The reinvention of Japan’s power supply is making little headway
Renewable generation has grown from 10% of the power supply in 2010 to 17% in 2018, almost half of which comes from old hydropower schemes. Most nuclear plants, which provided more than a quarter of the country&#x2019;s power before the disaster, have been shut down. The current government wants nuclear plants to provide at least 20% of electricity by 2030.
IN THE WAKE of the Fukushima nuclear disaster in 2011, enthusiasm for renewable energy in Japan swelled. Kan Naoto, the prime minister at the time, declared that the country would draw up a new energy strategy “from scratch” and “elevate” renewables. One of his government’s last acts before losing power was to pass a law to stimulate renewable energy. Dozens of small firms sprang up. Fukushima prefecture itself pledged to get all its power from renewable sources by 2040.

The hoped-for transformation, however, has been slow. Renewable generation has grown from 10% of the power supply in 2010 to 17% in 2018, almost half of which comes from old hydropower schemes. Most nuclear plants, which provided more than a quarter of the country’s power before the disaster, have been shut down, at least for the time being. But for the most part they have been replaced not by wind turbines and solar panels but by power stations that burn coal and natural gas. The current government wants nuclear plants to provide at least 20% of electricity by 2030. It also wants coal’s share of generation to grow, and has approved plans to build 22 new coal-fired plants over the next five years. The target for renewables, by contrast, is 22-24%, below the current global average, and far lower than in many European countries.

Geography and geology are partly to blame. Japan is densely populated and mountainous. That makes solar and onshore wind farms costlier to build than in places with lots of flat, empty land. The sea floor drops away more steeply off Japan’s coasts than it does in places where offshore wind has boomed, such as the North Sea. And although geothermal power holds promise, the most suitable sites tend to be in national parks or near privately owned hot springs.

Government policies also help stifle the growth of renewable energy. Since the end of the second world war, privately owned, vertically integrated regional utilities have dominated the electricity market. These ten behemoths provide stable power within their regions, but do little to co-ordinate supply and demand across their borders. Power is not transmitted at the same frequency throughout the country: the west runs at 60 hertz and the east at 50. The limited transmission between regions makes it even harder than usual to cope with intermittent generation from wind turbines and solar panels.

Recent reforms have attempted to promote renewables both directly and indirectly. Mr Kan’s government introduced a “feed-in tariff”, obliging utilities to pay a generous fixed price for certain forms of renewable energy—a policy that has prompted investors to pile into solar and wind in other countries. In 2016 the current government fully liberalised the retail electricity market. It has also set up new regulatory bodies to promote transmission between regions and to police energy markets. In April a law came into force that requires utilities to run their generation, transmission and distribution units as separate businesses.

Critics say the steps have been too incremental and not radical enough. Utilities continue to make it time-consuming and costly for new entrants to get access to the grid. Existing power plants are favoured over new facilities, and the share of renewables is limited, on the ground that their intermittency threatens the grid’s stability. This resistance spooks investors. The government’s relatively paltry targets for renewables compound the worries.

But even if the government is timid, investors can still make a difference. Several of Japan’s big multinationals have pledged to switch to clean power on a scale and schedule that put the government’s targets to shame. Environmental activism has made banks and businesses wary of investments in coal. Even big utilities have come to see business opportunities in renewables. Despite the sluggish pace of change, Japan may eventually catch up.

Editor’s note: a longer version of this article was published in the Asia section of the print edition under the headline “No mill will”.