As Japan embarks on an ambitious journey to achieve its energy targets, the construction and infrastructure sectors are poised to play a key role. The draft 7th Strategic Energy Plan, unveiled on 17 December 2024 by the Japanese Government's Advisory Committee for Natural Resources and Energy, highlights Japan's commitment to energy transition.
The plan recognises that Japan must adapt to the changing global energy landscape, such as the Russia-Ukraine conflict and the situation in the Middle East. It also anticipates further energy demand stemming from digital and green transformations.
Japan aims to achieve between 40% and 50% of renewable energy in power generation by 2040. This includes developing and deploying next-generation renewable energy technologies and enhancing the supply chain. The plan focuses on integrating renewable energy into the power market while keeping integration costs low. At the end of December 2024, the Japanese Government announced the results of the third-round auction process for offshore wind, with international investors continuing to play a role in partnership with established Japanese players.
The plan also recognises the important role of nuclear power, particularly as demand from data centres and semiconductor factories increases. By 2040, nuclear energy is projected to account for approximately 20% of the country's power output, up from 9% in 2023. This marks a significant shift from the post-Fukushima era, where nuclear energy's contribution had drastically reduced.
While the draft plan is primarily focused on domestic energy production, it highlights the importance of international cooperation, particularly with Southeast Asia, to promote decarbonisation. This cooperation could involve investment and support for renewable energy projects in developing countries. Additionally, Japan's advancements in renewables could position the country as a leader in exporting such technologies abroad, fostering international collaborations and investments.
The plan is expected to be finalised by 31 March 2025. These targets and the evolving energy landscape present both opportunities and challenges in the construction and infrastructure sectors. Stakeholders will need to ensure compliance with evolving regulations and manage risks associated with large-scale renewable and nuclear projects. Robust contractual frameworks and dispute resolution mechanisms will be crucial to address potential conflicts arising from these projects.
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