Minister Obuchi Quits, + Japan Feed-In Tariff & Energy Update (In Depth)

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

March 2011—when the Tōhoku earthquake and tsunami devastated four reactors and endangered two others at Fukushima 1—forced a radical rethinking of Japan’s energy picture that continues today with a Japan feed-in tariff program. In the latest round, the utilities are pushing back against the feed-in tariffs and the fruitful development of solar power.

Nuclear facilities in Japan, 2011 (
Nuclear facilities in Japan, 2011 (

To review, before nature took its regrettable course at Fukushima over three years ago, the Japanese used nuclear energy to meet well over 25% of their power needs. In 2010, the Japanese government confidently predicted goals of 53% use of nuclear and about 20% use of renewables by 2030.

But the meltdowns changed all that. The waves and explosions killed over 15,000 people, injured thousands more, and forced the evacuation of a chunk of Honshu’s east coast. Public confidence crumbled. Poor handling of the accident and its repercussions prevented its resumption and even had a part in bringing down the government. Having taken all of its reactors offline for safety checks, the fossil-poor nation had to rely on extremely costly imports of petroleum and coal to run its earlier conventional power plants. The incident also marked the initial stages of a Japan feed-in tariff (FIT) program.

Japan Prime Minister Shinzo Abe (p.d.)
Japan Prime Minister Shinzo Abe (p.d.)

Fast-forward to the December 2012 change of the guard and second (noncontinuous) election of Shinzo Abe, a personable if chameleon-like Liberal Democrat (read: right-of-center nationalist) who has been trying off and on to revive Japan’s nuclear industry. This past spring, Abe revealed expansionist intentions by telling ASEAN countries, the United States, and Australia that Japan wanted to play a major role in regional security.

The announcement marked a slight departure from traditional roles according to the terms of the post-World War II Treaty of Mutual Cooperation and Security between the US and Japan. (That treaty has reportedly lasted longer than any other alliance between two great powers since the Peace of Westphalia, which ended Europe’s Thirty Years’ War in 1648.) Abe also joined Tony Abbott, a big coal supplier, this year in a Japan-Australia Economic Partnership Agreement and addressed the Australian Parliament in July.

Solar radiation in Japan (
Solar radiation in Japan (

The Prime Minister has given a nod to renewables, particularly solar, though not without pledging to follow US President Obama’s original “all-of-the-above” approach. Abe inherited the solar feed-in tariff the previous government had adopted in mid-2012 (when renewables and hydropower made up about 10% of Japan’s electricity).

The Japan feed-in tariff drove the market for a while, guaranteeing income to new green generation, accelerating solar deployment in Japan, raising solar by 54% to 31.6 million kWh today and propelling the island nation into the world’s second largest place for solar energy. The current goal for 2030 is 30% production from renewables (or 35%, if you count hydropower).

Newer developments with the Japan feed-in tariff

Times have changed again, however. Having leaped into solar in 2012 and initiated a “solar gold rush” through 2013, Japan has had strong solar installations in recent years. Analysts expect further gains through 2014 to 9.1 GW. They believe 2015 will not have such strong solar demand because of grid connection issues, land availability, and an upcoming Japan feed-in tariff review. The electricity market is supposed to be totally “unbundled” in 2016.

Apparently intimidated by the boom in solar, though, the nation’s existing power companies have already begun to withhold grid access for renewable energy projects.

Japan's power generation and distribution monopoly (
Japan’s power generation and distribution monopoly (

The Japanese power industry comprises 10 huge companies, each with exclusive regional coverage, and together responsible for operating the nation’s entire power grid. Under the Japan feed-in tariff, the utilities have to buy renewable power from excess generation at annual government-mandated rates.

The rules permit the power companies to pass new generation costs on to their consumers, which they have done, contributing to consumer electricity prices in Japan rising on average 28% higher than they were four years ago. (The comparable figure for the US is 8%. Note that fuel imports caused some of this elevation; and that a very recent report by Bloomberg says Japan overspent on the FIT, also contributing to the price rise.)

