- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabancı University.
Energy security has been on the top of Japan’s policy agenda since the country transformed from a feudal economy to a high resource-intensive global power. As the U.S. Energy Information Administration’s data demonstrates, in 2016, Japan was the largest LNG importer, the second largest exporter of coal and the third biggest importer of oil in the world. The political landscape changed on a global scale during the 1970’s and seven years ago on March 11, 2011, the Fukushima nuclear disaster forced Japan to reconsider its energy policies. By adopting a multi-layered policy strategy, Japan aims at overhauling its energy supply choices as an emerging energy transition innovator.
At the beginning of the 19th century, the majority of Japan’s primary energy sources were dependent on biomass. At the turn of the century, however, coal replaced biomass and this was later followed by oil. Although coal played a major role in reviving the Japanese economy, the real miracle of economic development took place after increased oil consumption. From 1920 to 1940 alone, Japan’s overall energy consumption increased far above 200 percent. During WWII the U.S. was the major provider of Japan’s oil supply. Following the attack on Pearl Harbor in 1941, the U.S. proclaimed an oil embargo on Japan. This incident was a wake-up coal for Japan to diversify its oil supply sources.
For energy supply security reasons, Japan looked to the Middle East for its oil. In 1948, Japan’s oil consumption was 32,000 barrels per day (bpd), but just two decades later in 1970, overall oil consumption increased at a staggering rate, reaching 4.4 million bpd. Nevertheless, Japan’s new oil suppliers were about to hit the Japanese economy hard.
The share of oil in Japan’s primary energy supply peaked and increased to as much as 75 percent when the oil crisis began in October 1973. Among other advanced economies, Japan was one of the countries hit hardest because it was importing the bulk of its oil from Iran, Kuwait and Saudi Arabia. After the 1973 oil crisis, Japanese policymakers decided to tackle the share of oil in primary energy supplies, 70 percent of which was used for power generation in oil-fired power plants and it was also used in transportation. Consequently coal, natural gas, and nuclear power started to gradually infringe on the share of oil for power generation. The decision that was taken back then resulted in a major cut in overall oil consumption, particularly for oil-fired plants. From the 1970’s to 2014, 75 percent of the country’s oil share in primary energy supply dwindled to as low as 42 percent and was replaced by other alternative energy supply sources.
Economic vulnerability and exogenous depression stemming from the changing geopolitical environment resulted in the mushrooming of nuclear villages. Oil supply challenges and price shocks over the previous years provided the main motivation for Japan’s search for alternative energy supply sources, which paved the way for increased investment in nuclear energy.
In the early 2000’s, increased demand from China, India and other Asian countries together with the geopolitical turmoil in the Middle East saw the unexpected rise of conventional energy prices resulting in a negative outlook in energy markets worldwide. In response, Japan drafted alternative energy strategies to focus on future energy supply security.
Japan’s Nuclear Energy National Plan in 2006 and the Energy Basic Plan in 2010 were two of these strategic plans aimed at increasing the share of renewables and nuclear energy in conjunction with implementing strong energy efficiency measures. These policy papers also targeted reducing over-reliance on fossil fuels between 2010 and 2030. The policy experts estimated that with the Energy National Plan, Japan would spend an equivalent of US$40 trillion during this period with the aim of becoming a leading power in smart grids, energy storage and in renewable energy technology in the coming years.
Japan massively invested in research and development (R&D) of nuclear fission and design for the period between 2010 and 2030. Nuclear development had been a central pillar of the country to the extent that in 1995, Japan’s total nuclear R&D spending, under the umbrella of the International Energy Agency, reached 60 percent of the overall R&D budget. In the wake of the nuclear disaster in 2011, the overall spending in R&D dropped to 50 percent.
After the Fukushima disaster, investment in renewables further increased.
In response to the risks correlated with nuclear energy, public opinion in Japan swayed more towards renewable energy as a way of combating climate change and meeting the country’s electricity needs. The introduction of feed-in-tariffs, from 2012 has resulted in increased capacity, particularly in solar PV. From 2012 to 2015, Japan became the second largest solar PV installer in the world. Electricity generated through solar PV increased from 4 terawatt-hours (TWh) to 36 TWh between 2010 and 2015. The current volume of solar PV auctions taking place in Japan suggests that overall solar PV installment is and will continue to rise.
In 2016, approximately 95 percent of the capacity increase in renewable energy was in solar PV. Japan’s prolonged economic recession for over a decade has started to revive with increased investment in renewable production and installations in various regions in Japan. Once completed, another 1 GW of solar PV will be added to Japan’s renewable energy capacity at the end of 2018. The government also targets installing 10 gigawatts of offshore wind capacity at the latest by 2030.
The government target of meeting the country’s electricity needs with renewable sources by 35 percent in 2030 is highly ambitious especially for a country like Japan with very high levels of energy consumption. However, the currently installed renewable capacity in Japan is insufficient to meet the large bulk of energy needs, but the government’s decisiveness and support for the sector promises a better future for renewable energy.
The resource-intensive industrialization that Japan has faced for over a century brought many risks and challenges. The extreme dependence on fossils fuels and the subsequent crises paved the way for a paradigm shift in energy dependency that changed the overall pattern of energy consumption over the years. Repetitive oil crises, nuclear disasters and the resulting strategic decisions taken to lessen the overall negative effects allowed Japan to reap the benefits of crises by adopting new realities. Despite hardship endured during these crises, Japan’s stoic ability to adapt through resiliency and vast R&D investment has seen the country become a pioneer in initiating energy transition around the world providing many lessons to be learned.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.