The Japanese government plans to introduce an improved energy strategy in August, tapping on lessons from unexpected disruptions to fuel shipments through the strait of Hormuz following the US-Iran conflict, it said.
The resource-poor country seeks to improve energy resilience, meet rising electricity demand and accelerate decarbonisation.
Japanese prime minister Sanae Takaichi tasked the country's trade and industry Meti minister Ryosei Akazawa late last week to recommend policies by the end of August that aim to improve Japan's energy supply-demand structure by expanding its energy options through crisis management investment.
Easing crude oil prices offer a timely opportunity to further improve Japan's energy security in co-ordination with Asia and the G7, she added.
Details of the policy package remain unclear. But the new plan may place greater emphasis on oil security and its diversification, given that Takaichi has been promoting the recently introduced Power Asia framework, which aims to ensure stable oil supply across Asia, as well as the well-established green transformation (GX) strategy, which is focused on energy security, economic growth and decarbonisation.
This would build on the existing Strategic Energy Plan (SEP), which is in line with the country's green transformation plan, emphasising gas security and expanding the use of non-fossil domestic energy such as nuclear and renewables.
The plan aims to consolidate measures that can be implemented without waiting for the next review of the SEP, which will likely take place in the April 2027-March 2028 fiscal year. Tokyo typically reviews the SEP every three years and updates it as needed, with the current plan last revised in February 2025. The plan to compile the package by August is also broadly aligned with the usual timing of Japan's initial budget requests.
Under the current SEP, Japan aims to have renewable energy making up 40-50pc of the country's power generation in 2040-41, up from 22.9pc in 2023-24. The share of nuclear power will increase to around 20pc from 8.5pc, and thermal power will fall to around 30-40pc from 68.6pc during the same period.
Japan will need to replace its nuclear capacity to maintain nuclear power's 20pc share in the power mix because a few of its reactors are expected to be decommissioned. It will need to replace around 2.2-5.5GW of nuclear capacity — equivalent to 2-5 reactors — by the 2040s. It will then need to replace a total of 12.7-16GW — or 11-14 reactors — by the 2050s, with this figure inclusive of the capacity that it replaced in the 2040s.
