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Renewable energy

Solar Japan: Japan approves a full Germany worth of renewable energy in a single month

Solar Japan: some of the world’s most attractive feed-in-tariffs

In the single month of March 2014 Japan approved almost as much renewable energy projects as all solar ever installed in Germany

Japan’s ten regional electricity monopoly operators traditionally kept renewable energy below 1% following an unwritten rule. Tokyo Electric Power Company (TEPCO) kept renewable well below this magic 1% limit – until recently TEPCO’s renewable energy ratio was about 0.05%, slightly “greener” than Kansai, and Shikoku Electrical Power Companies with 0.03% renewables, and Chugoku Electrical Power Company with 0.02% of renewables in their energy mix.

Complete reversal of Japan’s previous “no renewables” strategy

Switching off all nuclear power stations combined with extremely high natural gas (LNG) prices forced change of this “no renewables” strategy in Japan, and Japan quickly moved in the opposite direction with some of the highest feed-in-tariffs globally, about three times higher than in Germany. (To understand the details of LNG costs and prices for Japan, read our Japan Energy Report, where you’ll find month-by-month data of Japan’s coal and gas payments, as well as the price developments and the reasons for the extraordinarily high prices Japan pays for LNG and LPG).

solar japan : Driven by high LNG costs Japan approves almost as much solar energy projects in a single month as ever installed in Germany
Driven by high LNG costs Japan approves almost as much solar energy projects in a single month as ever installed in Germany

Solar plants ever installed in Germany total about 36.5 GigaWatt – Japan almost approved as much renewables in the single month of March 2014

Germany’s Federal Network Agency (Bundesnetzagentur) published detailed data of solar energy projects installed and approved for subsidy in Germany. As of May 31, 2014, all solar power ever installed and approved for subsidy in Germany amounts to 36.5 GigaWatt (peak). The figure above shows that Japan’s Industry Ministry METI approved about 26.7 GigaWatt of solar projects under the feed-in-tariff program during the single month of March 2014 alone.

Here are the actual figures of renewable electrical power projects approved by METI under the FIT program during the single month of March 2014 alone:

solar projects less than 10kW: 159,070kW = 0.16GW
solar projects over 10kW: 26,521,483kW = 26.5GW
Subtotal solar (all sizes): 26,680,553kW = 26.7GW
Total all types of renewable energy: 27,436,598kW = 27.4GW

The figure also shows that March 2014 is somewhat an anomaly – because feed-in-tariffs are reduced each year on April 1 at the beginning of the new financial year, METI cooperates with applicants to approve large numbers of applications during the last month of the previous tariff. Thus renewable project applications in Japan have developed an annual rhythm.

“Renewable energy Japan” research report

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Electricity Japan's energy sector Renewable energy

Feed in tariff Japan for renewable energy: approvals drying up?

Feed in tariff Japan for renewable energy are about three times higher than in Germany

Approvals peaked just before the latest feed in tariff reduction

The figures below show an overview of renewable energy sources currently installed and operational in Japan (the majority of which is water power), and also renewable energy projects approved by Japan’s industry ministry METI under the renewable energy feed-in-tariff (FIT) law, which started in July 2012.

Approvals peaked just before March 31, 2013

The figures below clearly show that approvals peaked in March 2013, and dropped off dramatically from April 2013. The reason is most likely the decrease of FIT-tariffs from April 1, 2013: it seems that many applications were rushed in order to take advantage of the higher FIT-tariffs for projects approved up and until March 31, 2013.

Renewable energy capacity approved so far under the FIT-law will increase renewable energy capacity in Japan approximately by 70%, including water power. 94% of renewable energy projects approved under Japan’s feed-in-tariff programs are for solar energy generation (see our past blog analyzing FIT approvals).

The figures below show, that almost no fresh generation capacity was approved during March, April and May 2013: the approval of new renewable energy capacity is drying up.

Thus, companies seeking to build solar power stations in Japan based on pref-approved METI-projects, are faced with a fixed pool of approved projects, with almost no additional projects being added until May 2013.

More details in the latest 6th edition of our Renewable Energy Report.

