World : Measures to push for renewable energy should also remove malicious operators

It is necessary to balance proceeding with the introduction of renewable energy with consideration for burdens on the public. A system to be put in place must not drive electricity prices up.

The government has largely reviewed its feed-in tariff system that mandates the purchase of electricity generated from renewable energy sources, such as solar and wind power.

Under the system, utilities purchase electricity from such sources at certain prices and collect electricity charges from households and companies after adding a surcharge for such energy to their energy bills.

When the system was launched in 2012 under a government led by the Democratic Party of Japan, entities from different industries rushed to position themselves as solar power producers as the government placed priority on the proliferation of renewable energy and set purchase prices excessively high.

But with the aim of expanding profit, many entities have yet to start power generation, waiting for solar panel prices to drop.

There was a case in which an investment fund management company, which offered solar power products with high returns expected, was investigated over illicit trading.

The pillar of the reform is to remove malicious renewable energy power business operators that have taken advantage of flaws in the system. The Economy, Trade and Industry Ministry has estimated that certification for about 450,000 solar power projects, or 14 percent of the total, will be rescinded.

With a rapid increase in renewable energy, the burden from the surcharge is projected to reach ¥2.14 trillion in fiscal 2017, up 19 percent from the previous fiscal year. One estimate shows that a standard household will see the burden climb to more than ¥1,000 a month in fiscal 2030 from the current ¥686.

Diversify energy sources

Despite the system design that has forced people to bear such an excessive burden, the government was slow to take action for the review. Although long overdue, it can be said that this reform is heading in a sensible direction. After examining the effectiveness of the reform, the government should not hesitate to review the system further if the reform is found to be insufficient.


To promote the use of renewable energy, the standpoint of ensuring stable power supply is crucial above all. In this reform, the government has also decided to launch a bidding system this autumn for new solar power projects.

Previously, the ministry set the prices and granted certification to renewable energy-based power producers. Regarding large solar power projects, the ministry intends to set the volume of solar power to be approved and select operators that will offer lower prices under the revised system.

In a vision of the nation’s energy mix for fiscal 2030, the government has set a target for renewable energy at 22 percent to 24 percent of the total energy supply. The introduction of the bidding system is aimed at improving the current situation in which more than 90 percent of renewable energy eligible to be traded under the system has been solar power.

By using the bidding system, it is vital to diversify renewable energy — whereas disproportionate weight is currently given to solar power — by including geothermal and wind power and biomass, and incorporate it into the energy mix with major energy sources of nuclear and thermal power.

There have been delays in introducing geothermal and wind power as selecting locations for generating such energy requires time. Government support is essential such as by easing environmental regulations and facilitating consensus-building with local people.


Source :

Smart Grid Bulletin February 2019

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