A few weeks ago, I had the good fortune of being invited to Japan to speak at the Renewable Energy Institute conference on business decarbonisation and the role of collaboration to achieve change. I spoke about the role that the Materials and Embodied Carbon Leaders’ Alliance or MECLA is playing to help drive decarbonisation in the building and construction sector in Australia, that no one sector or organisation can do it alone, and that it needs both government and industry to work together to do the heavy lifting required.
The renewable energy opportunity for Japan, particularly around building out its offshore wind resource, is significant. The godfather of energy efficiency and co-founder of RMI, Amory Lovins, spoke about the possibility of Japan being a “renewable superpower” in the Asian region. Sound familiar?
Danish and Norwegian wind energy companies shared case studies about how the floating offshore wind market is commercially viable and taking off in Europe, and the significant potential for Japan to accelerate uptake of offshore wind. REI research shows that renewables could supply conservatively around 40 per cent of electricity by 2030 without relying on nuclear power. The opportunity for Japan is like Australia’s – to be a renewable energy and green manufacturing leader in the region. And policy ambitions need to reflect this opportunity for it to be captured.
The Japanese renewables sector has been stymied by grid connection difficulties and unstable and unsupportive government policies. In FY2021 renewables accounted for only 20.3 per cent of the nation’s total electricity production. While RE100 is very active in Japan and Australia, and the market for Corporate PPAs is gaining traction, there are still many barriers. Where there are big opportunities for offshore wind, other things are lacking, like development pipelines and offtakers.
The IPCC synthesis report landed heavily last week with an alarming message around the urgency of decarbonising the energy and industry system and getting off fossil fuels this decade to avoid catastrophic climate impacts. The decarbonisation task seems daunting and, at times overwhelming, particularly as both Australia and Japan play a significant role in providing energy security to the region.
In December 2022, the Japanese government launched its GX (Green Transformation) roadmap which the Renewable Energy Institute claims does the opposite. It aims to restore its costly nuclear power facilities, continue reliance on fossil fuels, lacks ambition on the massive renewables opportunity at its coastline, and is planning to export false and misleading solutions to South East Asian countries, even as the evidence shows that renewable energy (even offshore wind) can outcompete coal, gas and nuclear on cost.
Japan’s renewable energy target remains about 36-38 per cent by 2030 with ongoing reliance on nuclear. Ten of the 33 nuclear reactors have restarted and another seven more are approved for restart. The government still wants about 20-22 per cent of their power to come from nuclear technologies.
Offshore wind representatives attending the conference encouraging greater vision and opportunity. In 2021, China accounted for 80 per cent of global installations, it being the second-best year for wind energy installation. Both Japan and Australia are members of the Global Offshore Wind Association (GOWA) launched at COP27 and we hope to see much bolder plans of action in both countries.
On the regional front, Japan has launched an Asia Zero Emissions Community which includes a variety of initiatives to support the energy transition including inter-country trade. In June 2022, the first 100MW of renewables was imported by Singapore from Laos via Thailand and Malaysia as the first cross-border electricity trade thorough the ASEAN Power Grid.
Japan has in recent years financed five coal fired power stations in Thailand, India, Indonesia, and Malaysia and plans to manufacture and export ammonia to these coal plants as a means of 20 per cent co-firing these facilities from the late 2020s. Australia, as a major exporter of coal, and joint venture partner in the ammonia supply chain, will be a part of this regional activity. Whether this is green or another colour, is unclear, but it is locking in old and expensive fossil fuel technologies.
According to Indonesian presenter, Fabby Tumiwa, South East Asian nations have an aspiration to have access to clean and cheaper energy. Some countries have signed the Global Coal to Clean Power Transition in COP26, to “rapidly scale deployment of clean power generation… pledging to phase out coal plants.” None of these commitments seem to be fast enough in this critical decade of action.
Japan is the world’s third largest steel producer after China and India, accounting for 5 per cent of total world production. Close to 40 per cent is exported, mainly within Asia. Most of the steel produced is for construction and automotive manufacturing. What seems most alarming is that as a means to achieve Japan’s net zero commitments, the government plans to export about around 280Mt of its CO2 pollution from its electricity sector and industrial processes to South East Asia for potential storage underground. This seems to be the illogical solution to the industry decarbonisation problem and won’t help the steel manufacturing industry to survive in a decarbonising world. Exporting one’s waste is neither fair nor is it cost effective and logical.
In my very short time visiting Tokyo, I read about ikigai, a Japanese word roughly translates to life being worthwhile or a reason for being. I think both Japan and Australia might be encouraged to find their ikigai to help our near Asian neighbours to transition well towards cleaner and cheaper renewable energy. Japan could start with a far more ambitious target for renewables and supporting a market where customers can choose renewables more easily. For Australia, the focus should be fast tracking manufacturing of green metals and green minerals to help underpin the renewables revolution towards a more circular and regenerative economy for all.
