better generation

The Coalition Government announced this week that they plan to cut the Feed In Tariff (FIT) for solar PV, beginning next year. The decision came about due to the recent exploitation of the generous FIT rates for small scale solar. The scheme originally aimed at making PV more financially viable for domestic, farming, and small scale business ventures, but the high tariff had encouraged larger schemes, that focused solely on selling the electricity back to the grid for profit. This comes just days before Japan announced the introduction of its first FIT.

 

In terms of energy production, Japan recently found itself in a difficult position.

From the perspectives of mitigating global warming, ensuring energy security (Japan's current energy self-sufficiency rate is only 4%), and strengthening its competitiveness in energy-related fields, Japan needs to drastically increase its renewable energy capacity.

 

 

 

 

 (Fukushima Nuclear Power Plant)

 

The earthquake in March 2011, and the following accident at the Fukushima Daiichi nuclear power plant have added further urgency to the need for increasing the use of renewable energy. Coincidentally, on the morning of the earthquake, a proposed law on renewable energy was approved by a Cabinet meeting. This law included provisions for a FIT scheme to promote renewable energy in the country. Commencing on July 1, 2012, the FIT will cover a variety of energy generation methods, including PV, wind, hydro (less than 30 kW), geothermal and biomass.

 

Under this law, electric utilities are obliged to purchase electricity generated from renewable energy sources at a certain price during a certain period of time, when prescribed by the national government. Electric utilities are, in turn, permitted to require each customer to pay a surcharge for electricity use according to the amount they use. The law also provides for the implementation of necessary measures to prevent regional imbalances in the amount of surcharges levied.

 

The new FIT has already sparked an interest from larger investors, such as Rakuten Inc., one of Japan's major internet shopping site operators, who is planning to provide loans and other financial services in addition to installation services. Japan's leading mobile carrier is also considering developing a scheme to install solar panels and wind power generation systems on their base-station steel towers, which currently number about 90,000 nationwide, and to sell the excess electricity generated on these towers.

 

There are some issues to consider regarding this FIT program. One such issue is the provision that allows electric utilities to refuse to purchase electricity. Measures should be included to ensure that the electric utilities do not take advantage of this provision as an excuse to refuse to support the expansion of renewable energy. The purchase price and other conditions also need to be determined to ensure and enhance its effectiveness.

 

Furthermore, the power transmission network needs to be adequately upgraded and expanded because power generation plant sites are located far away from power consuming areas. On top of this, currently in Japan, two different frequencies are used; 50 Hertz (Hz) in the east, around Tokyo, and 60 Hz in the west, around Osaka. Using these two different frequencies makes it difficult to flexibly transfer electric power between the eastern and western areas. This is considered a major limiting factor regarding the wider use of renewable energy in Japan.

 

Since the FIT scheme was first discussed, more progress has been seen in the construction of wind power turbines and test demonstrations of offshore wind power generation systems. New plans to construct geothermal power plants have also begun rolling for the first time in several decades; although Japan has the world's third largest geothermal generation potential, its actual generation volume ranks eighth worldwide. The decision to introduce a FIT scheme is a big step towards the wider use of renewable energy in Japan. The legal framework itself, however, needs to be solid for a successful scheme.