"Bold measures" necessary to promote renewables actively

July 26, 2012

Editorial: Japan needs major shift in energy policy to cut ties to nuclear power

http://mainichi.jp/english/english/perspectives/news/20120726p2a00m0na003000c.html

A major shift in the nation's energy policy is needed if Japan is to reduce its reliance on nuclear power. Not only must the scope of energy conservation be expanded, the nation must promote the introduction of renewable energy.

Moving in this direction, Japan this month launched a feed-in tariff system under which utilities purchase renewable energy at fixed prices. We hope that this system is utilized to spread the use of renewable energy.

Renewable energy is easy on the environment, and plays a part in the fight against global warming. Though its scale is smaller than that of nuclear power plants, it has the benefit of being able to be utilized during times of disaster through a model of local dispersion.

In fiscal 2010, renewable energy accounted for just 10 percent of Japan's total power generation. Taking hydroelectric power out of the equation, the figure stands at a mere 1 percent. In the past, Japan had focused on promoting nuclear power and had shied away from introducing renewable energy due to its high cost, among other reasons.

Under the new system, power utilities are required to purchase power generated through renewable energy models at fixed prices over extended periods of time -- a setup promoting the use of renewable energy.

The system applies to solar, wind and geothermal power, as well as small- and medium-scale hydroelectric power generation and biomass power. A third-party committee operating under the Ministry of Economy, Trade and Industry suggests prices for each unit of power, and the government makes the final decision. Homes and businesses foot the additional cost through their electricity bills.

At the launch of the system, solar power was priced at 42 yen per kilowatt-hour, while wind power was set between 23.1 and 57.75 yen per kilowatt-hour depending on the scale of power generation -- close to what companies generating electricity had hoped for. Criticism has arisen that these prices are high, but when taking efforts to promote the long-delayed introduction of renewable energy into consideration, this is probably unavoidable. For a regular household consuming 300 kilowatt-hours of electricity a month, the higher cost would convert to a monthly electricity bill increase of around 87 yen.

Under the government's options for a new energy policy to be implemented by 2030, renewable energy is slated to account for 25 to 35 percent of total electricity generation. But it is doubtful that such figures can be achieved without bold measures.

The Ministry of Economy, Trade and Industry's Agency for Natural Resources and Energy predicts that during the current fiscal year, electricity generation under the new system will top 2.5 million kilowatts -- roughly the equivalent of the amount produced by 2 1/2 nuclear power plants. The estimate is a sign that the system is kicking in.

At the same time, if renewable energy is progressively introduced, then the burden on consumers will increase. If the burden is excessive, then the very existence of the system could be threatened. In Germany, another developed country where the feed-in tariff system has been implemented, an excessive burden on the public sparked a review of the system.

In Japan, the prices of renewable energy are to be reviewed every year, but for electricity generators, the price and the term set during the fiscal year in which approval was given will be guaranteed.

Allowances probably need to be made for reviews of the pricing system when technological development and other advances enable companies to cut costs. A flexible approach enabling the government to support technological development is also probably needed. We want the government to keep its eyes open on all fronts for chances to spread renewable energy, while taking the situation in other developed countries into consideration.