Power line (allowed) capacity major obstacle to more renewables

November 9, 2017

EDITORIAL: Unused power line capacity should be given to green energy

http://www.asahi.com/ajw/articles/AJ201711090024.html

Promoting power generation using renewable energy sources such as wind and solar power is vital for Japan’s efforts to reduce its dependence on nuclear power while cutting its greenhouse gas emissions.

But established electric utilities’ reluctance to allow new power suppliers to use surplus capacity in their transmission lines is emerging as a major obstacle to growth in renewable power generation in this nation.

The big utilities claim there is no unused capacity in their transmission lines in many areas, forcing many renewable power suppliers to abandon their business plans. These smaller and greener electricity suppliers cannot afford the heavy investment needed for transmission capacity expansion, which would require many years and be enormously expensive.

Last spring, Tohoku Electric Power Co., which supplies electricity to the northeastern Tohoku region, announced there is no surplus capacity in its transmission lines in the northern parts of the region. Since then, other major utilities, which enjoy a near regional monopoly in the power market, have made similar claims in various parts of the nation.

A Kyoto University research team has checked these claims and found them to be untrue.

The team used data provided by a public institution that monitors and supervises the use of power transmission lines nationwide to estimate how the core transmission lines in the four Tohoku prefectures of Aomori, Akita, Iwate and Yamagata were actually used. The group found that, in fact, only 2 to 18 percent of the capacity was used. Its analysis for the facilities in Hokkaido produced similar results.

None of the established utilities has disclosed details of the formulas they use to calculate surplus capacity in their power lines. Basically, however, their calculations are based on the hypothetical situation where all the power generation facilities that have contracts for connection to their transmission lines operate at full capacity. These contracts are concluded on a first-come-first-served basis. Even nuclear power plants that have yet to be completed are counted, let alone ones that are currently offline.

This is an extremely unreasonable approach. The Ministry of Economy, Trade and Industry and the public organization supervising transmission lines are considering measures to correct the problem. They need to quickly come up with fair and transparent rules concerning the issue.

A key viewpoint for debate on this issue is for whom the power grids exist.

Legally, the power lines belong to the utilities that operate them. But the costs of building and maintaining the networks are passed on to consumers through electricity rates.

In other words, transmission lines are public assets that have been developed with money widely collected from power consumers, or the entire public.

From this point of view, the current system for connecting to transmission lines is seriously flawed because it allows utilities to give preferential treatment to their own power generation facilities, including planned or idle nuclear power plants, and shut out newcomers such as renewal power suppliers.

A radical review of the system is needed to make the most of the existing power grids and keep down the additional financial burden on newcomers as much as possible.

The established utilities have taken a dim view of the Kyoto University study. Tohoku Electric Power says the published data concerning the use of its power cables only represent one aspect of the reality. The firm contends that using only this data to evaluate the necessity of capacity expansion is not fair.

Instead of defending their stance, the utilities should first disclose detailed information about the use of their transmission lines.

If they try to tip the debate in their favor by monopolizing the relevant data, they will inevitably be suspected of erecting a barrier to entry into the market.

In the United States and Europe, where the operations of power generation and transmission facilities are clearly separated, various plans and systems have been developed to ensure a stable power supply and prevent blackouts despite connections of unstable renewable power generation facilities to the grids.

Japan plans to separate the operations of power generation and transmission facilities in 2020.

How to respond to the issue of the alleged scarcity of surplus capacity in transmission lines will be a key test of the commitment of the government and the power industry to creating transparent and fair business environments for the years after the separation.

--The Asahi Shimbun, Nov. 9