Prime Minister: Strategic Energy Plan to Be Revised in New Fiscal Year

On March 28, Japan's Prime Minister KISHIDA Fumio declared that the Japanese government would work intensively toward revising its Strategic Energy Plan in the new fiscal year, which began on April 1.

The current Sixth Strategic Energy Plan was approved by the Cabinet in October 2021, and the Energy Policy Basic Law mandates a review of the plan every three years―i.e., soon. Discussions are expected to be conducted primarily by the Strategic Policy Committee, under the Advisory Committee for Natural Resources and Energy.

On the same day, following the Diet's approval of the FY24 budget, the prime minister met reporters. He began the press conference by saying that the government was working on a response to the January 1 earthquake that struck Noto Peninsula according to the needs of the affected areas.

He also described his administration's measures to support small- and medium-sized enterprises-including generating wage increases and dealing with labor shortages-the biggest key to exiting from deflation. In that regard, Kishida recognized that "affordable, resilient energy" would be the most important measure to restore Japan's earning power, including those enterprises. "We must change the present situation, wherein Japan imports energy and tens of trillions of yen flow out overseas," he said.

He went on to emphasize the importance of energy policy from the viewpoint of economic security, saying, "In order to shift to an energy system that contributes both to decarbonization while increasing the capability of domestic firms to earn profits, the implementation of a national strategy is absolutely necessary." He then expressed his intention to start discussions toward revising the Strategic Energy Plan.

The important theme―the core―of the current Sixth Strategic Energy Plan is to demonstrate a course of action within the energy policy toward the realization of carbon neutrality by 2050, and to reduce greenhouse-gas emissions (GHGs) by 2030 by 46% from their level in 2013.

According to the desired 2030 energy mix, the respective shares for the total generated electricity by power source are as follows: 36-38% for renewable energies, 20-22% for nuclear power, 20% for LNG, 19% for coal, about 10% for hydrogen and ammonia, and 2% for oil.

Since the issuance of the Strategic Energy Plan in 2021, energy security has become a major global focus, triggered by the Russian invasion of Ukraine in February 2022. In February 2023, the Japanese Cabinet approved a basic policy aimed at implementing the country's so-called green transformation (GX) toward simultaneously achieving decarbonization, as well as a stable energy supply and economic growth. It also enacted a bundle of related bills.

In July, toward the same ends, the Cabinet approved the Strategy for Promoting the Transition to a Decarbonized Growth-Oriented Economic Structure (GX Promotion Strategy).

At the March 28 press conference, Prime Minister Kishida also announced the issuance of the GX National Policy―based on the promotion strategy―to back up the next strategic energy plan.

Regarding matters related to electric power policies, the Advisory Committee for Natural Resources and Energy is currently working on the verification of electric power system reform, along with other responses based on the Noto Peninsula Earthquake on New Year's Day 2024, among other matters. Meanwhile, the Organization for Cross-Regional Coordination of Transmission Operators (OCCTO) is addressing future power supply and demand scenarios. The results of both of those discussions will contribute to considerations in the next strategic energy plan.