Japan: clean energy growth offers choice and hope March 2014 _____________________________________________________________________ For the past six months, up to March 2014, Japan has met its energy needs without reliance on nuclear power, which until the Fukushima disaster was a significant provider of the country’s power needs. Energy savings and a rapid expansion of clean, renewable energy are the way of the future. Major corporations, municipalities and communities have begun to move in this direction, but the Abe administration risks squandering the opportunity and returning Japan to the Dark Ages of nuclear risk.
Short-term switch to efficiency and fossil fuels The catastrophic nuclear accident at Fukushima Daiichi not only crippled four of the reactors at the site but also vividly and tragically illustrated the vulnerabilities of Japan’s nuclear power dependency. Heightened awareness of nuclear risks and the problems associated with the nation’s reactors led to the continued shut down of all other nuclear reactors in Japan. For most of 2012 and 2013, only two of Japan’s reactors were operating – a stark contrast to its pre-disaster nuclear fleet of 54 reactors. In September 2013, the remaining two reactors were again taken offline for their second extended maintenance outage since the disaster.1 By March 16, 2014, Japan had been functioning for six months without any nuclear plants supplying power to the grid. During the past six months no blackouts or brownouts have occurred, and Japan’s communities have been free of the nuclear reactor risks. The lights are still on, refrigerators are still humming, and iPhones are being still charged.2 The energy “deficit” resulting from the abrupt shutdown of 30% of Japan’s electricity supply has been filled by a combination of energy savings – energy efficiency and conservation – and increased generation based mostly on natural gas, along with some oil and coal.3 Yet the country’s increase in CO2 emissions has been surprisingly moderate and notably smaller than might be expected from the sudden loss of the world’s third largest nuclear reactor fleet. As the following chart4 indicates, CO2 emissions from Japan’s energy sector – both pre- and post-Fukushima disaster – have maintained a similar growth trajectory. Between 2009 and 2010 the annual increase was approximately 7%, while the period 2010 to 2012 saw less than an 8% rise in CO2 emissions. In short, the post-Fukushima CO2 figures do not represent anything close to a sudden, drastic increase in emissions. Figure 1: Energy sector’s CO2 emissions in Japan, in Mt in a given year.
Source: Data from Energy Indicators of Japan, The Institute of Energy Economics Japan (IEEJ), 2014
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A rapid growth in renewable energy: the beginning While Japan’s long-term energy future remains uncertain it is clear that, over the next couple of years, its nuclear capacity will remain substantially limited. Only a few, if any, of its reactors will restart during 2014 and 2015.vi At the same time, Japan is under increasing pressure to limit its CO2 emissions, to cut its record trade deficit resulting from costly imports of fuels, and to build in stronger energy resilience and energy independence.vii All of these goals can be met by implementing appropriate policies to support energy efficiency programmes and expand the supply of truly clean, sustainable renewable energy. Following the Fukushima disaster, the Japanese government took an important step toward improving energy security and reducing CO2 emissions by adopting new energy legislationviii for so-called “feed in tariffs“ (FIT) that provide a basis of certainty for renewable energy investment. Since the new FIT law entered into force on July 1, 2012, Japan has witnessed an impressive uptake of solar photovoltaic power (PV), as is illustrated in the following chart. A total of 6,800 MW of new solar power capacity has been added to the grid.ix More significantly, a further 20,000 MW of approved projects (as of November 2013)x are in the pipeline. By strengthening the FIT law – for example, by ensuring compulsory grid connection and priority dispatch of renewable energy – Japan could achieve an even greater expansion of solar power.
Figure 2: Installed capacity in MW of photovoltaic (PV) installations in Japan operating under the new FIT regime. Small PV is defined as an installation having under 10kW of peak capacity.