The northern island of Hokkaido’s utility was the first to limit grid connections by renewable providers. The power companies of Shikoku, Okinawa, and Tohoku have taken a similar stance. The utilities have begun to cite limitations of the existing infrastructure (an old argument) and the risk of blackouts from new variable-output sources causing system overload. Late last month, Kyushu Electric Power, at the country’s south, suspended negotiations on all renewable energy projects except residential solar under 10kW.

Ongoing political discussions of energy in Japan

Critics of the established Japanese power system charge that utilities don’t like green energy because it competes with their own product. Mika Ohbayashi of the Japan Renewable Energy Foundation says that the industry closure of grid contributions is “unreasonable” and threatens “great confusion” to the nation’s fledgling renewable energy companies.

Others raise the spectre of misinformation, saying that Japan’s monopolistic power generation and distribution system allows mega-providers to prevaricate. Says Hisayo Takada, a climate and energy campaigner for Greenpeace:

If a utility says it can’t transmit solar power on its grid, currently no one can verify the claim because the grid system is a closed box to outsiders…. I hope the [ministry of economy, trade, and industry] will review the claims with fairness and based on information disclosure that should be provided by utilities.

Without checks on reporting, utilities could block new entrants to the power market by means such as charging for transmission or penalizing variable electric supply.

According to the Japan Times, Takada also calls out hypocrisy in industry’s advocacy of restarting the nation’s dormant nuclear reactors. While lauding “stable,” “reliable” nuclear energy, the power companies say they do not want solar power because “there is not enough demand.”

Power trunk lines in Japan, 2011 (
Power trunk lines in Japan, 2011 (

Certainly unlimited access to an outdated grid presents the undesirable consequence that consumers may have to make up the tariff costs as the solar power supply increases. Takeo Hiranuma, an opposition lawmaker and respected political veteran, goes so far as to state, “The cause of the emerging problem is not the FIT, but utilities’ failure to prepare for growth in solar power.… [This] raises a question about the utilities’ suitability as business entities.”

A new energy subcommittee of the Ministry of Economy, Trade, and Industry’s Advisory Committee for Natural Resources and Energy has begun intense scheduled discussions on revising the Japan feed-in tariff. Currently on the table: lowering the impact on consumers by giving priority for renewable energy purchases to suppliers offering the best prices. The government is expected to review the FIT at the end of the year.

Kenji Yamaji, the University of Tokyo emeritus professor and energy systems engineer who currently heads the METI committee, sums up the situation:

The solar power operators have low investment risks and the principle of market competition is not functioning…. We will not be able to regulate the electricity generated and costs [for consumers] if the current scheme continues.

Yamaji believes the government might consider putting a temporary hold on accrediting new renewable power sources because it will take some time to increase transmission capacity. JREF’s Ohbayashi also proposes more careful monitoring of weather data and reexamining the inherent monopoly of utilities. Bloomberg reports that Ohbayashi has agreed that solar should be slowed down if the public cannot afford it, but that the process should be measured and involve rigorous reviews.

Japan’s recent energy progress and expectations for the future

Meanwhile, Japan will continue casting about for viable energy opportunities to fill its needs. The Prime Minister had a setback yesterday as his newly appointed head of METI, Yuko Obuchi—previously thought to be his best nuclear strategist and even a future candidate for Prime Minister—resigned as trade minister for misuse of election funds, including both possible bribery and unlawful use of funds for boutique purchases. Another Cabinet minister also resigned today.

Before her resignation, Japan's new METI minister Obuchi meets with US Ambassador Caroline Kennedy (US Dept. of State/William Ng)
Before her resignation, Japan’s new METI minister Obuchi meets with US Ambassador Caroline Kennedy (US Dept. of State/William Ng)

As we reported earlier this year, Japan has had more than 11 gigawatts of renewable energy installed over the past two years. Among the projects announced since the beginning of this summer:

