low carbon success.
The government is expected to agree on the Seventh Strategic Energy Plan in 2025. This revision should take into consideration expected demand growth in Japan as well as refocusing on security of supply and the role of carbon capture and storage in meeting 2050 ambitions. It’s also hoped that the plan will provide more clarity on how Japan plans to meet its ambitious renewables targets in the coming years.
Sarah Nolan, Senior Modeller at Cornwall Insight, said: "Japan's ambitious renewable energy targets face significant structural challenges. While measures like the Long-Term Decarbonisation Auction (LTDA) show promise, more targeted reforms are essential to accelerate wind and solar deployment. If the challenges surrounding the LTDA can be overcome, then the auction could open pathways to investment and opportunities for foreign investors to collaborate and provide a means of working towards Japan’s decarbonisation. However, without decisive action, Japan risks falling far short of its 2030 aspirations.",?p>
Read the article online at: https://www.hydrocarbonengineering.com/the-environment/30122024/cornwall-insight-japan-not-on-track-to-meet-decarbonisation-targets/
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