Aggressive measures Japan is looking to implement to increase renewable energy capacity. The country has proposed to triple its renewable power output by 2030. Recent reports highlight regions such as Fukushima, Saga, Akita, and Hokkaido as examples of successful local engagement in renewable energy initiatives. These communities have shown what’s possible with strong local leadership, proactive zoning, and investments in transmission infrastructure.
The country has much to celebrate, but troubling hurdles lie ahead, as almost three-quarters of all installed power capacity is still dominated by large-scale utilities. Alarmingly, these utilities own practically none—under 0.3%—of the renewable capacity excluding hydroelectric power. This has led them to prioritize fossil fuel and nuclear assets at the expense of renewable energy. Inability to develop a national transmission system. That absence of a strong national framework for developing transmission systems complicates efforts to expand renewable energy.
Regional Success Stories
Fukushima, Akita, Saga, and Hokkaido have done remarkable work advancing their renewable energy initiatives. They did this, in part, by leveraging robust local leadership and working hand-in-glove with lenders. In these prefectures, rapid zoning has been key to jumpstarting new renewable energy projects.
Smart investment in transmission infrastructure has been shown to be a boon for these same regions. We know that local governments and communities are working hard to create the best possible environments for renewable projects. This collaboration has helped draw both domestic and international investors to a sector that previously saw little investment activity.
“Japan should focus on scaling these successful regional approaches instead of relying on fossil fuels for backup.” – Miyamoto
These areas represent what is achievable when local stakeholders are willing to step up. Yet their active participation fuels the growth and advancement of renewable energy production.
Challenges Facing the Energy Sector
Even with the progress made in some areas, the Japanese energy landscape faces larger forces at work undercutting their gains. This year, in 2024 alone, the market has already seen the exit of at least 52 renewable energy project developers. This featured eight bankruptcies, each with liabilities over ¥10 million (around $67,697), raising fears about the continued feasibility of investing in this growing industry.
It is the report’s call for reforms that really steals the show, recommending actions that range from modernizing market design to improving enforcement of existing regulations. Japan’s utilities have largely been unable to come to terms with or fully transition to this new energy environment. This lag is severely impeding the country’s transitory to renewable energy.
“Priorities should include reforming grid access rules, modernising market design, strengthening enforcement of the existing Non-Fossil Certificate obligations for major utilities, and enabling deployment paths such as power purchase agreements.” – source not specified
A Vision for the Future
The recent auctions in Japan have demonstrated the potential for offshore wind projects, establishing a replicable framework for rapid scaling. According to advocates, this can provide the path forward on a practical and achievable way to add more renewable energy capacity on a national level.
“Japan’s recent auctions have proven the viability of offshore wind projects and established a replicable framework for rapid scaling.” – Miyamoto
To attract both domestic and international capital into the renewable sector, Japan must implement clear regulations and foster robust competition. By addressing existing disparities in energy supply and demand between urban and rural areas, Japan can create an environment conducive to sustainable growth.