2023: Summary of the Year Across Key Energy Sectors

December 26, 2023|Year In Review

In comparison with the energy crisis and associated turbulence of 2022, this year has been about preparation for the future for most major energy sectors. As one industry insider joked, everyone’s favorite word this year was “MoU”. Likewise, “pilot”, “test”, “explore”, “consider” and “study” filled almost every issue of Japan NRG, reflecting the preparatory phase of technologies such as CCS, hydrogen and ammonia fuels, SAF, and Perovskite solar cells (PSC).

More advanced energy sources, such as batteries and biofuels, made greater advances, though also at a cautious pace. The renewables complex in general had a tough time in Japan as solar’s breakneck rollout over the past decade noticeably slowed, partly due to land and cost issues, as well as a more complex regulatory and fiscal environment. Wind power saw a slew of major onshore projects canceled over community opposition, but Japan finally took big steps forward in developing offshore resources.

The lull in the ideological debates over the meaning and means of the energy transition helped fossil fuels recover policy and investor interest, especially in natural gas and LNG. But the net-zero battle lines will be drawn anew in 2024 as METI begins updating the Basic (Strategic) Energy Plan. All stakeholders will be keen to see their imprint in the national vision for 2030 (or will this now be 2035…?).

More than vision, however, most of the energy sectors will be looking for investment, and 2024 is expected to deliver on a lot of large-scale commitments that will carry Japan’s energy sector to the end of this decade and beyond. Developers and end users involved with hydrogen and ammonia in particular have great expectations for funding from the government and private sources. But significant financing is also expected in the battery storage / BESS space, in carbon capture, and of course in (floating) offshore wind. The government’s maiden GX Economic Transition bonds should open the floodgates to a much broader wave of capital-raising by both startups and blue chips.

Below we look back at some of 2023’s key events in the major energy sectors.

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