RE100 calls on the Japanese government to urgently grow renewables capacity

RE100 is calling on the Japanese government to take urgent, concrete steps to grow its domestic renewable electricity capacity, using the upcoming 7th Strategic Energy Plan to set a target to triple Japan’s installed renewables capacity from 121GW in 2022 to 363GW by 2035, at the latest.

To help the Japanese government increase its domestic renewables capacity, RE100 has today launched its Policy Recommendations for Japan. These are six policy steps to create an enabling environment for renewables and align Japan with its 2050 net zero target. The recommendations call on the government to facilitate getting more renewables projects off the ground, to speed up grid connection times for new renewables projects, and to enable renewable electricity to be purchased at a fair market price.

The focus of the messages is on improving the availability, accessibility and affordability of renewables in Japan. They were developed in collaboration with RE100 members that operate in Japan, in support of their goals to reach 100% renewable electricity. 

RE100 has over 200 members, either locally headquartered or international companies with operations in Japan. 87 members headquartered in Japan represent 65TWh of electricity consumption based on their electricity usage when they joined RE100, all of it committed to being 100% renewable by 2050 at the latest.

Climate Group’s RE100 initiative said, Japan needs to take policy action to meet the renewable electricity needs of its large corporates. By increasing its domestic renewables capacity, Japan can significantly improve its energy security, safeguard its international competitiveness, and increase private investment in more renewables projects.

Japan’s electricity is still heavily dependent on fossil fuels; the country is the world’s biggest importer of liquified natural gas, and it spends between US $140-230 billion a year, or between ¥21-34 trillion Japanese Yen, on fossil fuel imports. 

With over 200 RE100 members operating in Japan, it’s clear that some of the largest corporates in the world are crying out for renewables, and we’re asking the Japanese government to urgently meet their needs. Our Japan Policy Recommendations set out exactly how Japan can do just that. It’s time to drive up the country’s renewables capacity, safeguarding Japan’s energy security and economic standing

Renewables make up just 22% of the country’s total electricity generation, the lowest share among G7 countries. RE100 members rank Japan as the second most challenging market for procuring renewable electricity, citing high costs, limited supply, and procurement challenges. RE100 members currently meet just 25% of their electricity needs with renewables in Japan, lower than the global average of 50%. A recent report by RE100 found that in Japan and other G20 countries, policy barriers are blocking the huge economic potential of corporate renewables demand.

At COP28, over 130 countries, including Japan, committed to triple the world’s installed renewable generation capacity by 2030. Japan recommitted to this goal at the G7 meeting in April 2024. 

Now those commitments need to be met by concrete action, to rapidly increase Japan’s installed renewables capacity, so it benefits from the economic opportunities of the corporate switch to renewables

In full, the RE100 Japan Policy Recommendations are:

1. Implement policies promoting transparent and fair electricity prices, aiming to improve the cost-effectiveness of renewable electricity generation and pricing.
   1. Ensure predictable and fair cost allocation of regulated cost-adders between generators and end-users by clarifying balancing and connection costs.
   2. Fairly recognise renewable energy efforts in upcoming carbon pricing policy by exempting renewable energy purchasers from the levy.

   3. Enable transparent cost comparison by disclosing how generation costs of each respective power source is calculated, including indirect subsidies.

2. Establish a target to triple installed renewable energy capacity from 121GW in 2022 to 363GW by 2035, at the latest, in order to grow the Japanese renewables industry and increase the domestic supply of renewables.
   1. Integrate the demand side voice in decision making on renewable energy policies by assigning them seats on relevant committees.   
   2. Improve inter-ministerial coordination and alignment to streamline renewable energy siting and permitting application processes and approvals.
   3. Speed up and expand the size of the offshore wind auction and installation process.

   4. Review land-use regulation in consideration of the natural environment and local acceptance to support the expansion of renewable energy. 

3. Improve access to Physical and Virtual Corporate Power Purchase Agreements (PPAs) by establishing streamlined processes and removing barriers for buyers and suppliers.
   1. Establish clear guidelines to promote initiating and executing Physical and Virtual Corporate PPA contracts. 
   2. Include wording on the positive impact of Corporate PPAs for expanding new renewables projects in any government roadmaps and plans.
   3. Improve the incentive for renewable electricity purchases in Corporate PPAs that are not in the FIT/FIP scheme.
   4. Improve the accessibility of Corporate PPAs through supporting an environment where off takers can interact with a broader range of suppliers. 

   5. Identify and resolve issues in virtual PPA accounting practices, so that there is no additional burden for buyers.

4. Prioritise grid upgrades and operational improvements to speed up the connection time for new renewables projects and maximise usage of existing renewables to avoid curtailment.
   1. Improve the regularity of demand and supply forecasting to advance short term planning and increase grid infrastructure and power system data transparency for long-term planning.
   2. Incentivise grid operators to invest in grid-enhancing technologies that support the efficient and flexible use of existing grid infrastructure. 
   3. Dedicate more funds to grid operators to better enforce the connect and manage scheme and reduce the long lead time to connect new renewables projects.

   4. Improve grid flexibility and resilience by maximising the use of decentralised renewables, with an emphasis on solar projects.

5. Mobilise 17.9-18.1 Trillion Yen in public and private investment from 2025-2030 towards renewable electricity and related technologies[1].
   1. Strengthen market predictability by increasing investment from Green Transformation (GX) Transition Bonds, or by issuing new green bonds, into proven domestic renewable energy technologies.
   2. Increase investment in energy storage and management schemes to respond to the variability of renewables. 

   3. Ensure greater alignment with grid masterplan and renewable targets by improving short- and medium-term investment in enhancing the transmission and distribution network, including regional inter-transmission lines.

6. Simplify Non-Fossil Certificates (NFCs) issuing, tracking and certifying system to better align with international standards.
   1. Introduce more flexible contract lengths, such as by extending the validity period to allow for better annual matching between supply and demand. 
   2. Provide clearer future projections of what NFC floor prices and NFC price trends are likely to be.
   3. Enhance the transparency of NFCs by disclosing granular information on the time at which renewable generation occurs and its location prior to purchasing.
   4. Adjust the trading system from four auctions a year to more frequent buying options.

[1] Institute for Global Environmental Strategies (IGES). 2023. "IGES 1.5 Degree Roadmap: Main Report (Japanese)." 

Kirin Group supports the RE100 localised policy messages. In order to achieve net-zero GHG emissions, it is essential to shift to 100% renewable energy for electricity consumption. We believe it is necessary for companies to formulate transition plans consistent with the 1.5℃ pathway and accelerate climate actions as their business activities

As a member of RE100, we participated in the RE100 Japan Policy Working Group and engaged in discussions with Climate Group and other member companies about the challenges of procuring renewable energy in Japan. Through this policy message, we hope for an acceleration in the efforts on renewable energy, such as increasing Japan’s renewable energy capacities and technological investments. As part of LY Corporation group’s “2030 Carbon Neutrality Declaration," we will promote the introduction of renewable energy sources in order to reduce greenhouse gas emissions from our business activities to virtually zero

We are delighted that IKEA Japan supports this initiative. IKEA was founded with a simple yet powerful vision - to create a better everyday life for the many people. To live up to this vision in an increasingly complex world, we must play our part in tackling some of the big challenges facing humanity. For us, partnerships and collaborations have always been a cornerstone of our work, and this is more important now than ever to drive the next level of action. Accelerating the renewable energy transition is key to limiting global warming to 1.5°C.