According to a study conducted by BloombergNEF (BNEF), Japan will need to have a total installed capacity of 689GW for solar and wind power generation by 2050 in order to reach its net zero goal. The study outlines BNEF’s net zero scenario, which details the breakdown of power generation in Japan. It states that solar and wind capacity needs to increase by over eight times from 81GW in 2021 to reach the target. With this increased capacity, solar and wind power will account for 79% of the electricity supply, while nuclear power will provide 11%. The remaining demand will be met by hydro, geothermal, and thermal power plants equipped with carbon capture and storage.
To achieve the net zero goal, it is estimated that Japan will need to invest an annual average of US$239 billion, roughly 3.8% of the expected gross domestic product, in energy supply and demand. This investment would create more domestic economic opportunities while reducing emissions and strengthening energy security.
BNEF also suggests several ways for Japan to accelerate its energy transition. These include reducing the hurdles faced by renewable developers through transparent grid connection processes and streamlined permitting. Local government-led reverse auctions with guaranteed access to land and grid connections could also speed up renewables deployment.
Currently, fossil fuel power generation accounts for over 70% of Japan’s electricity generation. However, instead of retrofitting coal power plants for co-firing with ammonia, BNEF recommends focusing on the accelerated deployment of geothermal, solar, and wind power.
Despite the potential for renewable energy, there are challenges that Japan must overcome. The feed-in premium (FiP) scheme, designed to incentivize renewable energy, has not met the government’s expectations. Grid capacity limitations have also led to curtailment measures in certain regions of Japan. However, with the right investments and strategies in place, Japan can overcome these challenges and work towards its net zero goal.