Reference: Data from Ministry of Economy, Trade and Industry (METI): Agency for Natural Resources and Energy 2013
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The Japanese government also announced a broader package of energy sector reforms, including market liberalisation and the dissolution of existing utility monopolies. Despite such progressive policies, the new Japanese government under Shinzo Abe is taking a drastic backward step into the energy Dark Ages by rolling back the policy of phasing out nuclear power. The government has announced its ambition to reinstall nuclear in the nation’s energy mix.xii
This marked change in direction by the Abe government, and its lack of leadership in supporting and spearheading a clean and safe energy future, undermines the opportunity for Japan to meet its climate commitments and improve its energy security. Fortunately, other important players in Japanese society are stepping into the leadership vacuum to take the country forward into a renewable energy future. Between mid-2012 and early 2014, major investors such as the telecommunication company Softbankxiii, Goldman Sachs Groupxiv, Equis Fund Groupxv, Mitsui, Kyocera, Toshiba, Marubenixvi, and Suzuki Motor Corporationxvii have announced moves into the renewable energy business. Forward-thinking investors and companies such as these have created a strong basis for supporting the continued growth of renewable energy in Japan during 2014 and 2015.
Power to the people Aside from big-name investors, Japanese citizens are also coming forward to demonstrate their desire for clean, safe energy in their communities, illustrated by the rapidly growing number of small PV projects under 10kWp capacity. These primarily household-type solar installations, and numerous small-scale projects, have the potential to dramatically alter the energy landscape in favour of renewable energy. As the following chart shows, more than 400,000 small-scale projects were installed in the 16 months since the FIT law entered into force, equivalent to around 25,000 families installing solar PV each month. Figure 3: Number of individual installations of photovoltaic (PV) systems in Japan operating under the new FIT regime.
Source: Data from Ministry of Economy, Trade and Industry (METI): Agency for Natural Resources and Energy 2013
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Economic incentives and a strong determination to get rid of dangerous nuclear power are encouraging families to install their own renewable energy systems. A recent survey revealed that 80% of Japanese citizens are in favour of a permanent shutdown of some or all of the nation’s nuclear reactors.xix The opportunity to bring about a revolutionary change in Japan’s electricity system and shift the country away from the monopolistic control of centralised nuclear and fossil-fired utility giants is also being embraced by municipalities and prefectures. A number of them have announced their own progressive energy visions and plans, which are gaining support from citizens, progressive energy companies and large forward-thinking investors. Fukushima Prefecture, which was devastated by the 2011 earthquake, tsunami and nuclear disaster, has decided to turn tragedy into an opportunity to rebuild itself in a way that tackles climate change and provides safe, nuclearfree energy for its residents. It has pledged to switch to 100% renewable energy by 2040.xx The Sustainable Zone Research Group, a joint project of the Institute for Sustainable Energy Policies and the Kurasaka laboratory of Chiba University, published encouraging results in 2010.xxi For each municipality in Japan they calculated the amount of locally produced renewable energy (both electricity and heat) and compared this to the energy consumed by households and local services (excluding industrial facilities). They concluded that even before the disaster, the FIT law, and increased energy conservation and the rapid expansion of renewable energies, many communities from the northern tip of Hokkaido to the southern part of Kyushu were capable of significantly or entirely meeting their own energy needs from local resources. This highlights the enormous potential for Japanese society to achieve a rapid transition to resilient, self-sufficient renewable energy.
Figure 4: Municipal map of Japanese energy self-sufficiency. In the regions of about 50 municipalities, 100% or more renewable energy is supplied by comparison with their municipal energy demand (both power and heat, excluding industrial energy).
Source: Reproduced from Renewables 2013 Japan Status Report, Institute for Sustainable Energy Policies (ISEP), 2013
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The combination of public urgency to get rid of risky nuclear reactors, incentives created by the FIT law, and forthcoming opportunities for electricity market liberalisation and eroding current utility monopolies, means increasing numbers of Japanese citizens and municipalities will opt for increased energy self-sufficiency. Increased investment in renewable energy will also yield public health and economic benefits.
