Japanese firms shift to clean energy despite state’s enduring commitment to nuclear power

by Hidetoshi Takada

Kyodo

As Japan’s government clings to nuclear power even after the Fukushima crisis, the private sector is moving ahead with greater use of renewables to power their operations amid growing international awareness of climate change.

For instance, in March Daiwa House Industries Co. became a member of both RE100 (Renewable Electricity) and EP100 (Energy Productivity), two global initiatives by the Climate Group.

RE100 is a global, collaborative initiative of influential businesses committed to using 100 percent renewable electricity, while EP100 brings together companies committed to doubling energy productivity to lower greenhouse gas emissions. Among RE100’s 136 members are U.S. General Motors Co. and Dutch consumer goods giant Unilever.

Printer-maker Ricoh Co., the first Japanese firm to join RE100, was followed by five firms such as online stationery retailer Askul Corp. and retail giant Aeon Co., aiming to meet the electricity needs of their global operations with renewable energy between 2030 and 2050.

Daiwa House says it is the world’s first company in the construction and housing sectors to join both campaigns and the first to declare it is taking bold action, as part of EP100, among Japanese firms. Currently, there are 15 EP members. Daiwa aims to achieve both goals by 2040.

Katsuhiro Koyama, general manager of Daiwa’s environment department, spurred debate over achieving the targets after returning to Japan from the COP23 global climate round in Germany last November.

He had previously taken a cynical view of such tech giants as Apple Inc., Google Inc. and Microsoft Corp. participating in the RE100 clean energy initiative, seeing it as an “atonement for their sins” for consuming huge amounts of electricity.

But as one of the Japanese delegate members to the global conference, Koyama said he was “inspired” by the firms’ “serious aspirations to leverage clean energy producers” after hearing various discussions.

The Osaka-based Daiwa group has invested an estimated ¥46.6 billion in the construction of its own solar, hydro and wind-power plants nationwide since 2007, producing power equivalent to about 60 percent of the group’s annual use of 481 million kilowatt hours. Meanwhile, it doubled its electricity use efficiency in fiscal 2016 compared to fiscal 2005.

Japanese businesses became much more aware of renewable energy in the wake of the Hokkaido Toyako summit in 2008, in which the Group of Eight countries set a long-term target to reduce greenhouse gas emissions. The 2011 Great East Japan Earthquake, which triggered the suspension of all nuclear power plants, also sparked public concerns over the country’s energy mix.

The ratio of renewable energy to the nation’s entire power output capacity has risen from 10 percent in fiscal 2010 to 15 percent in fiscal 2016, according to the Agency for Natural Resources and Energy, boosted by a feed-in tariff system that obliges utilities to buy electricity generated by renewable energy at fixed prices. The scheme has attracted businesses large and small — even individuals — to pour money into the field of photovoltaics as they requires less effort to install and operate in a shorter period of time compared to other types of energy sources, said Yushi Inoue, a research director at think tank Mitsubishi Research Institute.

Individual power producers are actively trying to connect with grids in northeastern Japan, and in a recent offering sought to supply “more than three times what we can accept,” according to a spokesman of Tohoku-Electric Power Co., the regional utility.

The region, part of which was devastated by the mega-quake seven years ago and the subsequent nuclear disaster, has a number of favorable locations for wind power plants.

Meanwhile, a similar scheme in Europe that utilizes renewable energy certificates and a guaranteed origin of electricity generated from such sources has gained momentum among environmentally conscious firms, particularly after the 2008 summit in Hokkaido. The tradable green certificate proves “environmental added value” created by renewable energy producers, and can be purchased by electricity users.

Despite the financial burden, Ajinomoto Co. switched its energy source to renewables for its entire annual electricity use of 4.5 million kilowatt hours at its Tokyo headquarters and major sales bases at home in the business year to March 2018.

Japan’s major seasoning- and food-maker extended the move to its four group arms in April, aiming to boost its renewable energy use to 50 percent of the group’s total energy consumption by fiscal 2030.

The targeted figure is part of various nonfinancial targets compiled for the first time in its three-year business management plan that started in fiscal 2017, said Mototsugu Shiratsuchi, general manager of the environment management support group of Ajinomoto.

Although the volume of certified renewable energy is fairly small relative to the entire clean energy output in Japan, it has been steadily rising — reaching 378 million kilowatt hours in the year to March 2018, according to the Japan Quality Assurance Organization, the accreditation body.

Japan Natural Energy Co., the leading certificate issuer, has over 150 firms as long-term clients, such as Sony Corp., Asahi Breweries and about 300 customers on a one-time contract basis.

The company is the pioneer in the field with about an 80 percent market share, according to the accreditation body.

President Masaru Terakoshi said that one of Japan’s global carmakers employed the certificate as part of its corporate social responsibility policy for 15 years but terminated a contract with the issuer two years ago.

The automaker, however, is set to repurchase the warrant this year following re-examination of how it can apply the certificate to its production activity.

Terakoshi declined to specify which automaker, but the example indicates that Japan’s multinational corporations are becoming more aware of taking leadership roles in the fight against climate change.

“Otherwise, companies face a risk of losing clients,” he said, as most of the world backs the landmark Paris accord goal of effectively reducing net carbon dioxide and other greenhouse gas emissions to zero in the second half of this century.

The tradable certificate is widely used. Some hotels, for example, buy the warrants to show that their banquets are sustained by clean energy.

In its latest draft energy mix plan, due to be finalized this summer, the Ministry of Economy, Trade and Industry called nuclear power “an important baseload energy source.” This stance appears to conflict with public opinion, which shifted after the 2011 Fukushima disaster. In addition to public sentiment against nuclear power plants, the government’s tougher safety standards led to the shutdown of all reactors.

In the fiscal year through March 2017, fossil fuels accounted for 83 percent of Japan’s electricity output capacity. Renewables are currently at 15 percent.

The ministry proposes that nuclear power should account for 20-22 percent of the country’s power sources in 2030, and renewables 22-24 percent, which still lags behind the equivalent figures seen for major European nations in 2015.