Last year, the transition to renewables gained momentum among Japanese corporations. Not only have companies started to source their electricity from renewables, but there were several other movements that indicated that energy-related business trends have begun to change considerably.
Overseas projects on renewable energy development by Japanese companies are expanding significantly. Hitachi, whose chairman currently chairs the Japan Business Federation, announced to suspend nuclear projects in the U.K. and at the same time made the decision to acquire the power grid business of ABB Ltd., one of the world leaders in power distribution. TEPCO and other former general electricity utilities announced full-fledged participation in renewable energy development, including offshore wind power. At the same time, there continue to be announcements of plans for new coal-fired power plants being discontinued.
Moving to renewables from coal and nuclear, and increased efforts to implement energy efficiency measures have characterized the energy transition over the past few years and has indeed become an established global trend. For Japan, 2018 has been a year when this energy transformation has finally begun on a full-pledged basis.
What is distinctive about this transition is that business is leading the charge. The IPCC issued the 1.5°C Report in October of last year, and implementation rules for the Paris Agreement were decided at COP24. Companies clearly recognize that the move to a decarbonized society is fully underway and are hastening to convert their business models.
Japan Climate Initiative, a network of non-governmental actors administered by the Renewable Energy Institute with CDP Japan and WWF Japan, increased its membership by over three times in the several months after its establishment in July of last year. Presently, over 200 companies participate, including Japan’s major corporations and key companies in the country’s regional economies.
Unlike trends in the business world, however, Japan’s energy policy still tends to run counter to this transition. If the government remains fixated on older technologies like nuclear and coal-fired thermal, it will forfeit the opportunity to develop Japanese business globally. The government is also not actively engaged in realizing international grid interconections that will play a key role in energy transition. The U.K., an island nation like Japan, continues to build and plan a dozen or more international transmission lines that connect it with other European countries. Its total capacity will reach one-third of maximum domestic demand. Japan also needs to make the development of international grid interconnections a focus of policy.
The year 2019 is when G20 will be held in Japan, and the world’s attention will be on Japan’s energy and climate change policy. We want this year to be a year of accelerated growth in the renewable energy business and change in government policy.
Renewable Energy Institute will hold the RE-Users Summit on February 1 this year, followed by a symposium on the prospects for industry, energy and power for 2030 and 2050. On March 6, we will host REvision 2019 with global pioneers in renewable energy business and policy. Prior to G20 in June, we also plan to hold a series of events alongside F20, a gathering of global institutes working together to move forward to fulfill de-carbonization goals. We plan to release recommendations and reports on such topics as electricity system reform, grid operations and maintenance, long-term reduction strategies, and global nuclear power trends.
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