Community-driven renewable energy projects in Japan: Examples 1. Hokkaido Green Fundxxiii Launched in 1999 as Japan’s first renewable energy citizens’ fund, Hokkaido Green Fund (HGF) is a non-profit organisation that installs and operates community windmills. Having brought its first wind turbine online in 2001, the organisation now operates 16 wind farms throughout Japan.xxiv HGF community wind projects have a combined capacity of 26 MW and generate approximately 61 GWh of electricity a year – enough to power more than 16,000 households. Approximately 4,000 citizens co-invested ¥2.4bn to establish and run the fund, the majority being private individuals whose names are displayed on the turbines in commemoration of their commitment to clean energy. Some invested in the fund as a tangible commitment to a liveable and healthy environment for future generations. The fund has gained increased public interest and attention since the Fukushima nuclear disaster. 2. Co-operative Unions A variety of co-operative unions support a nuclear phase-out, and are working to increase the uptake of clean energy. One example is the Palsystem Consumers’ Co-operative Union,xxv comprised of 1.4 million member households, located in Tokyo and nine neighbouring prefectures. Following the Fukushima nuclear accident, the Union set out its “Palsystem Energy Policy” 2012. Its progressive policy hinges on the key tenets of ensuring a clean energy future through reduced energy usage, the shut down of nuclear plants, and the transition to renewable energies. It also promotes this policy stance to national government and municipalities. Palsystem Tokyo, with 420,000 union members, established a renewable energy electricity supplier to create employment and bolster the regional economy. Since April 2013, Palsystem Tokyo has switched 70% of the electricity consumed by its members to renewable energy, with the aim of achieving 100% renewable energy reliance. 3. Network of Business Leaders and Entrepreneurs for a Sustainable Business and Energy Future (Sustainable Energy Entrepreneurs Network)xxvi Entrepreneurs from small and medium-sized enterprises across the nation established the Sustainable Energy Entrepreneurs Network in March 2012. It functions as an information clearinghouse for forward-thinking small businesses contemplating how to move the nation’s energy system toward clean, safe renewables. Business leaders established the network following the Fukushima disaster as a way to distance themselves from the pro-nuclear, large-scale economic bodies that constitute the “financial community”. More than 30 people, including heads of municipalities, energy experts and corporate leaders, have joined the organisation as advisors. There are currently around 300 members throughout Japan – primarily managers of small and medium-sized enterprises - who support a “locally produced, local consumed” approach based on energy conservation and renewable energy. Along with 24 local corporations, the Sustainable Energy Entrepreneurs Network is a collaborative partner in a small solar project in Odawara.xxvii Local businesses joined together to establish a renewable energy-based power company and began accepting citizen investments in January 2014. Their goal is to raise ¥100m in order to commercialise a 1 MW solar energy power facility. 4. Aizu Electricxxviii Four months after the nuclear disaster, on July 20, 2011, the residents of Aizu region, in Fukushima Prefecture, convened in a local, long-standing sake brewery. While the region remained largely intact following the earthquake and radiation exposure in the prefecture, many residents were keen to avoid further risks from the nuclear legacy. A fierce debate about the way forward for the Aizu region led to citizens establishing the electric power company Aizu Electric in August 2013. Yauemon Sato, the proprietor of a sake brewery with a 200-year history, was appointed as the community power company’s director. In the first stage of the project, between 2014 and 2015, citizens are pooling investments and plan to open 11 solar power generation facilities throughout the Aizu region. The planned capacity of 2 MW will meet the electricity demand of 600 households. In parallel, the establishment of educational facilities for learning about power generation systems has the objective of also utilising small hydroelectric and woody biomass, which will create employment in the area. Regarding the impetus for establishing Aizu Electric: “We founded Aizu Electric based on the principle that we should build up a system conducive to meeting the electricity demands within Fukushima Prefecture through sustainable energy only, and to ensure that our reckless use of nuclear power is not made the responsibility of future generations; in founding Aizu Electric we take responsibility for having, ourselves, overlooked the perils of nuclear power.”
