Thousands of natural hot springs (or onsen) dot Japan's countryside, providing a haven for relaxation and contemplation for millions of people. For thousands of years, they have been an important part of the historical and social fabric of the country, and they are represented everywhere from famous ukioy-e woodblock prints from the 18th century to contemporary sitcoms.
Today, however, they have the potential to be an important part of the transformation of Japan's energy sector, with a power output equivalent to 23 gigawatts (GW) lying beneath the surface in the form of geothermal energy, the world's third-largest store. The world's installed capacity for geothermal power was 12.9 gigawatts (GW) in 2017, with a levelised cost of electricity (LCOE) for recent projects ranging from USD 0.04 to around USD 0.13 per kilowatt-hour.
Geothermal power plants are not new to Japan. The first geothermal plant in the country opened in 1924 in Bepphu, with the steam also being used to heat houses and cook food in restaurants. However, it wasn't until 1952 when Japan's first commercial geothermal power station opened, in the city of Hachimantai in northern Japan. Built by Japan Metal & Chemicals and with turbines by Toshiba, the plant originally provided about 9.5 MW of power, about 40% of its output today, with the residual hot water used for agricultural applications.
Today, Toshiba is the world's largest supplier of geothermal turbines, followed by Mitsubishi and Fuji, also Japanese companies. Japan is also one of the world's largest developers of geothermal projects outside of the country. In Indonesia, Japanese companies are currently financing and building the Sarulla plant, whose output once completed will be 320 MW, the world's largest. Japanese companies also support Kenya's geothermal-powered energy transformation, providing turbines, supplying equipment, and constructing mega-projects like the 158 MW Olkaria V steam power plant in Naivasha.
But despite Japan's technical and construction preeminence and its significant energy potential, there are only around twenty geothermal plants in Japan, with a total output capacity of around 535 MW, only 0.3% of the country's total electricity generation. High upfront costs and rigorous regulatory processes are some of the reasons that the Wasabizawa plant, currently under construction in Akita prefecture, is the first large-scale geothermal project in about 20 years.
However, in the wake of the Fukushima nuclear disaster the Japanese government introduced new policies to accelerate geothermal power plant deployment. These included streamlined procedures for the approval of projects in national parks and, crucially, a new higher feed-in tariff (FIT) for small geothermal plants to more than one-and-a-half times of that of larger facilities. This made it profitable to build plants with an output below 7.5 MW, which do not require environmental impact assessments and can be built in around half the time of larger plants.
These policies have not been unopposed. More than half of the geothermal sources are located around national parks or near the country's 27,000 thermal springs that onsen rely on for their hot water supply. Critics believe that geothermal projects will adversely affect water supply or quality, or that the plants will have a detrimental impact on hot spring resorts or national parks.
As a result, an important role of the small-scale geothermal plants built since 2012 has been to work closely with onsen operators, hotels and inns to prove that small-scale geothermal power generation can coexist with tourism facilities, without negatively impacting Japan's natural beauty.
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