Japan's Power Market News 2024/W42

Japan to Expand Geothermal Development With Increased Government Role in Exploration Phase

The Japanese government plans to include measures to promote #geothermal energy in an update to its Basic Energy Plan, to be carried out by the end of the financial year. The new plan aims to expand the role of the Japan Organization for Metals and Energy Security (JOGMEC) in resource exploration, starting in FY2025. Currently, JOGMEC conducts basic underground structure surveys and simple drilling, and shares the results with potential developers. Moving forward, they will extend their efforts to include confirming continuous steam flow, which will help to reduce the risks for private operators.

The government's initiative aims to allow private companies to focus on other aspects of the business by reducing the risks in the initial stages. Geothermal energy, which provides stable, 24-hour power without #CO2 emissions, is seen as a key clean energy source for Japan, which has the world's third-largest geothermal resource potential due to its volcanic geology.

Challenges Facing Geothermal Energy Expansion in Japan

Geothermal development requires drilling multiple wells to locate viable resources, and success rates are not high. Operators also face challenges, such as environmental impact assessments, coordination with local communities, and obtaining various permits. Constructing large facilities can cost tens of billions of yen, and it typically takes about five years to confirm steam flow, and around 15 years to reach commercial operation.

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