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THREAD: Japan has some serious climate ambitions, and some even more serious zero-carbon electricity challenges. The latter are becoming existential for Japan Inc 1/ https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
2/ More than 40 major Japanese companies have pledged to source 100% renewable electricity for their operations. More financial institutions in Japan than in any other country now support the framework developed by the @FSB_TCFD https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
3/ Japan Inc.’s pledges to source renewable energy, though, are running up against the country’s physical and political energy landscape. Japan imports nearly all of its fuel. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
4/ Japan has relatively scarce empty space to host large-scale solar projects; and it has a lengthy and expensive permitting process for wind energy. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
5/ The country’s regulatory framework, which favors its big power utilities, makes it very difficult for corporations to buy clean energy directly from generators. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
6/ The combination of all these factors has created unbearable tension between the country and its leading companies. Sony , told Japan’s minister for administrative reform that if it can't get clean electrons locally, it will relocate factories. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
7/ Power generation is responsible for more emissions than any other sector of the country’s economy. That in and of itself is not unusual—the U.S. was in the same position until only a few years ago. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
8/ But unlike the U.S., Japan’s power emissions are rising thanks to the shutdown of its nuclear fleet, while emissions from industry, transport, and the commercial and residential sectors have been falling for nearly 20 years. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
9/ Japan's power generation emissions intensity—the amount of CO2 emitted for every unit of power generation—is also greater than that of other industrial, high-wage countries. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
10/ Japan's power fleet’s emissions intensity is more than 2X that of the U.K., and more 8X that of France. It's greater than the EU-27 average too. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
11/ Japan's companies with clean energy commitments are making serious efforts to obtain as much clean electricity as possible. But even these efforts run into fundamental challenges. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
12/ Challenge #1: onsite space. Companies can build on-site solar generation, but given their often-significant power demands and the finite nature of the space available, major companies are unlikely to be able to meet their own power demands in this way. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
13/ Analysis by @BloombergNEF indicates that companies will be able to generate less than 20% of their power demand from projects on-site. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
14/ The second challenge is even bigger in scope. Japan has ambitious plans to reach net-zero emissions across the entire economy in three decades. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
15/ That will mean electrifying sectors such as transport and industry that today use hydrocarbon fuels for most of their energy needs. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
16/ Those sectors will be competing with pure electricity consumers for clean power in a system where clean power demand already significantly exceeds supply. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
17/ (And if Japan phases out sales of new internal combustion engine cars by the mid-2030s, then there's even more electricity demand coming) https://www.bloomberg.com/news/articles/2020-12-03/japan-said-to-plan-phase-out-of-new-gasoline-cars-by-mid-2030s?sref=JMv1OWqN
18/ The only way to solve Japan Inc’s existential electricity challenge is to provide much more clean power—not three decades from now, right now. https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
19/ Sony’s warning that it may have to move its factories in search of clean power may provide Japan’s government with its own imperatives. Either it can reform its electricity sector and its land use, or it risks losing its prized global companies /END https://www.bloomberg.com/news/articles/2020-12-03/japan-had-better-find-some-clean-energy-or-risk-losing-its-biggest-businesses?sref=JMv1OWqN
