The economic upturn after World War II was largely fueled by the primary energy source coal that was mainly produced domestically. While the need for energy, especially in the Japanese iron and steel industry, was growing stronger, there was a shift towards the cheaper oil. Having exhausted its small oil reserves quickly, the resource was extensively imported from overseas, predominantly from the Middle East. The dependency on imported fossil fuels, however, created economic and diplomatic vulnerabilities. The oil crisis of the 1970s, for example, affected the Japanese economy severely, leading to energy security being a central concern for the Japanese ever since.
Efforts to secure the resource supply consisted of diversifying the energy mix by promoting nuclear power and renewable energy. Supported by the government, the former expanded strongly in the 1970s and 80s, reaching an almost 30 percent share of the total electricity output in Japan. Fukushima Daiichi nuclear disaster in 2011, however, put an end to the rise in nuclear power and was another setback in Japan’s energy policy. Having to switch off all domestic nuclear reactors, the country was once again forced to import larger amounts of oil and gas. The energy self-sufficiency ratio fell from around 20 percent in 2010 to six percent in 2014.
Besides energy security, environment is another major issue Japan has to deal with. In order to meet the 2015 Paris climate agreement goals, the government has put an emphasis on renewables courting private investments in the sector. Consequently, the share of renewable energy in primary energy supply close to doubled from around 4.6 percent in fiscal year 2015 to approximately 8.7 percent in fiscal 2018. The generating capacity of renewables in the country rose alongside, with solar power accounting for the largest share. However, the large-scale installation of solar panels requires deforestation that has recently provoked criticism, questioning the environmental sustainability of solar power projects, proving once more the hardship and the ongoing actuality of the Japanese challenge to manage the balancing act of securing energy and reducing emissions.