Government unveils new plan to strengthen energy supply-demand structure: promotes electrification in manufacturing
On August 26, the Government presented a policy package aimed at strengthening the energy supply-demand structure in response to instability in the Middle East at the GX (Green Transformation) Implementation Council, chaired by Prime Minister Sanae Takaichi.
Drawing on the lessons learned from the blockade of the Strait of Hormuz following the military conflict between the United States and Iran, a new set of energy policy proposals was compiled under the name “Power GX” (Green Transformation).
In the near term, the Government will fundamentally strengthen the security and stability of fossil fuel procurement. Over the medium to long term, it will expand the deployment of domestically produced energy through GX initiatives, reduce its reliance on fossil fuels, and strengthen energy security. To enhance the resilience of energy and resource supplies, the Government will cooperate with Asian countries through a partnership known as “Power Asia” on crude oil stockpiling and GX initiatives.
Regarding crude oil, the Government will help cover the higher transportation costs incurred by businesses that procure crude oil without passing through the Strait of Hormuz. The Government will also support, through private-sector businesses, pipelines to the Red Sea that Middle Eastern countries plan to build to bypass the Strait of Hormuz. It aims to submit to the Diet a related bill to amend the JOGMEC Act. The Government is also considering developing a legal framework to support insurance for crude oil tankers.
As a key priority among its GX-related measures, the Government reiterated its commitment to maximizing the use of nuclear power and reaffirmed its target of rebuilding approximately two to five reactors by the 2040s, bringing the cumulative total to approximately 11 to 14 by the 2050s.
The Government will promote the deployment of renewable energy on the premise of coexistence with local communities. It will build a domestic industrial base around perovskite solar cells, next-generation geothermal energy, and offshore wind power. Natural gas-fired power generation has also been incorporated into the GX policy framework.
Amid growing global demand and increasingly longer lead times from manufacturers, the government will encourage investment in production facilities. On the demand side, it will promote energy efficiency in data centers through the adoption of photonic-electronic convergence technology and energy-efficient semiconductors. It will also advance the electrification of manufacturing.