Feed in tariff Japan for renewable energy: Approvals for renewable energy projects under the feed-in tariff law until May 2013 in comparison with installed renewable energy in Japan
Accumulated total generation capacity of approvals for renewable energy projects under the feed-in tariff law until May 2013 in comparison with installed renewable energy in Japan. Approvals seem to have dried up: almost no new capacity has been approved during March-May 2013.
Feed in tariff Japan for renewable energy: Figure shows solar energy projects approved by Japan's Industry Ministry METI under the renewable energy FIT law.
Figure shows the accumulated generation capacity of solar energy projects approved by Japan’s Industry Ministry METI under the renewable energy FIT law. Approvals seem to have dried up: almost no new capacity has been approved during March-May 2013.
Feed in tariff Japan for renewable energy: Approvals under Japan's renewable energy feed-in-tariff law per month
Approvals under Japan’s renewable energy feed-in-tariff law per month. Figure shows that approved generation capacity drops to a low level after March 2013 – the most likely explanation for the dramatic drop of approvals after March 2013 is the reduction of FIT-tariffs from April 1, 2013: it looks likely that many applications were rushed to meet with the higher FIT tariffs available for projects granted at the higher rates up to March 31, 2013 (42 yen/kWh in case of large scale solar)

“Renewable energy Japan” research report

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Electricity Japan's energy sector Natural Gas, LNG Renewable energy

Japan energy – myths versus reality, mantra versus smart

A lecture a the Embassy of Sweden for the Stockholm School of Economics

European Institute for Japanese Studies EIJS

Gerhard Fasol "Japan energy - myths versus reality, mantra versus smart" Embassy of Sweden
Gerhard Fasol “Japan energy – myths versus reality, mantra versus smart” Embassy of Sweden

Outline of the lecture:

  • Energy and DNA
  • Energy and Physics, why you need to understand physics to understand energy
  • Ludwig Boltzmann’s tools and laws to work with energy
  • Myth versus reality, mantra versus smart – psychology of judgment and decision making
  • Parliamentary commission results: “regulatory capture” caused the Fukushima nuclear accident
  • History: Japan’s energy architecture frozen since 1952
  • Primary energy: 96% imported
  • Why Japan pays so much for LNG
  • Electricity architecture and liberalization
  • renewable energy
  • Future: where do we go from here?

Thank you to all those who attended the event “Japan’s energy – myths vs reality” at the Embassy of Sweden – an event organized by the European Institute for Japanese Studies of the Stockholm School of Economics.

We had about 120 registrations for 100 seats in the Alfred Nobel Auditorium of the Embassy of Sweden – participants included an official from Japan’s Prime Minister’s Cabinet Office, Officials from several Embassies including the Swedish, US, Norwegian, Swiss, Hungarian and more Embassy, executives from Japanese and European telecom and energy companies, including also several independent power producers (IPPs), legal professionals, and groups of students and MBA students from Tokyo University, Hitotsubashi University and others.

We had very vivid discussion, and continued the discussions over nijikai.

Detailed data, statistics and analysis of Japan’s energy markets:

All the data of the talk are from our reports on Japan’s energy sector:

Japan’s energy market report:

Renewable energy Japan – research report

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

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Renewable energy

94% of renewable energy projects approved under Japan’s feed-in-tariff programs are for solar energy generation

Japan’s feed in tariff for renewable energy

Almost all projects are for solar energy

Feed-in-tariffs for renewable energy where introduced in two stages in Japan. Large scale introduction of feed-in-tariffs (FIT) started with the Law entitled “Special measures concerning renewable energy electric power procurement by operators of electrical utilities law” which came into force on July 1, 2012. However, subsidies and feed-in-tariffs were already in place earlier for residential solar (mostly on roof-tops of private homes). Projects approved under the FIT program of July 1, 2012 amount to an increase of 41% in nominal renewable electrical generation capacity. Feed-in-tariffs however are not the whole story, because there are also programs for financial support, special finance arrangements, and tax benefits, and other support programs.

Renewable energy projects approved under Japan's feed-in-tariff program increased renewable energy generation capacity by 41.4% sofar
Renewable energy projects approved under Japan’s feed-in-tariff program increased renewable energy generation capacity by 41.4% sofar. source: https://www.eurotechnology.com/store/j_renewable/

Under the law feed-in-tariffs are periodically reviewed and adjusted. In fact, feed-in-tariffs for solar energy have already been reduced by about 10% this year and are likely to be decreased further next year. For some types of feed-in-tariffs however, increases are under discussions – thus the FIT-tariffs for off-shore wind maybe increased in the future.

Since feed-in-tariffs for solar are set for a period of 20 years, and are decreased periodically, there is great incentive to start solar installations as early as possible, in fact some Mega-Solar plants were switched on on July 1, 2012 to use every possible day. Currently there is a rush of solar operators starting up and expanding in Japan – exactly the effect the Government had intended by setting high feed-in-tariffs.

