The sudden withholding of grid access from renewable energy projects including solar is “unreasonable” and could bring “great confusion” to the renewable energy industry, the Japan Renewable Energy Foundation (JREF) has claimed.
It has been widely reported that the acceleration of deployment of solar in Japan since the inception of the feed-in tariff (FiT) in mid-2012 has led to a lack of available grid connection in some areas and worries about grid stability. The northern island of Hokkaido was the first area where concerns were raised, where due to the relatively high availability of land, many utility-scale solar power plants were planned but only a fraction were connected.
Then last month, on 24 September, the electric utility responsible for the grid on another island, Kyushu, to the south, suspended approvals for new solar power projects, citing similar grid capacity constraints. A conversation with Ministry of Economy, Trade and Industry (METI) spokesman Kazuki Aoyama confirmed that similar difficulties were being faced by the utilities of Shikoku, Okinawa and Tohoku. Japan’s electricity network consists of a number of regional utilities who are also responsible for the grid.
Aoyama told PV Tech that a working group had been formed by METI to deal with the grid connection issue and related matters, with the group’s first meeting expected to take place later this month. Additionally, the government is expected to hold a wide ranging review of the FiT at the end of the year.
Developer Canadian Solar released a statement on Monday saying that only one project from its Japanese project pipeline had been affected so far by the suspensions, a 2.3MW project in Kyushu that had yet to gain grid connection approval. Meanwhile, the company said 95.6MW of its Kyushu projects were approved for connection with Canadian Solar targeting a total of 550MW to 600MW of late stage projects in Japan by the end of this year. The company said that during the third quarter, the figure already stood at over 490MW.
Writing on the Japan Renewable Energy Foundation website, the organisation’s director Mika Ohbayashi referred directly to Kyushu Electric Power’s decision to suspend negotiations for the approval of all renewable energy projects except residential solar under 10kW. Ohbayashi argued that while it was true that adding all 12.6GW of renewable energy projects that had been approved up to July would exceed the utility’s minimum daytime demand of 8GW, potentially causing problems, only 3GW of renewable energy projects of all types has gone onto the grid so far. This “abrupt withholding of responses,” Ohbayashi said, was “unreasonable” as a business practise, while as an aspect of the renewable energy industry specifically, it would “bring great confusion”. Ohbayashi argued that this right to refuse should only be exercised with the greatest restraint.
Ohbayashi went on to argue that measures should be considered to aid the intergration of renewables, such as careful monitoring of weather data and a way of recognising and combating the inherent monopoly of utilities that also operate regional grids. Japan’s electricity market is tentatively set to be “unbundled” in 2016, a move which Ohbayashi previously told PV Tech’s sister publication Solar Business Focus, could result in widespread positive changes for the electricity industry. In the latest blog, Ohbayashi said Japan could not afford to wait for this to happen.
However, a report by Bloomberg today also claimed Japan had overspent on the FiT, contributing to consumer electricity prices in Japan being on average 28% higher than they were four years ago, while in the US, consumer prices have only risen by just over 8% in the same period. Ohbayashi was quoted by Bloomberg as saying that solar should be slowed down if spending was too high for the public to shoulder the burden, but that this should be done in a measured way with rigorous reviewing processes. Bloomberg New Energy Finance's recent report on investment levels for renewable energy stated that in the third quarter of 2014 alone, Japan invested US$8.6 billion.
Meanwhile, in Tokyo this week, the chief executive officer of Japanese thin-film solar company Solar Frontier spoke at a forum on climate change, where he praised the distributed nature of solar and its strengths in being part of the solution to environmental problems. Atsuhiko Hirano, who became head of the company in July, also said that the democratic nature of solar made it unique in engaging the public on energy issues.
“I believe market-based solutions will be pivotal to driving behavioural change in how we source and use energy. We either change through necessity or through desire. I prefer to have the choice to change. Today’s solar photovoltaic solutions are such market-based solutions, with a unique role to play in the overall future energy landscape,” Hirano said.
“When most people think about the role of solar, they think of it as a substitute for other sources of energy. The unique point of solar photovoltaics is that it’s a form of distributed energy. Solar energy can be installed over a wide range of areas that other sources of energy can’t – on top of homes, on farms, at airports, harbours and anywhere off-grid. And that makes it special. It means that anyone can install solar energy. Anyone can participate. And from the moment an owner starts to generate electricity, they become an active agent in the energy debate. They become part of the solution.”
Japanese prime minister Shinzo Abe also addressed the conference by video message, while overseas visitors including Matt Hancock, the UK’s Conservative minister for business, enterprise and energy and Didier Houssin of the International Energy Agency (IEA).
In other Japan news, Tepco, the electric utility and grid operator responsible for the maintenance and cleanup at the Fukushima nuclear plant, this week signed a deal with another Japanese utility Chubu Electric Power, to become one of the world’s largest purchasers of imported liquid natural gas. Japan lacks fossil fuel resources of its own and since the shutdown of nuclear plants across the country has largely relied on imported fossil fuels to a greater extent, while attempting to foster the expansion of its renewable energy industry with the FiT scheme.