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International Atomic Energy Agency (IAEA) (2014). Power Reactor Information Ssystem (PRIS). Japan. 19 March 2014. http://www.iaea.org/pris/CountryStatistics/CountryDetails.aspx?current=JP See on closure e.g. BBC News Asia. Japan halts last nuclear reactor at Ohi. 15 September 2013. http://www.bbc.com/news/world-asia-24099022; U.S. Energy Information Administration (EIA). Japan. 20 October 2013. http://www.eia.gov/countries/cab.cfm?fips=JA ii The Economist (2014). Start ’em up. 8 March 2014. http://www.economist.com/news/asia/21598714-government-and-voters-are-putting-economics-atoms-opening-way-japan-restart iii The Institute of Energy Economics Japan (IEEJ) (2013). Economic and Energy Outlook of Japan for FY2014. 20 December 2013. http://eneken.ieej.or.jp/data/5363.pdf iv The Institute of Energy Economics Japan (IEEJ). 2013. Energy Indicators of Japan. http://eneken.ieej.or.jp/en/jeb/indicators.pdf v Ibid. vi Reuters. RPT-Fitch: Japan nuclear restart may revive uranium at LNG's expense. 27 February 2014. http://www.reuters.com/article/2014/02/27/fitch-japan-nuclear-restart-may-revive-u-idUSFit69153920140227 vii Ujikane K (2013). Japan Trade Deficit Widens as Fossil Fuel Imports Surge:Economy. Bloomberg News. 20 November 2013. http://www.bloomberg.com/news/2013-11-20/japan-trade-gap-widens-more-than-forecast-as-fuel-imports-surge.html viii Leone S (2011). Japan Approves National Feed-in Tariff. Renewable Energy World.Com. 26 August 2011. http://www.renewableenergyworld.com/rea/news/article/2011/08/japan-approves-national-feed-in-tariff] ix Watanabe C (2012). Japan Solar-Device Shipments to Exceed 2.5 Gigawatts in Year. Bloomberg News. 17 May 2012. http://www.bloomberg.com/news/2012-05-17/japan-s-solar-shipments-to-exceed-2-5-gw-in-year-ending-march.html x Osborne M (2014). BNEF swaps Japan for China as biggest solar market in 2013. PV Tech. 24 January 2014. http://www.pvtech.org/news/bnef_swaps_japan_for_china_as_biggest_solar_market_in_2013 xi Accessed in February 2014 (monthly data are from the XLS sheets downloaded from the middle this webpage http://www.enecho.meti.go.jp/saiene/kaitori/index.html) xii Iwata M (2014). Japan sees key role for nuclear power. The Wall Street Journal. 25 February 2014. http://online.wsj.com/news/articles/SB10001424052702304610404579403741256563088 xiii Thompson J (2014). Japan’s SoftBank technology group considers push into energy market. The Financial Times. 31 January 2014. http://www.ft.com/intl/cms/s/0/facb8246-8a5b-11e3-9c29-00144feab7de.html#axzz2wVfhOX7d xiv Torres I (2013). Goldman Sachs to invest $487 million in Japan’s reneable energy market. The Japan Daily Press . 23 May 2013 http://japandailypress.com/goldman-sachs-to-invest-487-million-in-japans-renewable-energy-market-2329333/ xv Fujita J (2014). Equis Fund to invest $500 mln in Japanese solar projects. Reuters. 13 February 2014. http://uk.reuters.com/article/2014/02/13/equis-japan-solar-idUKL3N0LH3GB20140213 xvi Reuters (2012). Factbox - New investment in renewable energy projects in Japan. 12 September 2012. http://www.reuters.com/article/2012/09/12/japan-energy-renewables-idAFL4E8K43W220120912 xvii Watanabe C (2013). Suzuki to invest $56 Million for Solar Station in Central Japan. Bloomberg News. 18 November 2013. http://www.bloomberg.com/news/2013-11-18/suzuki-to-invest-56-million-for-solar-station-in-central-japan.html xviii Accessed in February 2014 (monthly data are from the XLS sheets downloaded from the middle this webpage http://www.enecho.meti.go.jp/saiene/kaitori/index.html) xix The Japan Daily Press 10 March 2014. Survey says 80% of Japanese don’t want nuclear plants anymore. See: http://japandailypress.com/survey-says-80-of-japanese-dont-want-nuclear-plants-anymore-1045537/ xx See pg 34: http://wwwcms.pref.fukushima.jp/download/1/re_zenpen.pdf xxi http://sustainable-zone.org/wordpress/wp-content/uploads/sustainable-zone-report-2013report.pdf xxii Institute for Sustainable Energy Policies (ISEP) (2013). Renewables 2013 Japan Status Report. See: http://www.isep.or.jp/jsr2013 for the Executive Summary in English. http://www.isep.or.jp/en/wp-content/uploads/2013/05/JSR2013_Summary_Final_Eng0530.pdf xxiii Hokkaido Green Fund. http://www.h-greenfund.jp/citizn/citizn.html xxiv http://www.h-greenfund.jp/whatis/whatis_hgfayumi.html xxv Palsystem Consumers’ Cooperative Union. http://www.pal.or.jp/energy/policy.html xxvi Network of Business Leaders and Entrepreneurs for a Sustainable Business and Energy Future. https://enekei.jp/ xxvii http://www.houtoku-energy.com xxviii Aizu Electric. http://www.aipower.co.jp/
