Japan will provide investment subsidies of a total of $1.3 billion (210 billion Japanese yen) over five years to companies using only clean power, as the world’s fifth biggest carbon dioxide emitter looks to bolster renewable energy usage.
The funds will be available for five years beginning in the 2026 fiscal year to companies, including data centers, which rely entirely on clean energy. The investment subsidy scheme will cover up to 50% of these firms’ capital expenditure on becoming 100% clean energy-powered, Juntaro Shimizu, director of the Green Transformation (GX) policy group at the Japanese Ministry of Economy, Trade and Industry, said on Tuesday, as carried by Reuters.
Renewable energy currently accounts for about 23% of Japan’s electricity mix. By fiscal year 2040, the G-7 economy plans to have renewables cover up to 50% of the electricity mix, and nuclear power to represent 20%, up from about 9% now.
Resource-poor Japan, which relies heavily on imported fossil fuels for its energy needs, wants to reduce import dependence and boost energy security.
Energy imports currently account for between 60% and 70% of Japan’s power generation—a level that is too high for comfort and that played a big part in the government’s decision to boost nuclear energy.
Following the energy crisis of 2022, in a major pivot, Japan decided to bet again on nuclear power and re-open as many nuclear power plants as safely possible.
Earlier this week, the Niigata prefecture parliament voted to restart Japan’s largest nuclear power plant, Kashiwasaki-Kariwa, more than 14 after the Fukushima nuclear disaster that saw the country shut down 54 reactors.
Before the Fukushima meltdown in 2011, nuclear energy accounted for about 30% of Japan’s electricity mix. The disaster prompted the closure of all reactors for safety checks. Since 2015, Japan has restarted 14 reactors out of 33 that are still operational, while 11 others are currently in the process of restart approval.
By Tsvetana Paraskova for Oilprice.com
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