Last December, COP28 adopted a goal to triple the world's installed capacity for renewables from the current level by 2030. This year, Japan will revise its Strategic Energy Plan. In the new strategic plan, Japan needs to establish a path to realize the tripling renewable energy as quickly as possible.
Behind the world's agreement to the lofty goal of tripling the amount of renewable energy over the next seven years is the reality that the deployment of renewable energy is actually progressing rapidly. Particularly remarkable is solar PV, with 243GW of new installations added in 2022 compared to its growth of 50 GW in 2015, when the Paris Agreement was signed. The growth in 2023 is estimated to have exceeded 400GW. A report released last September by the International Energy Agency (IEA) predicts that nearly 900 GW will be installed annually in the early 2030s. Offshore wind power, another driving force, was delayed in Europe and the U.S. last year due to rising costs caused by inflation, but by adjusting the bidding system, there are now prospects for development to get back on track again.
In Japan, after recording 10GW per year in 2014 and 2015, solar PV installation has stagnated and currently stands at around 6GW. One of the future frontiers of PV installation is the use of rooftops of houses, buildings, and urban facilities. The installation rate in new homes is still only a 10s of percent. There is great potential for installation in new and semi-new buildings, with no need to wait for the commercialization of perovskite. In addition, projects are being created that coexist with agriculture and contribute to its maintenance and reinforcement through the development of solar photovoltaic power generation using farming and abandoned farmland. On offshore wind power generation, a study conducted by our Institute last year revealed that there is a potential of 176GW for the fixed-bottom type in the territorial sea and 952GW for the floating type in the territorial sea plus the entire EEZ. This huge potential can be made a reality by realizing a “centralized system” that is comparable to international standards and by creating a structure and investment environment that will enable the development of floating projects.
Although there are many officials in government ministries and agencies who are making serious efforts to promote the development of renewable energy, there remains a deep-seated adherence to fossil fuels, such as the continued promotion of ammonia co-firing to extend the life of coal-fired power generation, even after the withdrawal from fossil fuels was agreed at COP28. If the current situation is left unchecked, where the percentage of electricity generated from renewable energy sources lags far behind European countries, China, Australia, and has begun to lag behind the United States, there is a real concern that many companies, including semiconductor manufacturing plants that are required by their customers to use renewable energy, will abandon the idea of having their facilities in Japan. Steel production also requires large amounts of inexpensive renewable electricity for decarbonized/low carbon steelmaking. To accelerate the shift from fossil fuels to renewables, it is also necessary to bring the current extremely low Japanese carbon price closer to international levels. It is an argument from the past that high carbon prices lead to corporate exodus.
During the upcoming discussions on the formulation of the 7th Strategic Energy Plan, it is necessary to establish a path to greatly accelerate the deployment of renewable energy and energy efficiency, including the acceleration of power grid enhancement. It is also necessary “to realize effective carbon pricing," which Japan Climate Initiative called on the government last December, jointly signed by many companies.
As the first event of the New Year, Renewable Energy Institute will hold a seminar on January 17 on the theme of the prospects for tripling of renewable energy, followed by REvision 2024 on March 14 with speakers from abroad. Taking advantage of various opportunities, we will continue to engage in constructive discussions, with corporations, local governments, NGOs, and ministries and agencies of the national government, with the aim of accelerating Japan's energy transition.
We look forward to working with you this year.