Project approvals under Japan's feed-in-tariff program for renewable energy are 93.8% for solar plants
Project approvals under Japan’s feed-in-tariff program for renewable energy are 93.8% for solar plants. Source: https://www.eurotechnology.com/store/j_renewable/

The renewable energy mix approved under the FIT program is very different to Japan’s traditional renewable energy mix, which was predominantly large scale water power plants

Prior to the introduction of feed-in-tariffs, renewable energy in Japan was predominantly large scale (greater than 1 MegaWatt) water power
Prior to the introduction of feed-in-tariffs, renewable energy in Japan was predominantly large scale (greater than 1 MegaWatt) water power. source: https://www.eurotechnology.com/store/j_renewable/

Renewable energy Japan report

detailed statistical data for installed renewable capacity and electricity generation and analysis

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

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Renewable energy

Japan ought to be heaven for renewable energy (The Economist)

Industry Ministry METI announces renewable energy sources admitted to the feed-in-tariff program

Reversing the decline of renewable energy in Japan

A few days ago Japan’s industry ministry METI announced the most recent data on renewable energy sources in Japan admitted under the feed-in-tariff (FIT) regulations introduced on July 1, 2012. We have updated our report on “Renewable energy in Japan” to take account of these most recent data – read a short summary in this newsletter below.

Read an article on Japan’s electricity sector in The Economist here, where we helped a little.

Japan added 23% to renewable electricity generation since introduction of FIT
Japan added 23% to renewable electricity generation since introduction of FIT

Feed-In-Tariffs for renewables reverse Japan’s trend of decreasing contributions from renewable energy sources

As our previous newsletter of March 26, 2013 has shown (and as shown in more detail in our renewable energy report), the contribution of renewable energy sources to Japan’s energy mix has dropped from around 25% in the 1970s to around 10% recently.

Since the introduction of the feed-in-tariffs of July 2012, the installed capacity for renewable electricity generation in Japan has increased by about 23% if hydropower is included, and by about 70% if hydropower is excluded.

Since solar plants are quickest to install, and the permission process is by far the easiest, about 91% of renewable electricity installations permitted under the FIT program by METI are for solar electricity, while only 9% are for other sources such as wind or bio-mass.

Wind, hydro and geo-thermal installations require a lengthy planning, permission, environmental impact process, and far longer construction phase, so that the impact of the FIT program will be seen only in a few years time.

126% were added to Japan's solar electrical generation capacity since July 2012
126% were added to Japan’s solar electrical generation capacity since July 2012

Solar electricity generation capacity more than doubled due to FIT

Solar electricity generation capacity increased by 126% since July 2012 due to the introduction of new feed-in-tariffs and other regulations promoting solar energy. Note that previous to July 2012, about 83% of Japan’s solar electricity generation capacity was residential, while only 17% were industrial solar installations.

Renewable energy Japan – research report

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Renewable energy

Japan to reverse decline of renewable energy – Renewables declined from 25% to 10%

Japan’s renewable energy generation is overwhelmingly water power

Japan to reverse decline of renewable energy. The ratio of renewable power generation has decreased from 25% of total electricity generation in 1970 to 10% today. Extremely aggressive feed-in tariffs (FIT) for renewable energy introduced in July 2012 are showing first modest results to reverse this trend – initially solar energy projects dominate FIT projects, since solar projects are fastest to build. Larger projects, such as off-shore wind power, or geo-thermal projects, take a very much longer time to plan and build – on the order of 10 years or longer. More below and in our report on “Renewable energy in Japan”.

Japan's electricity generation from renewable sources
Japan’s electricity generation from renewable sources

Japan’s ratio of electricity generation from renewable resources has dropped from 25% to 10% over the period 1970-2012

Over the years, electricity generation from nuclear and thermal sources has grown much faster than from renewable sources in Japan. As a result, electricity generation from renewable resources has dropped from around 25% in 1970 to around 10% in 2012. In 2012, Japan’s Government and industry associations have announced aggressive plans to reverse this trend

Japan's renewable energy is overwhelmingly water power
Japan’s renewable energy is overwhelmingly water power

Water power dominates renewable energy in Japan

This figure shows all electricity generation in Japan from renewable sources: Japan currently relies overwhelmingly on water power for renewable energy, which varies between 5% of total electricity in winter and around 12%-15% of total in summer, with an overall decrease since 2006. The figure shows that other renewable energy sources (wind, solar, geo-thermal and bio-mass) are still in the very early stages of development.

Renewable energy Japan- research report

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