Japan Intensifies Geothermal Power Investment, Targeting 1.5 GW by 2030

Ambitious Goals for a Volcanic Nation

Japan is embarking on a significant expansion of its geothermal energy sector, with the government setting an ambitious target to increase installed capacity to 1.5 gigawatts (GW) by 2030. This represents a substantial leap from the approximately 576 megawatts (MW) recorded at the end of 2023. The initiative is a cornerstone of Japan's broader decarbonization strategy and aims to bolster energy independence.

Despite possessing the third-largest geothermal resource potential globally, estimated between 23 GW and 33.6 GW, Japan has historically underutilized this clean energy source. Geothermal power offers a stable, 24-hour electricity supply with minimal carbon emissions, making it a crucial component for achieving the nation's net-zero goals.

Government-Led Initiatives and Support

The Ministry of Economy, Trade, and Industry (METI) is spearheading a series of new support measures to accelerate geothermal development. Key among these is the expanded role of the Japan Organization for Metals and Energy Security (JOGMEC). Starting in fiscal year 2025, JOGMEC will extend its efforts beyond basic surveys to include confirming continuous steam flow, thereby reducing the significant exploration risks for private developers.

Further governmental efforts include:

• Establishing agreements between local administrative agencies, power companies, and residents to mitigate issues such as prolonged development cycles and local opposition.
• Incorporating these new measures into Japan's medium-term energy policy guidelines, expected to be drafted by the end of 2024.
• Launching a public-private council, involving over 70 companies, to accelerate the development of next-generation geothermal technologies, including closed-loop and supercritical geothermal systems.
• Allocating substantial budgets, such as $116 million (JPY 18.3 billion) in fiscal year 2022, for the discovery and development of new geothermal sources.
• Providing subsidies for information and education projects to foster greater understanding and acceptance among communities.
• Implementing deregulation in national parks since 2012, opening up more areas for potential development.
• Streamlining environmental assessment processes and supporting advanced drilling technologies to shorten the typical 15-year development period.

Overcoming Challenges and Local Concerns

Despite its immense potential, geothermal development in Japan faces several hurdles. A significant challenge stems from the fact that approximately 80% of the country's geothermal resources are located within national parks, which have historically been subject to strict regulations. Additionally, local communities, particularly those reliant on the traditional hot spring (onsen) industry, have expressed concerns about the potential impact of geothermal projects on their natural hot spring resources and tourism.

The high upfront costs and inherent risks associated with geothermal exploration and drilling also pose financial barriers for private companies. However, with government support and the exploration of advanced technologies like closed-loop systems, which do not require an underground reservoir of hot water or steam, the industry aims to mitigate these risks and expand viable development locations.

Future Outlook and Technological Leadership

Japan is not only investing in domestic development but also leveraging its technological expertise. Japanese companies hold a significant global share, approximately 70%, in conventional geothermal turbines. The focus on next-generation technologies, such as closed-loop and supercritical geothermal systems, is expected to unlock even greater potential, potentially increasing the country's exploitable geothermal capacity to at least 77 GW, compared to the 23.5 GW based on conventional methods.

This renewed commitment to geothermal energy underscores Japan's determination to diversify its energy mix, reduce reliance on fossil fuels, and achieve its ambitious climate targets, positioning itself as a leader in sustainable energy innovation.