Japan utilities fight back against renewables influx
In Japan, the flood of approved feed-in tariff applications has prompted half the electricity utilities to implement broad measures to slow down renewable energy project development. On 1 October, four more regional utilities said they would stop signing contracts to buy renewable energy from mega solar power plants, citing grid access limitations. The move follows a similar announcement from Kyushu Electric Power the preceding week.
The country saw installation of solar capacity rocket up 183% between end-2011 and 2013 thanks to its generous feed-in tariff. The incentive was implemented after the country’s 48 nuclear reactors were shut down following the Fukushima Daiichi disaster in 2011.
The government has approved plans for some 72GW of renewable energy projects since July 2012 and developers may well be rushing to reach commissioning before the subsidy rates change. The utilities may be relieved to hear that half of the capacity approved for the feed-in tariff will not be completed, according to Bloomberg New Energy Finance’s H2 2014 Japan Power & Gas Market Outlook, published on 8 October.
Nonetheless, renewable capacity (excluding hydro plants over 50MW) will reach 84GW by 2020 compared with 34GW in 2013, based on our analysis. In addition, power companies are likely to boost gas and coal capacity on the back of uncertainty around nuclear restarts and aging oil plants.
Monty Bannerman
ArcStar Energy
+1-646-402-5076
www.arcstarenergy.com
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