Why Japan Still Can't Quit Fossil Fuels
- Japan reached a new low in fossil fuel share for electricity generation, falling below 60% for the first time, driven by increased nuclear and solar power.
- Despite progress in electricity generation, Japan's total energy consumption remains heavily reliant on imported fossil fuels, with dependence still above 80%.
- Japan's offshore wind ambitions are facing significant setbacks due to global industry headwinds, including rising costs and project abandonments by major developers.
Japan marked a significant milestone in its journey toward net-zero in the first half of the year; for the first time ever, fossil fuels accounted for less than 60% in Japan’s electricity generation.
However, dependence on oil, gas, and coal imports in the resource-poor G-7 economy remains above 80% of total energy consumption amid shifting energy policies and priorities after the Fukushima disaster of 2011.
In the wake of the devastating earthquake, Japan closed all its nuclear reactors for years-long safety checks and inspections. The low-carbon energy source, accounting for about 30% of electricity output before 2011, was suddenly no longer available. The result was a spike in imports of LNG, oil, and coal, and in carbon emissions.
In recent years, particularly following the 2022-2023 energy crisis, which led to a significant increase in Japan’s fuel import bill, the country has begun to reopen some of its nuclear reactors gradually. That has helped reduce the share of fossil fuels, along with a surge in solar capacity installations.
Japan, which has a target to become a net-zero emissions economy by 2050, has realized that it will have to rely even more on nuclear power generation in the coming decades if it wants to reduce emissions and its huge dependence on fossil fuels.
In the latest energy strategy, Japan will double down on nuclear, with gradual safe restarts of reactors, aiming to more than double the share of nuclear generation of total electricity output to 20% by 2040, from less than 10% now.
The share of fossil fuels in Japan’s power supply slumped to the lowest on record in the first half of 2025, as nuclear and solar electricity generation is growing.
Japan saw its utility-scale electricity supply from fossil fuels slump below 60% for the first time between January and June, according to data from clean energy think tank Ember cited by Reuters columnist Gavin Maguire.
Japan’s dependence on oil, gas, and coal imports has dropped to 87% of total energy consumption from a high of 96% in 2012, after all nuclear reactors were closed, per data compiled by energy analyst John Kemp from the International Energy Agency’s (IEA) World Energy Balances report from 2024. Despite the decline, the share is still well above the 81% share pre-Fukushima.
Nuclear power alone cannot help Japan reach net zero—the country will need increased solar and wind capacity and generation.
Solar power deployment has been a success. Wind power, however, has lagged behind, with recent setbacks pouring cold water on Japan’s offshore wind ambitions.
Solar is Japan’s largest source of low-carbon electricity, accounting for a 10% share of generation. It has grown fivefold from 2014 to 2024, according to data from Ember.
Wind power, however, only reached 1% of generation in 2024 despite its massive potential, lagging behind the rest of the G7 where wind averaged 11% of total electricity generation, Ember notes.
Japan is looking to develop its offshore wind potential, but it has been struggling amid a challenging environment for the offshore wind sector globally in recent years.
Japan has a plan to have offshore wind projects with a total capacity of 10 GW developed by 2030 and 30 GW-45 GW by 2040. The country has held three auctions to award capacity so far, but major developers have been reviewing their options in Japan amid headwinds in the sector globally, with surging costs and supply-chain delays.
In a major blow to Japan’s offshore wind ambitions, Mitsubishi Corporation last week dropped plans to develop three offshore wind projects amid unexpected changes and rising challenges in the market.
Mitsubishi has sought to adapt to the changes in the business environment by examining various options, including reassessment of costs, project schedule, and revenue.
“However, after discussions among the partners, we have determined that establishing a viable business plan is not feasible given the current conditions,” the corporation said last week.
WIND TURBINE HEADWINDS ARE FROM TRUMP BANNING OFFSHORE WIND
Mitsubishi’s decision to abandon the projects in Japan comes amid rising headwinds to offshore wind development worldwide.
Ørsted, the world’s biggest offshore wind project developer, warned in May of a continued challenging environment for the industry with mounting near-term headwinds globally.
By Tsvetana Paraskova for Oilprice.com
Baseload Capital Backs Japan’s Furusato in Geothermal Push
Baseload Capital has announced a strategic investment in Japan’s Furusato Netsuden, a geothermal developer and operator, in a move aimed at scaling community-based geothermal power generation and strengthening Japan’s energy security. The Stockholm-based geothermal investor is backing Furusato Netsuden to expand geothermal capacity across Japan, beginning with its Waita geothermal projects in Kumamoto Prefecture and building toward nationwide deployment.
Context
Japan holds the world’s third-largest geothermal potential at 23 GW but has developed less than 3% of that capacity, constrained by regulatory hurdles and cultural sensitivities around hot spring regions. The government’s Seventh Basic Energy Plan targets 1.5 GW of geothermal capacity by 2030, and the Green Transformation Strategy aims for net-zero emissions by 2050. Furusato Netsuden has pioneered the “Waita Model,” which integrates geothermal development with community benefits, land rights protection, and profit-sharing with residents—helping overcome local resistance to projects.
Details
Baseload Capital, backed by Google and Bill Gates’ Breakthrough Energy Ventures, will provide funding and international expertise to strengthen Furusato Netsuden’s portfolio.
Furusato currently operates the 2 MW Waita No. 1 plant and is constructing the 5 MW Waita No. 2 plant, scheduled for operation in 2026.
Future plans include developing 30 MW of additional capacity across Japan over the next decade.
The partnership is intended to create a scalable, locally rooted model for geothermal deployment, with potential global applications.
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