Japan’s new renewable energy plan falls far short

The Japanese government is preparing a new energy plan that seeks to grow renewable energy, but its goals fall far short of what other major industrial countries are doing. By the year 2040, fifteen years from now, some 40-50% of electricity are to come from renewable sources (roughly a doubling from today), another 20% from nuclear power and the remaining 30-40% from fossil fuels such as coal, oil and gas.

Meanwhile in Germany, renewable energy sources such as wind, solar, hydro and biomass already accounted for 52% of electricity generated in 2023. By 2030, this share is supposed to grow to 75%. Put another way, Japan is aiming for a lower share for renewable power fifteen years from now than Germany already achieved a year ago!

This is not because somehow Germany’s climate or geography was much more favourable for renewable energy than Japan’s, to the contrary.

Japan lies much closer to the equator than Germany, which means solar panels will be much more productive in the Land of the Rising Sun than in Central Europe. The northernmost point of Hokkaido lies 45° north of the equator while even the southernmost point of Germany lies 47° north. Tokyo is closer to the equator than Southern Spain.

Germany has a lot of wind turbines along its wind swept North Sea and Baltic Sea coasts, both on-shore and off-shore, but its coast line is much shorter than that of Japan: Germany has a total of roughly 21,000 km2 of territorial waters (i.e. within 12 nautical miles of the coast) while the equivalent number for Japan is 440,000 km2.

As factors that hold back renewables, Japan is citing “instability due to being dependent on the weather and its high cost”, when actually solar and wind are already cheaper to install and run than fossil fuel thermal power plants. They are the cheapest sources of newly installed power capacity virtually anywhere on the globe.

For sure, the variability of output must be addressed to be able to provide the majority of power from these sources, but that can be done. For one, the cost of battery storage has dropped dramatically over the past 10-15 years, which has allowed huge amounts of capacity to be added to electricity grids. For example, California grew its battery storage capacity by a factor of over 15 from 2019 to 2024 and now has over 13,000 MW of battery power supporting its grid. This has allowed it to consume renewable energy at different times of the day and not just when there is the most sunlight.

Wind and solar in some ways are complementary sources of power, as wind tends to be stronger after sunset and in the winter, whereas the sun provides the most energy around midday and in summer. Combining the two will minimize the need for storage or for peaker plants that burn gas.

Another way to even out production is by integrating long distance grids so that a surplus in one region can cover the shortfall in another region. Within Europe, Germany exchanges electricity with Scandinavia but also with France, which in turn connects to Italy and Spain. Japan is very weak in this regard. Its electricity grid consists of 8 regional grids with limited interconnect capacity. It is split down the middle by mains frequency, with western Japan using 60 Hz like in North America while eastern Japan uses 50 Hz like in Europe. High Voltage Direct Current (HVDC) lines can take care of this, but they need to be built. Regional grid operators have little incentive to do this because they also own existing power stations whose output they want to sell.

Japan needs to rethink its renewable energy strategy if it wants to achieve its climate goals and end its dependency on costly energy imports. Its first priority should not be the profits of its existing electricity sellers, the importers of fossil fuels, the shipyards that build the ships that carry petroleum and coal, etc. Japan needs to upgrade its grid with long distance transmission capacity, grid level power storage and ease connection of wind and solar power capacity to cut its dangerous and harmful dependency on fossil fuels.

Battery electric cars in Japan

BYD, China’s leading EV maker announced it will release three models for the Japanese market in 2023.

Meanwhile Toyota has only launched a single battery electric model in its domestic market (Toyota bZ4X SUV in 2022) while Nissan has launched two (Nissan Leaf in 2010, Nissan Ariya SUV in 2022). Both brands are still concentrating on gasoline-powered hybrids. The bZ4X is also offered as the Subaru Solterra, with some minor differences from the Toyota-badged model.

Germany’s VW is still holding back on its ID.3 and ID.4 models in Japan, perhaps because it can’t manufacture enough of them even for the European market. The VW group is only represented here in the battery electric market by its luxury brands Audi and Porsche.

Korea’s Hyundai launched the Ioniq 5 this spring, with the larger Ioniq 6 to follow next year.

It looks like 2023 will be an interesting year for BEVs in Japan which until now has been lagging far behind China, North America and Europe in the electric mobility transition.

On my last trip to the UK I was amazed by the number of BEVs of every brand and model I saw in London compared to Tokyo. In 2021, only 10,843 Nissan LEAF and another 8,610 imported electric cars were sold in Japan (about 60% of which were Tesla). That’s under 20,000 in total or 0.2 % of about 6.9 million new cars sold. The UK, with roughly half the population of Japan, bought 190,727 new electric cars the same year. About 1 in every 6 new cars registered in June 2022 in the UK was battery electric.

China recognized that BEVs are a strategic move. Taking the lead will allow them to leapfrog laggards like Toyota who are too wedded to their own past successes to make the necessary transition to a decarbonized future. And it’s not just about the cars: China also added more solar and wind power last year than the rest of the world combined to make it possible to charge these cars without burning fossil fuel. It has heavily invested in long distance HVDC transmission to shift renewable power over great distances while Japan’s grid still consists of separate grids in West Japan, East Japan and in Hokkaido with extremely limited interconnection capacity.

A couple of months ago Toyota upgraded its forecast for electric vehicle sales in 2030 from 2 million a year to 3.5 million a year, which is about one third of its current annual sales. That’s for almost a decade in the future! This suggests it doesn’t see a tipping point where battery electric overtakes internal combustion engines until later in the 2030s. It is hardly surprising then that during the recent G7 conference in Germany, Japan lobbied hard to remove a goal of at least 50% zero-emission vehicles for 2030 from the climate goals communique, presumably at the request of its car industry. Meanwhile 80 percent of new car sales in Norway are already battery electric.

When Toyota launched the bZ4X into the Japanese market this year, it announced a sales goal of only 5,000 units, roughly 1/10 of annual sales of the Toyota RAV4 that it most closely resembles and half of the annual volume of the 11 year old Nissan LEAF.

Furthermore, the bZ4X is not offered for sale to individual consumers who can only get it through leasing contracts. Supposedly this is “to eliminate customer concerns regarding battery performance, maintenance, and residual value.” This move paints long term performance of battery electric cars as a weak point when it isn’t (at least it isn’t with Tesla and other brands). By offering only leasing contracts, Toyota is casting shade on the technology.

At least due to the launch of the bZ4X Toyota will install DC fast chargers at its dealerships by 2025. Many Nissan and Mitsubishi dealers already have 30 kW DC chargers installed and a few have 50 kW chargers (more kW means a faster maximum charging rate) while most Toyota dealers still only offer 200 V AC charging, the most basic of all. The maximum charging rate with 200 V AC is a mere 6 kW. In countries with three phase AC, a 3 phase domestic AC charger that supports 11 kW will be offered by Toyota from the end of 2022. Until then, home charging in your garage or driveway will be limited to the lower rate.

DC charging of the bZ4X can go as fast as 150 kW, but available public DC chargers in Japan right now tend to be limited no more than 50 kW (most of them at car dealerships). For example, right now there are only 4 locations in Central Tokyo that offer 90 kW or more.

I think we will see change in the battery electric vehicle market Japan in the next few years, largely driven by foreign manufacturers introducing new models that Toyota, Nissan and other manufacturers will struggle to compete with. But they will have no choice but to step up the pace of the zero-carbon transition if they don’t want to lose their existing market share here in Japan and in export markets. Otherwise Toyota may become the Nokia of the car industry.