  • Chinese solar giant Suntech is shooting for about one GW of new solar PV capacity in Japan during the next three years.
  • First Solar is currently developing 250MW of new solar PV projects in Japan.
  • Setouchi City, Okayama Prefecture, is getting a 231MW solar energy project.
  • In July, Deutsche Bank announced plans to lend nearly $1 billion for three to six Japanese solar projects during the next year or year and a half.
  • The METI committee meeting now will likely bump up geothermal energy production from 0.3% of all electricity used in Japan in 2012 to one percent by 2030, says the Yomiuri Shimbun. Having many volcanoes, Japan boasts one of the world’s top three geothermal reserves. Japan has recently estimated that the purchase price of electricity generated by a large geothermal plant is 20% less than that of solar production, and if the percentage of electricity from geothermal increases, it is expected to suppress electric rate hikes.
  • Although Japan’s offshore wind industry has been described as “embryonic,” the country has been working on floating wind turbines since 2012.
  • Reporting an analysis by the Carbon Trust, Robin Whitlock of Renewable Energy magazine spotted floating wind as a key area for the nation to focus on for energy security. The Japanese Wind Power Association has set a national target of 37 GW of offshore wind power (both bottom-fixed and floating turbines) by 2050,
  • Kyocera has plans for the world’s largest floating solar power plant to make up for the shortage of real estate. Around 11,000 photovoltaic modules will generate around 2.9MW of electricity over Nishihira Pond and Higashihira Pond in Kato City, Hyogo Prefecture.
  • Kyocera expects to install approximately 60MW of solar by the end of March 31, 2015.
  • SunPower and Trina Solar have also been increasing their exposure to the Japanese market.
  • Earlier this year, Taisei, one of Japan’s top construction firms, just completed a zero-net-energy office building south of Tokyo as part of the Yokohama Smart City Project.

Potential redevelopment of nuclear power

Ironically, the magnificent output from volcanoes that supports geothermal growth may help kill new nuclear development. As noted, Prime Minister Abe has gone back and forth over the question of reviving nuclear, partly gaining ground because nuclear plants could greatly limit greenhouse gas emissions. The utilities would also like to give it a green light, perceiving it as reliable and inexpensive. (In fact, you may remember that TEPCO earlier pushed the idea of getting units 5 and 6 at Fukushima I restarted. Fortunately, someone apparently figured that enough was enough. After all, the land area might be needed to store unexpected redioactive water releases from units 1-4, and a later problem from unit 5, previously thought unaffected.)

Last month, Japan’s Nuclear Regulation Authority said that two reactors at Sendai in Kagoshima Prefecture had met post-Fukushima safety requirements and were on track for restart. In its dubious wisdom, the NRA was somehow able to predict no major eruption over the next 30 years, when the reactors reach the supposed end of their usable life.

However, Toshitsugu Fujii, a respected vulcanologist from the University of Tokyo who heads a state-commissioned panel on eruptions, disagrees strongly. He believes that eruptions can only be predicted in hours or days, at best.

It is simply impossible to predict an eruption over the next 30 to 40 years. The level of predictability is extremely limited…. Scientifically, [the Sendai reactors are] not safe. If they still need to be restarted despite the uncertainties and risks that remain, it’s for political reasons, not because they’re safe, and you should be honest about that.

He added that a pyroclastic flow from Mount Sakurajima, an active volcano only 25 miles (40 km) from the Sendai reactors, could easily hit them, and that heavy ash from an eruption could cut off Sendai, affect other plants in western Japan, and even reach to Tokyo.

Acquisition of liquefied natural gas supply chain

Just over a week ago, TEPCO (the electric utility and grid operator responsible for the Fukushima nuclear complex as well as powering Tokyo) inked a deal with another Japanese utility, Chubu Electric Power, to become one of the world’s largest importers of liquefied natural gas. Their memorandum of understanding covers the entire energy supply chain from investment through power generation and will create the world’s largest buyer of LNG. In September, Nippon Yusen Kabushiki Kaisha dedicated a new LNG vessel, Pacific Arcadia, to transport LNG for TEPCO from Papua New Guinea for 15 years.

The last word on Japan power, for now

So Japan has continued aggressively on course to develop many energy sources. Speaking at a recent Tokyo forum on climate change, Atsuhiko Hirano, chief executive officer of Japanese thin-film solar company Solar Frontier since July, praised the distributed nature of solar and its role in reducing environmental problems in the country and worldwide:

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.

Kagoshima Nanatsujima mega solar power plant (Kyocera)
Kagoshima Nanatsujima mega solar power plant (Credit: Kyocera)

Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica.TV Video

CleanTechnica uses affiliate links. See our policy here.