Time to choose renewables

August 27, 2018

EDITORIAL: Time is now to turn renewables into ‘mainstay’ energy sources

http://www.asahi.com/ajw/articles/AJ201808270016.html

A large-scale solar power plant that started operation in Niigata in July (Provided by Orix Corp.)

We know which direction we should be going.

The problem is how we should go about getting there. It is time to be working out strategies and putting them into practice over the years to come.

The latest edition of Japan’s basic energy plan, which was approved by the government in July, includes a passage saying that efforts should be made to turn renewable energy options, such as solar and wind power, into “mainstay” power sources.

A substantial expansion in the use of renewables, which does not involve carbon dioxide (CO2) emissions, is indispensable for achieving the double goals of fighting global warming and becoming less reliant on nuclear power. The use of renewable energy sources also comes with the big advantage of domestic availability for Japan, a country poor in natural resources.

Many other nations are already speeding up efforts in that direction on the back of technological innovations and a sharp drop in costs. It is all too natural for Japan to follow that global trend.

The latest plan, however, also appears indecisive in some respects. For example, its future introduction target for renewables remains unchanged from a previously stated goal.

A mountain of challenges remains to be solved to make sure that the whole shebang will not end up as mere slogans. Ideas on how they could be solved should be sought both in Japan and abroad, and the undertaking should be sped up across the entire society.

NUMERICAL GOAL SHOULD BE RAISED

The latest plan, revised for the first time in four years, says in one passage, “We should address challenges squarely toward the goal of introducing renewable energy options in large scales and turning them into mainstay power sources that are self-reliant in economic terms.”

Given that, the plan is too halfhearted in sticking to the previous goal of having renewable energy account for 22 to 24 percent of the total power to be generated in fiscal 2030.

The share of renewables has already grown to some 15 percent in Japan. The possibility has emerged that the numerical goal will be achieved ahead of the initially planned date.

Many European nations are aspiring to even higher levels. For example, the ruling coalition of Germany has agreed on setting a target share of 65 percent for renewables in 2030.

Japan should also pursue possibilities for raising the share of renewables to a maximum.

The first thing to be done in that respect is to lift the existing restrictions on the use of the power grid, which are practically serving as a barrier against power generated from renewable energy sources.

Renewable energy power producers often hesitate about working out development plans because major electric utilities, which own the power grid equipment, explain to them that they don’t have enough capacity in their transmission capability.

Some leeway, in fact, is reserved in their transmission capacity, including a part that is kept unused in providing against a time of technical failures. The industry ministry and the power industry are discussing possible improvements to the operation of the power grid.

There is a pressing need for developing fair and transparent rules to allow a maximal use of the equipment that is currently available.

PAIR OF DRAWBACKS TO OVERCOME

Overcoming a pair of drawbacks is key to the goal of getting renewable energy options on a stable track of expansion. One is the cost of power generation, which remains higher than in other countries, whereas the other lies in the instability of the power supply potential, which varies depending on the weather.

The slowness of cost reduction in Japan is partly attributable to the feed-in tariff (FIT) system, which was introduced in 2012. The system has certainly been a driving force behind a spread of renewable energy sources, but experts have also pointed out that it is helping to allow the renewables industry to preserve its high-cost structure.

The FIT system is an assistance measure for guaranteeing a certain level of income to renewable energy power producers. The cost for doing so is added on top of electricity rates in the name of a levy, and the total burden borne by the public has grown to some 2 trillion yen ($18 billion) a year. The system should inevitably be reviewed to keep that amount to a minimum.

The essential thing is to prompt competition and efficiency improvement on the part of power producers while at the same time ensuring the potential for growth will not be ruined. There are a variety of ways to do so, such as expanding a mechanism for purchasing electric power from a producer that has presented a lower price during a bidding process.

There should perhaps also be discussions on shifting the focus of policy initiatives in the coming years from direct subsidization through the FIT system to carbon tax, to be imposed on CO2 emissions, and to emissions trading. The use of market mechanisms would help allow renewables to become self-reliant at an earlier date.

In the meantime, how to level out variability in the output of wind and solar power will emerge as a major challenge as their output grows. There is no choice, for the time being, but to rely mostly on thermal power for that purpose, but the use of other means is indispensable for reducing CO2 emissions.

More specifically speaking, a variety of options are available, including the use of storage batteries and the development of a power grid that allows electric utilities to supply power to each other on a broader, regional scale. Different technological means should be assessed carefully for their extent of progress and economic efficiency so the most effective components can be combined and put to use.

DIFFERENT ROLES FOR PUBLIC, PRIVATE SECTORS

The effort to turn renewables into mainstay energy sources would take decades to complete. Sorting out the roles to be played by the public and private sectors and allowing a broad array of actors to work together are essential in overcoming hurdles and pressing ahead with that effort.

An important task to be done by the central and local governments is to develop an environment that allows private-sector players to actively engage in research, development and investments. Apart from designing the FIT and other basic systems, there is also a mountain of other things to do, such as working out rules for the use of offshore areas as wind farms and providing information on land plots that are suitable for hosting renewable power plants.

Businesses, which are the main players of action on the ground, should be ready to quickly seize business opportunities and pinpoint social agenda. Renewables account for a core part of energy-related investments overseas, thereby giving rise to a gigantic growth market.

There has been a noteworthy move in Japan’s industrial circles, which appeared to be starting a bit late.

More than 100 entities, including major businesses, local governments and other groups, in July set up the Japan Climate Initiative, a platform for working together to help spread the use of renewables and disseminate information on them. Its corporate participants come from a broad array of industrial sectors such as manufacturing, financing and construction.

An attempt to reshape society into one that is sustainable on the fronts of energy and the environment has now turned into a global swell and is generating new development opportunities. That momentum should be allowed to infiltrate public administrative bodies, businesses, consumers and other parties so that it will serve as a driving force for opening up a new age to come.

--The Asahi Shimbun, Aug. 26