Japan Energy Currents
GX for regional revitalization; Rising electricity demand; Japanese public still unworried about climate change; Japan-Korea cooperation on hydrogen and CCS, and more
Hey Power Japan readers,
I hope you had a good weekend and a good start to the week.
After the barrage of presidential actions and nominee appointments closely following Trump’s inauguration, every last policymaker, diplomat, business leader, campaigner, and commentator is trying to divine the future. The future, in this case, can refer to anywhere from next week to four years from now. That’s true uncertainty.
Things are far more stable in Japan, but alas, perfect uncertainty is also out of reach there. With Prime Minister Ishiba’s approval rating staying flat or steadily sliding (depending on which poll you pay attention to), his rivals in the Liberal Democratic Party are starting to bolster their own support in preparation for a shot at the leadership spot.
But the country’s energy transition continues. Every week, Japan Energy Currents will highlight recent news and analyses that give us a better understanding of the current moment in Japan’s energy landscape and its role in the global energy transition.
Some articles will be in Japanese and some will be paywalled. But I’ll aim to summarize each article with enough detail so you won’t miss out.
This week, I bring you six stories that caught my attention.
1. PM Ishiba’s policy speech: GX as the 4th pillar of regional revitalization 2.0 (Prime Minister’s Office | in Japanese)
Prime Minister Ishiba Shigeru made waves with his policy speech at the start of the Diet’s regular session by focusing on creating a “pleasant Japan” (or “fun” or “enjoyable” Japan, depending on how you translate 楽しい日本), where everyone feels secure, aspires for their dreams, and feels that "tomorrow will be better than today.”
Core to establishing a pleasant Japan, he said, is regional revitalization 2.0, in which both urban and rural areas are appealing places to live and work. For this revitalization, Ishiba proposed five “pillars”: 1) making rural areas attractive for young people (especially women), 2) facilitate the relocation of industry, government, and academia to rural areas, 3) creating environments conducive to innovation, 4) developing infrastructure for a new era, and 5) inter-regional cooperation.
Ishiba positioned Green Transformation (GX) as the fourth pillar of developing infrastructure. Specifically, he pointed to expanding carbon-free power sources like renewables, nuclear, and hydrogen, and efficiently developing their supply networks. Developing new industrial sites and related infrastructure will be key for this. How will this be financed? Ishiba also vowed to finalize the so-called “growth-oriented carbon pricing” and transition to a circular economy to attract over JPY 150 trillion in GX investment.
Compared to former PM Kishida’s policy speech last year, Ishiba seems far more focused on using GX and other policies to stimulate domestic economic growth — and specifically rural development. Kishida was more concerned with expanding big decarbonization industries like hydrogen, carbon capture and storage, offshore wind, and nuclear, as well as strengthening Japan’s influence in energy diplomacy through the Asia Zero Emission Community (AZEC).
2. Further confirmation of rising electricity demand (Nikkei GX | in Japanese)
Japan’s grid coordinator OCCTO published its annual electricity demand outlook, showing that AI-related energy use (data centers and semiconductor manufacturing) will drive up demand by 6.2% by 2034. This analysis is further confirmation of what most people expected.
Last year’s outlook assumed electricity demand to fall, given improved energy efficiency and a declining population. The recent expectation for demand growth marks a sea change that Japanese utilities and policymakers are grappling with.
Leading the 6.2% demand growth by 2034 is the industrial sector, whose energy use is projected to rise by 19%. Breaking this down by region, Hokkaido’s energy use will grow by 8% and Tokyo by 6%, but demand in several other regions will decline.
3. Japanese public hasn't internalized the climate crisis (Hakuhodo DY Holdings | in Japanese)
The Tokyo-based Hakuhodo DY Holdings surveyed over 1,400 people in Japan to gauge the impact of the “Promise of 1.5°C” campaign by the UN Information Center and media organizations. This was the third annual impact survey for this initiative.
There were some discouraging results: the share of respondents who’d heard of phrases like “Temperature rise should be limited to 1.5°C” declined since 2022, and the greater the respondents’ sense of crisis about climate change, the less action they took to mitigate it compared to last year’s survey.
But there were some positive findings, too. ~80% of people said their interest in decarbonization increased after coming across campaigns and information about climate change. Why? "Because it was reported in multiple articles, programs, SNS posts, etc.," "because I learned about specific events and impacts of the climate crisis," and "because I learned about specific actions for decarbonization.”
Biggest takeaway? The media and other organizations should talk about climate change, its impacts, and solutions in concrete and direct ways, through multiple channels.
4. Japan-Korea cooperation on hydrogen, ammonia, CCS (Korea News Plus)
The Japan Organization for Metals and Energy Security (JOGMEC) and the Korea National Oil Corporation (KNOC) signed a memorandum of understanding (MOU) to strengthen cooperation in hydrogen, ammonia, and carbon capture and storage (CCS).
JOGMEC and KNOC have a history of working together, mostly focused on oil stockpiling. The new areas of cooperation signify the strategic additions the two bodies have made to invest more heavily in new fuels and CCS.
Specifically, they’re aiming to explore joint strategies to establish a stable hydrogen supply system through info and knowledge sharing and facilitating cross-border transport of captured CO2 for storage.
This partnership is one facet of strengthening Japan-South Korean ties in the face of deepening security challenges in the region and political tumult in Korea.
5. Agrivoltaics as a solution for solar PV land scarcity (Nikkei GX | in Japanese)
It’s a solution that, once you hear it, you wonder why you didn’t think of it before. Agrivoltaics is the practice of installing solar panels above farmland. Crops benefit from shade and lower temperature, farmers receive income from solar electricity generation, solar energy developers benefit from more land, the world benefits from fewer CO2 emissions.
In Japan, agrivoltaics installations have picked up pace since 2013. The annual land area used for agrivoltaics has risen from less than 25 hectares in 2013 to over 200 hectares in 2022.
The government wants to increase renewable energy as a share of the total electricity mix to around 40-50% by 2040. Solar energy will be the primary driver of this growth, but the scarcity of big plots of land for utility-scale solar is becoming more of a bottleneck. Agrivoltaics should be one of the answers.
6. BYD to strengthen presence in Japan’s EV market (Denki Shimbun | in Japanese)
BYD Japan, a subsidiary of the Chinese EV manufacturer, announced that it’ll be rolling out mid-sized electric trucks and buses from 2026 onward.
The company first introduced an EV bus in Japan in 2015. Since then, its share of the Japanese EV bus market has grown to over 70%.
That’s it for this week’s Japan Energy Currents. Let me know which news caught your attention in the comments or in the subscriber chat.
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