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Japan set for 60% non-fossil fuel power supply in 2030 in GHG slash drive

Highlights

FY 2030-31 supply-demand outlook a path for ambitious 46% GHG cut

Introducing 1% hydrogen/ammonia in FY 2030-31 energy mix

Raising 2030 oil, gas equity ratio target to 50% from 40%

Japan expects non-fossil fuel power supply sources to account for roughly 60% of the country's energy mix in fiscal 2030-31 (April-March) under a draft Strategic Energy Plan released July 21 -- more than double the 24% share in FY 2019-20 -- as the country aims to match its 46% greenhouse gas emissions or GHG reduction target by the end of this decade.

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Japan's LNG share in the energy mix is set to be around 20%, coal 19% and oil 2% in FY 2030-31 under an outlook in the Strategic Energy Plan, compared with 37% for LNG, 32% coal and 7% oil in FY 2019-20, according to the draft.

Japan's energy mix

The draft of the Strategic Energy Plan, the country's principle energy policy, showed a significant shift in Japan's energy policy focused on decarbonizing the energy sector, which accounts for 80% of the country's GHG emissions, in its efforts toward 2050 carbon neutrality.

The latest Strategic Energy Plan outlines Japan's intention to take a series of supply and demand policy measures, as well as supporting technological innovation, to accelerate its move to curb GHG emissions, while keeping its tight grip to ensure stable energy supply during the transition period.

The FY 2030-31 outlook for renewable energy supply is being described as one path to achieve Japan's ambitious 46% GHG reduction target with careful policy handling at a time when the country is already aware of the difficulty in securing suitable locations for renewables.

Despite uncertainty over the actual outcome for the FY 2030-31 energy mix, the latest outlook would inevitably lead Japanese companies to review their fossil fuels strategy because of the country's clear direction toward decarbonization.

The draft, which was presented during the Ministry of Economy, Trade and Industry's strategic policy committee at its advisory committee for natural resources and energy, remains subject to scrutiny, including a month-long public comment process, before being approved by the cabinet.

The new Strategic Energy Plan is being targeted to be formulated before Japan submits its Nationally Determined Contributions (NDCs) ahead of the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow over Oct. 31-Nov. 12.

Energy mix

Under the draft, Japan expects renewable energy to account for 36%-38% of the country's energy mix for power generation in FY 2030-31 -- with the 1% introduction of hydrogen/ammonia and 20%-22% of nuclear power -- totaling 57%-61% of the non-fossil fuel power supply.

The country also expects the LNG portion to be around 20% in its 2030-31 energy mix, with coal accounting for 19% and oil for 2%, which gives a total of 41% for fossil fuels.

Together with 62 million kl (390 million barrels) of oil equivalent of energy conservation against its business-as-usual scenario, Japan aims to achieve its 46% cut in GHG by FY 2030-31 from the FY 2013-14 level.

"This is based on the new FY 2030-31 reduction target, which represents an outlook of the energy supply and demand," Mitsuhiro Nishida, METI's director of energy strategy office, told a press briefing.

"This is a result of ambitious assumptions to resolve various issues in the supply and demand sides from exhaustively pursuing energy conservation and expanding non-fossil fuel energy," Nishida said. "In short, this is an ambitious outlook on what needs to be done to fulfill the 46% reduction target."

The latest energy mix outlook is based on the country's estimated total power generation mix of about 930-940 billion kWh in FY 2030-31, which is down from around 1,024 billion kWh in FY 2019-20, as a result of significant advancements in energy conservation.

The current FY 2030-31 energy mix, which was formulated in 2015, expects Japan's renewables to account for 22-24%, with nuclear at 22-20%, LNG 27%, coal 26% and oil 3% of the total power generation mix of 1,065 billion kWh.

Energy supply

With the 62 million kl of oil equivalent of energy conservation, Japan's total primary energy supply will also be reduced to some 430 million kl in FY 2030-31, when renewables account for about 20%, with nuclear at around 10%, natural gas 20%, coal 20%, oil 30% and hydrogen approximately 1%.

This marks a drop from a total of nearly 489 million kl of the country's primary energy supply in FY 2030-31 in the 2015 plan, under which renewables account for 13%-14%, nuclear 11%-10%, natural gas 18%, coal 25% and oil nearly 33%.

Once achieving the ambitious energy supply outlook for FY 2030-31, Japan's primary energy self-sufficiency will be improved to about 30%, up from 25% for the same FY year in the current energy mix.

Japan places hydrogen as a new resource and speeds up its deployment under the new Strategic Energy Plan from a series of measures both on the supply and demand sides, and considers enhancing state-owned Japan Oil, Gas and Metals National Corp.'s capability to provide technological and financial support for hydrogen, ammonia and carbon capture and storage (CCS) projects.

As part of considering policy measures for the ambitious energy supply and outlook, Japan is taking account the strength and timing of measures to avoid disrupting the country's stable energy supply by imposing restrictions on curbing fossil fuels-fired power sources prior to the introduction of sufficient non-fossil fuel power sources.

Japan also now aims to raise its 2030 target for equity liftings in its total oil and gas imports to over 50% from the current 40% target, and set a new target of more than 60% by 2040, to ensure its stable supply. The equity lifting ratio stood at 34.7% in FY 2019-20.