Market Overview

The capacity of hydroelectric power is estimated to reach 50.3 gigawatts (GW) by FY2024.
Since Japan has not developed new large-scale hydropower plants, the capacity-based market does not fluctuate greatly. However, the capacity is on an increase as medium-sized and small plants are being newly built or drastically refurbished using the Feed-in Tariff (FIT) program.
Additionally, since many hydropower plants in Japan have the history of more than 60 years of operation, repowering has been implemented to improve existing hydropower output and compensate for decreased power generation efficiency stemming from facility deterioration.

Noteworthy Topics

Factors Increasing Hydropower Capacity

Currently, small- to medium-sized hydropower plants are being developed in locations where business feasibility is ensured.
Existing hydropower plants, regardless of scale, whose facilities deteriorated due to long operating history, are undergoing repowering by upgrading or replacing of equipment and facilities into higher-performance ones. These upgrades increase capacity by improved output and power generation efficiency.

Future Outlook

Domestic hydropower capacity is forecast to reach 50.5 GW by FY2030.

The number of small hydropower plants certified under the Feed-in Tariff (FIT) program with higher power purchase prices is expected to increase, though not significantly, due to a decrease in suitable locations for new plants.
As for repowering, since the FIT program was changed to the Feed-in Premium (FIP) scheme in April 2022, investments intended for medium-sized hydropower plants are expected to be used for refurbishing large hydropower plants instead.
For these reasons, the capacity of hydroelectric power plants in Japan is not expected to increase significantly, but rather slightly, as companies maintain their existing plants and output at the level to secure their business profitability. Additionally, pumped-storage hydroelectricity will likely be used more due to its potential role to balance the supply and demand of renewable energy.

Research Outline