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Energy

Geothermal power in Japan set to heat up as government drills in

State agency to join exploration, easing risks for developers

Smoke rises from a mountain near Hokkaido's Kawayu hot spring resort. (Photo by Masahiro Shiroyama)

TOKYO -- Japan's government will play a greater role in developing the nation's geothermal power resources, seeking to lower the barrier for private-sector investment in this lagging area of renewable energy, Nikkei has learned.

State-owned resources agency Jogmec will conduct test bores -- part of the financially risky early phase of development -- on behalf of potential developers starting in the fiscal year from April 2020. 

The initiative could help unlock underground heat as an energy source in volcanic Japan, which ranks third in the world in geothermal resources, behind the U.S. and Indonesia, according to data from the Ministry of Economy, Trade and Industry. 

Until now, drilling into the ground to determine whether conditions are right for geothermal power has been left up to private developers. Test bore surveys take about two years and cost the equivalent of several million dollars with no guarantee of success.

State subsidies cover part of the cost, but the private sector has called for greater national involvement. Going from test bores to a working geothermal plant can take as long as a decade or more.

A bigger role by Jogmec and the industry ministry, which oversees it, could also help ease the regulatory burden associated with drilling.

Many of Japan's geothermal resources are thought to be located within national and local parks, where concerns about damaging the environment and hot springs hold back development. Approval for drilling requires coordinating with various levels of government, from local authorities to the Environment Ministry.

Geothermal energy, which is less weather-dependent than solar or wind power, forms a piece of Japan's goal of increasing electricity from renewable sources to between 22% and 24% of the total by fiscal 2030, up from 16% in fiscal 2017.

But development is lagging. The industry ministry is considering calls from the private sector to shorten environmental assessments, which can take about four years to complete.

Jogmec -- officially known as Japan Oil, Gas and Metals National Corp. -- envisions conducting test bores for about six years to give prospective developers more certainty on which to base business plans.

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