As Japan continues to bounce back from the Fukushima nuclear disaster in 2011, it has focused on renewable energy to lessen its reliance on nuclear and carbon-heavy fossil fuels. In just two years, Japan installed more than 11 gigawatts (GW) of renewables, thanks in part to a generous feed-in tariff (FIT) program established in 2012. While most of that development has been centered on solar, Japan has recently turned toward its abundant reserves of geothermal energy, with the Ministry of Economy, Trade and Industry (METI) expecting 380 to 850 MW of new installed geothermal capacity by 2030.



The 9.5-MW Matsukawa Geothermal Power Station, built in 1966, was one of the first geothermal plants in Japan. Credit: Wikipedia.

A Baseload Dilemma

When Japan shut down its nuclear capacity more than 29 percent of its baseload power capacity was turned off. As a result, many regions have dealt with scheduled blackouts.

According to a recent report from Japan’s Liberal Democratic Party (LDP), the country must increase homegrown energy, rather than rely on fossil-fuel imports. The report calls for 25 percent more baseload power, which is music to the geothermal industry’s ears: the industry has long touted its baseload resource benefits.

Home to more than 100 active volcanoes, Japan holds the third largest reserve of geothermal potential in the word at more than 23 GW. Despite this huge potential, there was less than 540 MW of installed capacity before the 2011 accident. This lag may soon see an uptick.

Policy Change

Geothermal development in Japan faced several barriers before the Fukushima accident, according to Kasumi Yasukawa of the National Institute of Advanced Industrial Science and Technology (AIST). One major obstacle was due to, of all things, environmental considerations.

Nearly 80 percent of Japan’s geothermal resources are located within national parks or protected hot springs, areas designated as restricted “zones” with limits on the type and location of work that can be done in them. Japan set a moratorium on geothermal production within these parks, with heavy restrictions even on light research.

In 2012, the Ministry of the Environment relaxed the rules for each zone, known as ordinary, special protection (SP) or special class 1, 2 or 3 (S1, S2, or S3). In the past, surface surveys and small-scale development was only allowed in ordinary zones. Now, however, survey work is allowed in SP and S1 zones; small-scale development is allowed in S2 and S3 zones and large-scale development is allowed in ordinary zones.

“Keeping a balance between geothermal power and national parks has been a very big issue,” said environment minister Goshi Hosono during a press conference when the new rules were released. “We plan to develop geothermal power in earnest as the importance of renewable energy is increasing.”

In 2012, the government also increased funding for geothermal exploratory drilling from $15 million to $90 million, according to AIST’s Yasukawa. Exploratory drilling is considered the most costly and risky aspect of a project and usually a deterrent for many developers. It accounts for about 50 percent of geothermal costs. In addition to this funding, Japan set 15-year feed-in tariff (FIT) prices for geothermal projects at 27.3 yen/kWh [US $0.23/kWh] for projects 15 MW or larger, and 42 yen/kWh [US $0.35/kWh] for projects less than 15 MW.

Increased Interest

These measures have brought new interest in geothermal development, leading to the inception of the Japan Geothermal Association (JGA), which today provides support for more than 50 companies that are stakeholders in the industry. Over the past year, several companies have announced that they are starting exploratory research.

Tokyo-based financial services company Orix announced in late 2014 that it plans to build as many as 15 geothermal plants within the next five years. The company plans to expedite this initiative by building smaller scale plants of around 2 MW in capacity in order to avoid costly and lengthy environmental assessments that plants larger than 7 MW must undergo. Orix also helped develop the 2-MW Kumamoto geothermal plant built by Chuo Electric Power in 2014. It was Japan’s first 1-MW+ geothermal project to go online in 15 years. Chuo also plans to build five more small-scale plants in the next five years.

Other companies are working to improve the few established geothermal plants in Japan. For example, Idemitsu Kosan Co. announced in March that it would build a 5-MW binary project near an existing 27.5-MW plant in southern Japan. Binary plants are able to take advantage of lower-temp resources, and are often used to enhance production at existing plants. Idemitsu plans for the plant to be commissioned in 2017.

In addition to these small-scale developments, METI said that exploratory operations are taking place in more than 40 locations across Japan, signaling an exciting time for the geothermal industry.