What Japan Can Teach Us About Energy Security

The Kashiwazaki-Kariwa nuclear power station in Niigata, Japan is the world’s largest nuclear energy producer, with an output of roughly 8,000 megawatts. (YUICHI YAMAZAKI / AFP / Getty Images)

About the author: Ben Cahill is Director for Energy Markets and Policy at the Center for Energy and Environmental Systems Analysis, University of Texas at Austin.

Most Americans take energy security for granted. We simply expect that electricity, gasoline, and jet fuel will always be available, and give little thought to the infrastructure and planning required to send power and fuels where they are needed. Thanks to resource abundance and low costs, Americans consume more energy per capita than nearly all other countries.

Resource-poor countries, such as Japan, must think harder about their energy security.

The word “pragmatism” has become a cliché in energy policy circles, but it applies to Japan, an island nation with almost no domestic oil, gas, or coal resources. The country’s greenhouse gas reduction target is more realistic than the European Union’s likely unobtainable goal, and its sober planning contrasts with Washington’s wild pendulum swings between climate ambition and fossil fuel triumphalism. This approach might seem overly cautious, especially when considering the urgency of climate change. But Japan’s dependence on imported energy raises the stakes of getting the energy transition right.

Japan began easing its reliance on imported fossil fuels in the 1960s by investing in nuclear energy. Its first commercial-scale nuclear reactor started in 1966; by 2011, it had one of the world’s largest nuclear energy industries, with 54 commercial reactors in operation. But the Tōhoku earthquake and Fukushima Daiichi disaster that year nearly shut down the nuclear energy fleet. After those disasters, Japan was forced to import record amounts of liquefied natural gas.

Created with Highcharts 9.0.1Japan’s Nuclear Energy Production Hasn’t RecoveredJapan’s electricity generation by source, in terawatt hoursSource: International Energy Agency

Created with Highcharts 9.0.1CoalOilNatural GasNuclearHydroWindSolar'05'10'15'202000020040060080010001200

In more recent years, Japan has also had to navigate the global gas price shock following Russia’s war on Ukraine. This has required some big adjustments. Japan set more aggressive renewable energy targets, with strong incentives for solar energy. More recently, Japan has offered support for lower-carbon fuels, such as hydrogen and ammonia.

Every few years, the government reassesses progress. It creates a strategic energy plan, outlining targets that set the direction for utilities, trading houses, and banks.

Its seventh plan, approved in February, is grounded in reality. In it, policymakers acknowledge that geopolitical risks, external shocks, and the rise of electricity-hungry data centers create new uncertainties that may complicate the country’s energy transition.

The plan aims to cut greenhouse gas emissions by 73% from 2013 levels by the year 2040 and reach net-zero emissions by 2050 by maximizing renewable and nuclear energy. To reach its 2040 target, Japan will need to install 10 gigawatts a year of solar capacity and 3 to 4 GW of offshore wind capacity. That is well ahead of its current pace of solar deployment. It also plans to phase out “less efficient coal” and rely on carbon capture, utilization, and storage, and potentially hydrogen to decarbonize power generation.

Still, the plan is the first of its kind to include a “risk scenario” that features a slower decarbonization progress. Policymakers assume Japan will use less electricity by 2030, thanks to a declining population and greater energy efficiency. But, the plan notes, public resistance to nuclear energy restarts, obstacles to renewable energy deployment, or uncompetitive costs for hydrogen supplies could actually increase Japan’s dependence on gas.

In this scenario, Japan would need to sign some 20 million tons in new long-term liquefied natural gas contracts to meet its energy demand in 2040. The plan also suggests that industrial policy geared toward competitiveness in AI, semiconductor manufacturing, and related industries could increase Japan’s power demand. So Tokyo is reluctant to phase out thermal power generation too quickly.

Created with Highcharts 9.0.1Japan Plans Its Pivot to Cleaner EnergyIts future will be less reliant on thermal energy.Share of electricity generationSource: Japan’s Ministry of Economy, Trade, and Industry

Created with Highcharts 9.0.1RenewableNuclearThermalFiscal year 20226th Plan (fiscal year 2030)7th Plan (fiscal year 2040)020406080100%

As U.S. policymakers contemplate how to meet booming domestic energy demand from AI, industry, and households, they would be wise to look toward Japan. They should carefully consider the role of various energy sources, instead of dismissing some out of hand. Policy stability matters, especially in the early-stage development of new energy sources and technologies.

And some humility is in order—as well as backup plans—to adjust to unforeseeable but inevitable shocks. The U.S. is an energy superpower with abundant resources, but its energy security planning often falls short. Perhaps it should steal a page or two from Japan’s playbook.

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