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HOME > Monthly Perspective > Promote reaization of a “Nation of renewable energy industry” to achieve a “Renewable energy-oriented economic society

Promote reaization of a “Nation of renewable energy industry” to achieve a “Renewable energy-oriented economic society

2020.08.24

Japan’s energy policy will start to undergo a major revision with the Plan for creating renewable energy-oriented economy, which was set forth by Mr. Hiroshi Kajiyama, Minister of Economy, Trade and Industry, in addition to the enactment of the Acts for Establishing Resilient and Sustainable Electricity Supply Systems, looking to the future. Specifically, as for renewable energy, whose future potential is highly evaluated, Japan will largely shift its direction to make renewable energy a mainstream power source at an early stage.

 

The Ministry of Economy, Trade and Industry (METI) held a joint meeting of the Study group on the basic concept of Environmental Impact Assessments (EIA) related to PV power generation facilities, etc. and the Subcommittee on System Reform for Renewable Energy as Main Power Source to design new details on renewable energy based on the Acts for Establishing Resilient and Sustainable Electricity Supply Systems and announced the basic principle, entitled Towards creating renewable energy-oriented economic society, for discussing the fourth phase of dissemination and expansion of renewable energy. These subcommittees have been working on expansion of introduction of renewable energy and addressing the issues. The report for the third phase made by the Subcommittees is leading drastic revision of the current FIT Act and driving a reform of the FIT Act into the new Renewable Energy Promotion Act.

 

The basic principle towards the fourth phase steps further into a new direction of creating a renewable energy-oriented economy from just making renewable energy a mainstream power source. The main pillars are 1) evolving into a competitive renewable energy industry; 2) establishment of social infrastructure to support renewable energy such as networks and 3) establishment of local communities harmonized with renewable energy. In this RTS Monthly Perspective section of July 2020 issue of this report, we have made a proposal for Japan to become a renewable energy-oriented country, but in formulating the coming Sixth Strategic Energy Plan, establishing a renewable energy-oriented economic society will become one of the frameworks and a significant increase in the renewable energy ratio in the energy mix is also expected.

 

In making renewable energy a mainstream power source, which will be the basis of renewable energy-oriented economic society, the following three points are indispensable. Firstly, to make renewable energy itself a mainstream power source by stably supplying large amount of low-cost renewable energy through technical development, etc. This can be realized through integration of PV with energy storage technologies such as storage batteries. Secondly, to position renewable energy as one of the pillars in the energy policy. Japan has been aiming to make renewable energy a mainstream power source since the Fifth Strategic Energy Plan. Thirdly, to make the renewable energy industry a key industry, for which political support on the industry side will be important. Making the renewable energy industry a key industry will activate investment by the existing renewable energy industry and the conventional energy industry as well as the financial industry, which will support in making renewable energy a mainstream power source from the industry side. In creating a renewable energy-oriented economic society, aiming to realize the competitive renewable energy industry is the important point, which had not been focused so far.

 

Toward creating a renewable energy-oriented economic society as mentioned above, it is essential for the industry to have a strong commitment to actually expand renewable energy as a business. PV, along with hydro and wind, is an important renewable energy source for Japan to become a renewable energy-oriented country. The industrial sectors supporting the PV industry can be broadly classified into the one suppling PV power and the one utilizing PV power. The former sector, which once was the world’s largest, is now under a severe global competition, whereas the latter sector, which is a new industrial sector which is expected to grow significantly hereafter. Activities toward making PV power generation a mainstream power source are just starting in full scale and the formation of the industry through integration of both the supplier and the user industries will be the linchpin. Taking the 2020s as a great opportunity, the PV industry consisting of these two sectors should aim to become a key industry through partnership between the industry and the government, and is expected to promote business development as shown in Figure 1 and Figure 2. Japan should once again lead the world as a country of renewable energy-oriented economic society.

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