Japan just released a new set of nuclear targets — could they be overly optimistic?
Last week, Japan’s Ministry of Economy, Trade and Industry (METI) released a draft of its upcoming 6th Strategic Energy Plan which included major changes to the FY2030 power generation mix targets.
The plan is to halve the share of of fossil fuels in the mix from 76% in 2019 to 41% by FY2030 – which will have a domino effect for coal, LNG and oil demand.
It’s the latest in a series of bold climate statements – but it’s the first targeting a significant increase in renewables and nuclear as part of the power mix.
“Perhaps the most critical and uncertain component of the draft is the nuclear target,” Wood Mackenzie principal analyst Lucy Cullen said.
“METI continues to back nuclear and maintains the previous 20-22% target.”
“Safety regulations, on-going opposition and rising costs continue to plague restarts to date and make this an incredibly challenging target to meet.”
“The outlook for restarts remains highly risked in our opinion.”
Cullen said that Japan’s over optimism on nuclear targets has the potential to undermine the government’s plans to cut fossil fuels share.
“Under the revised targets, fossil fuels fall from their dominant position in the energy mix today to 41% by FY2030, a significant drop from the 56% share projected in previous government targets,” she said.
“If met, and we remain sceptical, this represents up to about 10 Mt decline in LNG demand, compared to the previous target.”
“With greater emphasis on emission reduction reflected in the revised targets, how the government balances between generation costs and emission concerns will determine relative shares of coal and LNG and the role each plays in offsetting a likely missed nuclear target.”
Japan upgraded its ambitious 2030 emissions reduction target in April to 46% from 2013 levels, but Cullen is sceptical that the country will achieve its renewables target.
“Our current outlook for renewables is a 30% share by 2030, so the proposed 36% renewables share is a stretch,” she said.
“It can only be possible with additional government support.”