RECAI: Country focus


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New year, old debate. After a colossal 18 months for Japan’s renewable energy sector, a downgrading of its carbon emissions reduction ambitions, and signs that nuclear is back on the agenda might leave the sector wondering what 2014 has in store. The nuclear debate never really went away, but the increasing trade-off between pollution, cost and public opinion has reignited Government focus on the future of Japan’s energy mix. Will this throw renewables off track, or reinforce support?

Back in the mix. Draft proposals released by the Ministry of Economy, Trade and Industry (METI) in early December stated that, although dependency on nuclear should be reduced as much as possible, it will continue to be an important base-load power source, subject to a series of safety measures. It’s a far cry from the previous administration’s call to phase out nuclear completely by 2030, which had secured significant public support.

Causing conflicts. Unfortunately, the nuclear gap has also pushed energy prices up and increased carbon emissions, sparking a debate on whether the short-term pain is worth the long-term gain once renewable energy deployment is sufficient to displace the majority of fossil fuel imports. Japan’s average electricity cost for industrial users of US$179/MWh is more than double the US’, and a third higher than the UK’s. The instant boost to energy security and reduced carbon emissions from a return to nuclear would also potentially weaken the imperative for large-scale renewables deployment.

Carbon comedown. A revised carbon emissions reduction target announced in mid-November also caused concern. It calls for Japan to cut emissions by 3.8% by 2020 compared with 2005 levels, while its 2009 commitment aimed to reduce emissions 25% by 2020 from 1990 levels. Calculations by BNEF, taking into account a rise in actual emissions, suggest this is equivalent to a 3.1% increase in emissions on the original 1990 baseline.

Solar bubble. While these decisions muddy Japan’s long-term energy strategy, there is no escaping its strong push on renewables deployment, with solar in particular seeing tremendous growth. Figures at the end of October 2013 show that, since implementing its FIT program in July 2012, Japan has approved over 26.2GW of clean energy programs and added close to 7GW of capacity, with solar representing over 90% of the pipeline. In November, a consortium of seven Japanese companies opened the 70MW Kagoshima Nanatsujima solar plant, by far Japan‘s largest.

Change of wind direction. There are signs that Japan’s overwhelming focus on solar over the last 12–18 months, though welcome, may be about to shift towards an increased focus on wind.

Finding the right FIT. As well as pursuing an ambitious goal of 1GW by 2020, the Government is also considering increasing the FIT awarded to offshore projects to recognize higher capital costs. Currently, both onshore and offshore projects enjoy the same FIT of JPY23.1/kWh (US$0.232) over 20 years, but in late 2013, the Government asked a panel of experts to model a range of scenarios to determine an appropriate tariff. A higher FIT in 2014 would significantly spur development in an already expanding sector.

Also in this article:

  • Filling the gap
  • FIT on the block
  • Struggling to cope
  • Making progress
  • Monopoly reform
  • Getting a head start

Read full article (pdf, 1.9MB)

Local office contacts:

   Kunihiko Taniyama

   Kenji Sawami