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markets Japan
Japan’s Energy Sector Overview
Installed Power Capacity
- Renewable Energy Sources targets: 22% to 24% renewables share target by 2030 – PV capacity should hit 64 GW, set by METI in 2015.
- Under the Strategic Energy Plan of Japan, 10% of the primary energy is expected from renewables by 2020
- Carbon reduction target: reduce GHG emissions by 26% by 2030 compared with 2013, including 35% in the power sector
Electricity Prices, Commercial Users
- Average electricity price (C&I MV users) currently goes rather stable at around ¥15/kWh price level since deregulation in 2016
- Grid electricity users shall bear additional cost for RE surcharge, which is ¥2.98/kWh @FY2020. RE surcharge is increasing at CAGR38%
- C&I solar LCOE (levelized cost of electricity) goes below average electricity price plus the RE surcharge (grid parity) in Japan
Regulation
Government Lead Initiatives:
- Japanese government adopted 6th Strategic Energy Plan aiming at carbon neutrality by the end of 2050 while enhancing energy security. The plan also presents roadmap toward 2030 to achieve 46% carbon emission reduction against 2013.
- One of primal action plans for the 2030 carbon reduction is promoting renewable energy installation, looking at 22~23% of total power consumptions (864TWh) in 2030.
- Japanese government actively promote subsidies for on-site solar and off-site solar physical PPAs
Implementation
- Japanese solar market size became around 6.5GWp in 2021. About 3GWp was for non-FIT self consumption use, and about 10% of the self-consumption use was implemented with B2B PPA scheme.
- Current power price hike allows a power user to realize cutting cost and carbon simultaneously even without subsidies.